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GOOG trades against a final fair-value range of $318.98-$541.63, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs. Fair value range: low $319, high $542, with mid-point at $429.
Stock analysis

GOOG fair value $319–$542

By StockMarketAgent.AI team· supervised by
Analyzed: 2026-05-20Next update: 2026-08-20Methodology v2.4Data cut-off: Quality gate: passSources: all material sources passed deterministic freshness/provenance gatesReview: automatedArchetype: Mature compounder
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Last price
$384.90
▲ +43.84 (+11.39%)
Fair value
$429
$319–$542
Rating
Buy
confidence 88/100
Upside
+11.4%
upside to fair value
Margin of Safety
$364.43
MoS level · 15%
Market Cap
$4.66T
P/E fwd 26.6

§1 Executive summary

  • Composite fair value $429 with high case $542.
  • Implied upside of 11.4% to fair value.
  • Moat 9/10 · confidence 88/100 · Mature compounder.
  • Trades at a measured discount to fair value with adequate margin of safety.
Fair value
$429
Margin of safety
+10.2%
Confidence
88/100
Moat
9/10

Educational analysis only — not financial advice. Always do your own due diligence.

$384.90Price
Low $318.98
Mid $428.74
High $541.63

GOOG trades against a final fair-value range of $318.98-$541.63, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.

  • Monopoly-like scale in digital advertising
    Monopoly-like scale in digital advertising and user search query volume.
  • Deep structural data advantages refining
    Deep structural data advantages refining algorithmic ad targeting.
  • Cycle upside
    Accelerating enterprise cloud adoption and AI infrastructure monetization expanding total addressable market.

§2 Bear case

Under severe macro or technological stress, a shift away from link-based search directly targets Alphabet's highest-margin profit pool. The current $91.4B capexCapital expendituresCash spent on acquiring or upgrading property, plant, and equipment. Splits into maintenance capex (sustaining current capacity) and growth capex (expanding capacity). run-rate acts as a fixed anchor, compressing free cash flowFree cash flowOperating cash flow minus capital expenditures. The cash a business generates after maintaining and growing its asset base — the closest accounting proxy for owner-economics. heavily if top-line ad revenues stall.

Ways this thesis can break

AI Search Disruption

· Medium

Generative AI chat interfaces rapidly gain share, structurally lowering query volume, reducing ad real estate, and collapsing margins.

FV impact
Drops fair value toward the $211.33 trailing EPS anchor.
Trigger
1-3 Years

Regulatory Breakup

Low-Medium· Low

Antitrust scrutiny forces a value-destructive breakup of the ad-tech stack or search exclusivity agreements, reducing structural ROIC.

FV impact
Multiple compression to 15x, wiping out the mature moat premium.
Trigger
2-5 Years

Capex Value Destruction

· Low

Massive AI infrastructure investments fail to generate sufficient incremental returns, permanently impairing structural free cash flow margins.

FV impact
Cuts fair value below the $318.98 bear scenario target.
Trigger
3-5 Years
Early-warning signals to monitor
MetricCurrentTrigger threshold
Deterioration in FCFF or owner earnings per share converging downward to GAAP EPS.MonitorDeterioration versus the report thesis
Declining search market share relative to generative AI entrants.MonitorDeterioration versus the report thesis
Declining ad-revenue-per-query indicating terminal pricing power loss.MonitorDeterioration versus the report thesis
Year-over-year contraction in core operating margin.MonitorDeterioration versus the report thesis
Capex to DA ratio remaining persistently above 4.0x without corresponding revenue acceleration.MonitorDeterioration versus the report thesis

§3 Financial history

Income statement — last six periods
Line itemT−0T−1T−2T−3CAGR
Period2022-12-312023-12-312024-12-312025-12-31Trend
Revenue$282.84B$307.39B$350.02B$402.84B+12.5%
Gross profit$156.63B$174.06B$203.71B$240.30B+15.3%
Operating income$74.84B$84.29B$112.39B$129.04B+19.9%
Net income$59.97B$73.80B$100.12B$132.17B+30.1%
EPS (diluted)$4.56$5.80$8.04$10.81+33.3%
EBITDA$85.16B$97.97B$135.39B$180.70B+28.5%
R&D$39.50B$45.43B$49.33B$61.09B+15.6%
SG&A$42.29B$44.34B$42.00B$50.18B+5.9%

Quality scores

Piotroski F-score
6 / 9
0–9 quality composite
Altman Z-score
14.77
Bankruptcy risk (>3 safe)
Beneish M-score
-2.64
Earnings manipulation risk
OCF / Net income
1.25×
>1 indicates high earnings quality
Accounting quality gate
Pass
Sector-adjusted gate
ROIC
26.6%
Return on invested capital
§3

Numbers analysis

Cash flow

Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.

Capital allocation

Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.

Individual subscribers — §4 onwards11 more sections

Read the full analysis — 11 more sections.

Competitive moat, industry cycle, peer comparison, intrinsic valuation, sensitivity, scenarios, earnings decision tree, position management, investor perspectives, scorecard, and final recommendation.

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BALANCE SHEET FAQ

GOOG balance sheet questions

  1. GOOG (GOOG)'s balance sheet section reports total assets, total liabilities, shareholders' equity, and the structure of debt versus cash so leverage and liquidity can be read directly.

FAQ

GOOG — frequently asked questions

  1. Based on our latest analysis, GOOG looks modestly undervalued. The current price is $385 versus a composite fair-value midpoint of $429 (range $319–$542), which implies roughly 11.4% upside to the midpoint.

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