GOOGL – Market expectations are for Uniform ROA to decline, and mgmt may have concerns about product innovation, business customers, and advertising
- 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.