Alphabet Inc.

A recession would hurt advertising, but Alphabet is resilient. Competitive advantages protect the...

A recession would hurt advertising, but Alphabet is resilient. Competitive advantages protect the core business's downside, while secretive moonshot investments give upside. With plenty of capacity to borrow and a mountain of cash, I rate the stock an Add, as it is undervalued by 21% and offers a 12% IRR.

Summary

• Company name: Alphabet Inc.

• Ticker: GOOGL

• 52-week range: $83–152

• Market cap: $1,121bn

• Price: $86.60

• Target: $101–110

• Upside: +21%

• Recommendation: Add

I) Story

Business model

Alphabet is a global advertising and technology business. The company makes money by selling targeted advertising across its online platforms and devices.

Alphabet gets almost half (46%) of its revenue from America, 31% from Europe, the Middle East and Africa, and 18% from the Asia Pacific. It’s the biggest interactive media and services company by both market capitalisation and revenue.