Stocks
GOOGL Valuation: DCF Analysis Points to Overvaluation
GuruFocus recently conducted a discounted cash flow (DCF) analysis for Alphabet Inc's GOOGL, which has seen significant price growth over the past year with a 39.0% increase.
The stock is currently trading at $349.54, reflecting a market capitalization of approximately $4.25 trillion.
A two-stage DCF model was used to estimate the intrinsic value of GOOGL, assuming EPS growth at a rate of 25.3% over the next 10 years and a terminal growth rate of 4% for the following 10 years.
The calculation yielded an earnings-based intrinsic value of $315.94, indicating that GOOGL is modestly overvalued with a margin of safety of -10.6% compared to its current price.