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GOOGL – Market expectations are for Uniform ROA to decline, and mgmt may have concerns about product innovation, business customers, and advertising
May 25, 2022
Alphabet Inc. (TTC) currently trades below corporate but near historical averages relative to Uniform earnings, with a 14.1x Uniform P/E (Fwd. V/E’).
At these levels, markets are pricing in expectations for Uniform ROA to decline to 22%, accompanied by 9% Uniform asset growth.
Meanwhile, analysts expect Uniform ROA to compress to 25% by 2023, accompanied by 21% Uniform asset growth.
If sustained going forward, these levels would imply a stock price closer to $4,546, representing significant potential equity upside for the firm.
That said, the firm’s most recent earnings call suggests management may have concerns about product innovation, business customers, and advertising.
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