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Alphabet Inc. (GOOGL) – Wall Street’s Best Digest Daily Alert – 6/23/21

This tech company—a perennial investor favorite—is forecasted to grow its earnings at an annual rate of 21% over the next five years.

This tech company—a perennial investor favorite—is forecasted to grow its earnings at an annual rate of 21% over the next five years.

Alphabet Inc. (GOOGL)
From Dow Theory Forecasts

Alphabet has rallied nearly 39% in 2021, but the stock remains one of my top picks for year-ahead gains.

The company increased earnings per share 49% and sales 18% for the 12 months ended March, while operating cash flow grew 35% and free cash flow jumped 75% to $50.74 billion.

Encouragingly, Alphabet has reversed the steady slide in operating profit margin, which had contracted in 11 straight quarters before rising in the last three quarters. The future may look even brighter, with analysts calling for 49% higher earnings per share in 2021 on revenue growth of 29%.

The stock trades at 28 times estimated 2021 earnings, in line with its industry median. Excluding net cash of $156 per share reduces Alphabet’s current-year P/E to 26. Alphabet is a Focus List Buy and a Long-Term Buy.

Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, June 17, 2021