Alphabet Inc. (GOOG)

FairStock Score: 83/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital, carry little debt, and can reinvest at attractive rates. Alphabet fits much of that. In fiscal year 2025 it reported revenue of $402.8B, net income of $132.2B, and diluted EPS of $10.81, up from $350.0B, $100.1B, and $8.04 in fiscal year 2024. In fiscal Q2 2026, the quarter ended 2026-06-30, it reported revenue of $119.8B, net income of $112.2B, and diluted EPS of $9.11; that 93.65% net margin looks exceptional, and I would want to understand its durability rather than capitalize it blindly. FairStock-calculated returns are strong, with ROE at 48.68% and ROCE at 12.96%, while debt/equity is only 0.19 and the Altman Z-Score of 10.36 suggests low financial distress risk. The moat is the habitual use of Search, YouTube, Android, and Google Cloud; I infer durability from scale and repeated cash generation, not from a narrative. At the 2026-10-16 close of $336.91, FairStock calculates P/E at 16.90, P/B at 6.62, EV/EBITDA at 13.17, FCF yield at 1.3%, and PEG at 0.06. The Graham Number is $153.28, so the price sits 125.02% above that conservative figure. FairStock’s Lynch category is FAST GROWER, based on 26.8% annual profit growth and 17.2% revenue growth over five years. Growth is real, but $53.3B of trailing free cash flow against a $4.1T market cap leaves little cash-flow cushion in the price. I would call this a high-quality business at a fair-to-full price, dependent on whether the recent profit surge repeats.

In plain English: Alphabet runs Google Search, YouTube, Android, Google Cloud, and other internet services; most of its money comes from ads and cloud services. The business looks very strong: revenue and profit have grown quickly, debt is low, and it earns a lot on the money it keeps in the business. At $336.91 on 2026-10-16, the price looks fair compared with earnings but not cheap compared with the value of the assets on its books.

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Data as of 2026-10-16 close · note generated 2026-10-20 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer