Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Analysis of Revenues
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Current Valuation Ratios
Alphabet Inc., current price multiples
| Alphabet Inc. | Comcast Corp. | Meta Platforms Inc. | Netflix Inc. | Take-Two Interactive Software Inc. | Walt Disney Co. | Media & Entertainment | Communication Services | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | |||||||||||
| No. shares of common stock outstanding | |||||||||||
| Growth rate (g) | |||||||||||
| Earnings per share (EPS) | |||||||||||
| Next year expected EPS | |||||||||||
| Operating profit per share | |||||||||||
| Sales per share | |||||||||||
| Book value per share (BVPS) | |||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | |||||||||||
| Price to next year expected earnings | |||||||||||
| Price-earnings-growth (PEG) | |||||||||||
| Price to operating profit (P/OP) | |||||||||||
| Price to sales (P/S) | |||||||||||
| Price to book value (P/BV) | |||||||||||
Based on: 10-K (reporting date: 2024-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Alphabet Inc., historical price multiples
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial ratios exhibit notable trends over the five-year period under review. The Price to Earnings (P/E) ratio shows a consistent decline from 34.65 in 2020 to 22.47 in 2022, followed by a slight increase to around 23.5 in 2023 and 2024. This indicates a reduction in market valuation relative to earnings initially, with some stabilization in the most recent years.
The Price to Operating Profit (P/OP) ratio displays a more pronounced decrease from 33.85 in 2020 to 18.01 in 2022, signaling improved operating profit performance relative to stock price. However, this ratio increased moderately thereafter to just over 20.9 in both 2023 and 2024, suggesting a modest upward adjustment in market valuation compared to operating profit.
The Price to Sales (P/S) ratio declined sharply from 7.65 in 2020 to 4.76 in 2022, reflecting a significant drop in valuation relative to sales during that period. This ratio then experienced a recovery phase, increasing consistently to 6.73 by the end of 2024, indicating a renewed market confidence or improved sales quality impacting valuation positively.
The Price to Book Value (P/BV) ratio fluctuated differently, increasing from 6.27 in 2020 to 7.78 in 2021, suggesting enhanced market valuation relative to book value. This was followed by a decline to 5.26 in 2022, and then a steady rise again reaching 7.25 by 2024. This volatility may reflect changes in asset values or investor perceptions of the company's equity base over time.
Overall, the data indicates a trend of declining valuation multiples in the early years, particularly until 2022, followed by a period of stabilization or moderate recovery through 2024. The variations across different ratios suggest shifting market perspectives on earnings, operating profit, sales, and book value, with the company experiencing a phase of reassessed valuation before regaining some investor confidence in later periods.
Price to Earnings (P/E)
Alphabet Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/E Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/E Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Alphabet Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated an overall upward trend across the analyzed periods. It started at $103.5 at the end of 2020, rose sharply to $148.04 by the end of 2021, declined to $105.22 at the end of 2022, then recovered to $141.8 in 2023, and increased further to a peak of $193.3 in 2024. This indicates notable volatility with a strong recovery and growth in the latter periods.
- Earnings per Share (EPS)
- The EPS showed positive growth but with some fluctuations. It more than doubled from $2.99 in 2020 to $5.75 in 2021, declined to $4.68 in 2022, then rebounded to $5.94 in 2023, and increased significantly to $8.21 in 2024. Despite the dip in 2022, the overall trajectory is upward, reflecting improved profitability over time.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio decreased from 34.65 in 2020 to 22.47 in 2022, indicating that the share price grew at a slower pace relative to earnings, or that the company became less richly valued relative to its earnings. From 2022 onwards, the ratio stabilized, fluctuating slightly but remaining in the range of approximately 22.5 to 25.7. This suggests a more consistent valuation relative to earnings in the more recent years.
Price to Operating Profit (P/OP)
Alphabet Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Income from operations (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/OP Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/OP Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Alphabet Inc. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trends
- The share price exhibited significant fluctuations over the five-year period. Starting at 103.5 US dollars at the end of 2020, it rose sharply to 148.04 US dollars by the end of 2021. This was followed by a notable decline in 2022 to 105.22 US dollars. However, the price rebounded in 2023, reaching 141.8 US dollars, and saw a substantial increase in 2024, peaking at 193.3 US dollars. This pattern indicates volatility with an overall upward trend, especially pronounced in the last year.
