In this video I will be taking a look at Google stock, and performing a high level initial DCF valuation to examine whether the current price of Google shares is close to where I see the real value of the stock.
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👉🏻Watch next: how to invest when you know a recession is coming (the best stock market crash investment strategy): https://www.youtube.com/watch?v=a3jls_Jzh4M&t=211s
DISCLAIMER: All of Tom's strategies, and news coverage are based on his own opinions alone and are only done for entertainment purposes. If you are watching Tom's videos, please don't take any of this content as guidance for buying or selling any type of investment or security. Tom Nash is not a financial advisor and anything said on this YouTube channel should not be seen as financial advice. Tom is merely sharing his own personal opinion. Your own results in the stock market or with any type of investment may not be typical and may vary from person to person. Please keep in mind that there are a lot of risks associated with investing in the stock market so do your own research and due diligence before making any investment decisions.
Download Stock MVP Here: https://www.stock-mvp.com/
👉🏻Watch next: how to invest when you know a recession is coming (the best stock market crash investment strategy): https://www.youtube.com/watch?v=a3jls_Jzh4M&t=211s
DISCLAIMER: All of Tom's strategies, and news coverage are based on his own opinions alone and are only done for entertainment purposes. If you are watching Tom's videos, please don't take any of this content as guidance for buying or selling any type of investment or security. Tom Nash is not a financial advisor and anything said on this YouTube channel should not be seen as financial advice. Tom is merely sharing his own personal opinion. Your own results in the stock market or with any type of investment may not be typical and may vary from person to person. Please keep in mind that there are a lot of risks associated with investing in the stock market so do your own research and due diligence before making any investment decisions.
Okay, so let's talk about Google stock. You all ask for me to do a DCF on Google Here it is I'm on stock MVP As you know, the platform I Use now daily and we're going to take a look at Google First of all, let's look at the cards. Uh, this stock, by the way is actually performing quite horribly, but not as bad as some other stocks we looked at recently down 37 over the past year over the past three months. What's the performance? like? 11 down? I Mean yeah.
All Tech is taking a bidding right now Google is included. Let's look at my own cards here. and of course you can customize your own cards. My own are on the screen right now.
Revenue is 281 billion dollars. It's growing 17.9 percent over the past year 170 of the past five years. So we're looking at Double Digit growth, which is very nice for company of this size. It's quite impressive actually.
Net income is 67 billion, ebitda is 94 billion, and cash and cash equivalents are 22 billion. That is on par 29 billion. so very close. I Mean it doesn't have a lot of that compared to the cash.
A little bit over, but not something dramatic, especially given the fact that it has three and a half times more assets right here than liabilities right here. So three and a half times more assets and abilities and very close, almost one to one cash and uh and debt and insanely profitable company we know about. You know, the Google cloud services, the the YouTube business, the search business I mean the advertising business Google has a lot of business. A lot of moving.
Parts If you look at institutional shareholding of Google you're going to find out that this is one of the stocks that institutions love. 63 Institutional ownership. Let me just make it bigger so you guys can see it on the screen. 63 is exactly like where you want it to be accompanied this size.
Although this is the little bit alarming part. as you can see, over the past couple of years, they've been slowly criming their position. This is the holding of Institutionals. As you can see, they've been going down.
this is two thousand This Is 2020, 2021, 2022 So just two years ago, they were at 4 billion point four shares. Right now, they're at 3.7 billion. So there are trimming. That's not.
that's not, you know. sugarcoat it. There are trimming. Uh, there's more Insider selling than than buying.
although this is Google so it's not really that important of a metric. Everybody knows what Google is. Let's run the quick. DCF And let's see where it's at right now.
Real quick. So current price is 90.61 Today it's down half a percentage point. It's pretty much flat. So uh, let's use the you know 15 ebitda growth in five percent.
The Precision grow Five percent Capex growth. Let's populate. Let's give it a 10 discount rate over four percent lockdown growth rate. And okay, so what I Get here.
it's 284.81 which is 214 undervalued which is absolutely insane. Now we can make the assumptions a little bit crazier and more conservative in you know, to make life a little bit harder for Google. Let's give it 10 growth, 10 depreciation number, position, 10 Capex, and then 12 discount rate Populate calculate even if we go by the most trick metrics I can imagine which is 12 discount rate at 10 Capex every year increase. Let's do five percent ebitda growth. Let's say Google Grows By five percent ebitda. That's it. It's still undervalued by 21, so no matter how you spin it now, Google is according to this DCFS And the value. Don't forget though, it doesn't mean it's undervalued because you have to look at the Macro, The macro is not good.
We're heading into recession Google has a lot of businesses depending on Advertising which depend on you know, kind of a B2c business. so if we're going to recession, ad revenue is going to come down, it's already coming down with YouTube So be careful. This is just the first stage if you're interested in this. This is the time where you dive deeper and you find out about the company.
But you know, if you want to run your own DCF and research yourself, go to stock. MVP We already sold out the first 1000 members and if you're just kind of curious, just try it out. For 14 days we have a refund, no questions asked. If you don't like it for any reason, let me know.
We'll refund you immediately. See you next video.
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Google is going to come back eventually and when it does, we are going to have great returns… think about this GOOG makes 70% of its rev from advertising and with so many companies cutting their ad budgets it hurts Google, but when the economy comes back and Google only improves their targeting advertising … game over…
it's one thing that few people count on and it's a lawsuit they have against NLST that could cost them the single biggest fine in the usa according to knowledgeable people and could affect the price?
But what do I know?
thanks!
google is the craziest money machine ever
Tom , Programming of the AI system is basically stealing favoring the Gov. Should this continue we (including U ) are all out since none con win this game, sad to see this happening.
What’s your thoughts about the current movement in US government looking to breaking up google ? How would this affect Google stock?
Tom! You forgot to do your “Google Google Google” song 🙂
Let's buy everything
Tom you got me really thinking about buying some 12-16 month exp calls for google sometime around Feb-march
Tom, that dashboard UI can be way better. Too much space in the cards
I found this boring. But wait.. It's not anyone's fault but mine, and I can't fault the content. From what little I know, you're providing real value. But the reason I'm commenting, liking, and subscribing is because the way you're delivering it is fantastic, it may be only minor details but the wobbling social icons, the drawings at the top.. Fantastic! This is quality, and for those that think that small detail isn't important, no, this is clever and engaging, the little details make a big difference. Well done Tom.
Tom, it’s very hard to read anything on your screen…
Is Stock MVP free service or need to pay? Thanks.
254B net equity, 60B projected net income for 2023, 7.0% growth thereafter, and fair target valuation at est 857B on est 12.7B shares outstanding at year end 2023; or 67.50 per share.
Oh man… missed the offer… won't you extend it for Chrismas?
Feeling good. Bought another 100 last week. Selling weekly options on 300.😊
My god these bots in the comment section are ridiculous
I'm sure we have alot of people interested in Mid Cap stocks that can possibly do we'll pre and post recession. Mid Cap stocks will run a hell of a lot higher and faster then most of the mega caps….
I actually did a DCF on Alphabet on my own. I calculated with 12,060,000,000 shares (the sum of A and C shares), so kinda doubled than what I see on your screen. So your result should be wrong imo.
Knowing what Twitter has done, and that Google has done the exact same thing, I simply can't bring myself invest in the name.
One thing I do admire is that the stock is fairly stable. After the past 2 years, I have felt seasick the entire time.
Holy shit it's botland in the comments
Bots are going nuts these days.