INTRINSIC VALUE OF STOCK
Google Inc (GOOG)
Stock valuation results will appear here after you hit the Calculate button above.
Please check/change the model input data first. The most important discretionary inputs are highlighted.
SUMMARY FINANCIAL STATEMENTS of Google Inc (GOOG)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL RATIOS of Google Inc (GOOG)
Valuation Ratios |
Financial Strength |
Profitability Ratios |
|||||
| P/E Ratio | 20.2 |
Quick Ratio | 37 |
Gross Margin | 65.2% |
||
| Price to Sales | 5.2 |
Current Ratio | 5.9 |
Gross Margin - 3 Yr. Avg. | 64.1% |
||
| Price to Book | 3.4 |
LT Debt to Equity | 5.1% |
EBITDA Margin | 37.5% |
||
| Price to Tangible Book | Total Debt to Equity | 7.2% |
EBITDA Margin - 3 Yr. Avg. | 40.3% |
|||
| Price to Cash Flow | 13.5 |
Interest Coverage | 309 |
Operating Margin | 30.7% |
||
| Price to Free Cash Flow | 17.7 |
Management Effectiveness |
Oper. Margin - 3 Yr. Avg. | 33.7% |
|||
Growth Rates |
Return On Assets | 15% |
Pre-Tax Margin | 32.5% |
|||
| Sales Growth Rate | 29.3% |
Ret/ On Assets - 3 Yr. Avg. | 16.8% |
Pre-Tax Margin - 3 Yr. Avg. | 34.9% |
||
| Sales - 3 Yr. Growth Rate | % |
Return On Total Capital | 17.4% |
Net Profit Margin | 25.7% |
||
| EPS Growth Rate | % |
Ret/ On T. Cap. - 3 Yr. Avg. | 19.2% |
Net Profit Margin - 3 Yr. Avg. | 27.4% |
||
| EPS - 3 Yr. Growth Rate | % |
Return On Equity | 18.7% |
Effective Tax Rate | 21% |
||
| Capital Spending Gr. Rate | -14.4% |
Return On Equity - 3 Yr. Avg. | 19.9% |
Eff/ Tax Rate - 3 Yr. Avg. | 21.5% |
||
| Cap. Spend. - 3 Yr. Gr. Rate | 7.8% |
Asset Turnover | 0.6 |
Payout Ratio | 0% |
||
DEFINITION OF TERMS used for the MODEL'S INPUT
Production assets is the sum of the balance sheet items Property, Plant and Equipment (PP&E), Goodwill, and Intangibles.
Initial revenue growth rate is set to be equal to the current annual revenue growth rate (calculated from the income statement for the last reported period).
Terminal revenue growth rate is expected annual revenue growth rate in 25 years from now.
Revenue decline factor is a multiplier applied in each of the future years to the difference between the then-current revenue growth rate and the terminal revenue growth rate. It makes possible a smooth decline (or increase) in projected revenue growth rates to the terminal revenue growth rate.
Initial discount rate is the rate at which the company's cash flow in a year from now is discounted to the present time.
Discount rate multiplier is a multiplier applied in each of the future years to the then-current discount factor. This leads to increase in the discount rate in each of the subsequent years, which justified by increase in risk/uncertainty.
DEFINITION OF TERMS used for the MODEL'S OUTPUT
Intrinsic value is the value of a security (in our case it is a common stock) calculated as the present value of future cash flows the owner of that security is expected to receive. Sometimes, intrinsic value is also referred to as 'fundamental value', 'true value' or 'fair value' (the latter use is not correct in principle). Present value of future cash flows (or discounted cash flows) is the sum of future years' cash flows discounted to the present day using an appropriate discount rate. The discount rate is dependent on general level of interest rates and riskiness of an investment.
Margin of safety is the difference between stock's intrinsic value and its market price. The term was coined by the founders of value investing, Benjamin Graham and David Dodd, in their book Security Analysis (1934). It is the key parameter for value investors in stock selection. Margin of safety provides room for uncertainty and errors in estimation of future cash flows and other stock valuation variables.
Upside/downside potential is the total gain/loss an investor would have had on his investment in a stock if the stock is bought at its current market price and sold at its intrinsic value. By the way, there is no guarantee that the stock will ever trade at or even near its intrinsic value, as the price of any asset or security is determined by market forces. Therefore, there is also no guarantee that an investor will not suffer a loss even on the best and highest-rated stocks.