GOOGL - Embedded Expectations Analysis - 2021 08 26
Alphabet Inc. (GOOGL:USA) currently trades at a recent high relative to UAFRS-based (Uniform) earnings, with a 22.0x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain stable, but management may have concerns about YouTube's reach, cybersecurity demand, and Google Services.Specifically, management may lack confidence in their ability to maintain YouTube's unique audience reach, win more Google Workspace customers through innovations, and capitalize on the growing demand for cybersecurity. In addition, they may be exaggerating their progress bringing the full breadth of Google Services to customers, further opportunities in the Smart TV space, and the stability of their cost structure. Furthermore, management may lack confidence in their ability to commercialize Waymo and make it easier for new business customers to get started with Google. Finally, they may have concerns about the utility of Travel Insights, headcount additions, and the safety of Waymo.
Alphabet is a holding company. Through its subsidiaries, the company is engaged in a collection of businesses, which its primary business is Google. The company reports all non-Google businesses collectively as Other Bets. Google's main products and platforms are Android, Chrome, Gmail, Google Drive, Google Maps, Google Play, Search, and YouTube. The company also provides advertisers with tools that help them attribute and measure their advertising campaigns. In addition, Other Bets includes Access, Calico, CapitalG, GV, Verily, Waymo, and X, among others. Other Bets primarily engages in the sales of internet and TV services through Access as well as licensing and research and development services through Verily.
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