- Operating Profit Per Share
- Operating profit per share showed consistent growth throughout the period. Starting at 3.06 US dollars in 2020, it nearly doubled to 5.95 US dollars in 2021. It maintained a relatively stable level in 2022 at 5.84 US dollars, followed by continued increases in 2023 and 2024, reaching 6.78 and 9.22 US dollars respectively. This increasing trend suggests improving operating efficiency and profitability on a per-share basis.
- Price to Operating Profit Ratio (P/OP)
- The price to operating profit ratio declined from 33.85 in 2020 to 18.01 in 2022, reflecting a relative undervaluation of the share price compared to operating profit during this period. Subsequently, this ratio increased moderately to 20.92 in 2023 and slightly to 20.97 in 2024. The initial decline followed by stabilization implies changes in market valuation dynamics, with the earlier decrease potentially indicating increased operating profit outpacing share price growth, and the later rise suggesting share price increasing at a faster rate relative to operating profit.
Price to Sales (P/S)
Alphabet Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenues (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/S Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/S Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Alphabet Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The financial data demonstrates a varied trend over the observed period across key metrics including share price, sales per share, and the price-to-sales (P/S) ratio.
- Share Price
- The share price experienced notable fluctuations over the years. Starting at $103.50 at the end of 2020, it rose sharply to $148.04 by the end of 2021. However, there was a significant decline in 2022 to $105.22, nearly returning to the 2020 level. Subsequently, the share price recovered considerably in 2023, reaching $141.80, and surged further in 2024 to $193.30, marking the highest level in the reported period.
- Sales Per Share
- Sales per share showed a consistent upward trend across all the years under review. Beginning at $13.54 in 2020, sales per share increased steadily each year, reaching $19.49 in 2021, $22.08 in 2022, $24.72 in 2023, and culminating at $28.71 in 2024. This indicates progressive revenue generation on a per-share basis and reflects continuous business growth.
- Price-to-Sales (P/S) Ratio
- The P/S ratio displayed an initial slight decline followed by partial recovery. It started at 7.65 in 2020 and remained relatively stable at 7.60 in 2021. A sharp drop occurred in 2022, down to 4.76, which aligns with the decline in share price during the same period despite increasing sales per share. Thereafter, the P/S ratio gradually increased to 5.74 in 2023 and further to 6.73 in 2024, suggesting a strengthening market valuation relative to sales.
Overall, the data points to a scenario where sales per share consistently improved, reflecting robust underlying operational performance. The share price, while more volatile, showed strong recovery and growth in the last two years, indicating increased investor confidence and positive market perception. The fluctuations in the P/S ratio predominantly mirror the changes in share price rather than sales performance, suggesting market valuation variances independent of sales trends during this timeframe.
Price to Book Value (P/BV)
Alphabet Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/BV Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/BV Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Alphabet Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited notable fluctuations over the analyzed period. Starting at $103.5 at the end of 2020, it increased significantly to $148.04 in 2021. This was followed by a decline to $105.22 in 2022. Subsequently, the price rebounded sharply to $141.8 in 2023 and continued its upward momentum, reaching $193.3 by the end of 2024. This pattern indicates considerable volatility with a strong recovery and growth in the latter years.
- Book Value Per Share (BVPS) Trend
- The book value per share demonstrated a consistent and steady increase throughout the entire period. It rose from $16.51 in 2020 to $26.67 in 2024. This gradual growth suggests improving underlying equity value and potentially enhanced financial strength.
- Price-to-Book Value (P/BV) Ratio Trend
- The P/BV ratio showed variability corresponding to share price movements relative to book value changes. Initially, it increased from 6.27 in 2020 to a peak of 7.78 in 2021, reflecting a relatively high market valuation compared to book value. The ratio then declined to 5.26 in 2022, indicating a market correction or recalibration. It rose again to 6.22 in 2023 and further to 7.25 in 2024, suggesting renewed market optimism and valuation expansion above book value.
- Overall Observations
- The data reflect a company experiencing strong growth in book value per share, which points to solid fundamentals. However, the share price and valuation ratios have exhibited significant volatility, highlighting sensitivity to market sentiment or external factors. The upward trajectory in both share price and P/BV ratio by the end of the period suggests increased investor confidence and an enhanced perception of the company's future prospects.