February 12, 2018

GOOGL – Market expectations are for declining Uniform ROA, but management’s confidence about Made by Google hardware products and their Grow with Google initiative implies this is unwarranted


    • Alphabet Inc. (GOOGL:USA) trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 23.2x Uniform P/E. At these levels, the market has fairly bearish expectations for the firm, which is likely unwarranted given management’s confidence about Made by Google hardware products and their Grow with Google initiative
    • Specifically, management is confident that their Made by Google hardware products were very popular during the holiday season, and that their Grow with Google initiative will help jobseekers and small businesses gain education and skills to help them succeed as the firm expands. As such, expectations for continued Uniform Turns compression appear too bearish, and equity upside remains warranted

click here to read more (registration required)