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GOOG, a USD 2 trillion valuation
Target price USD3,105
Last 12-month cashflow +USD 32.4 billion
February 5th,, 2021
1 minute read
Sales
Our just recently made sales forecast was soundly beaten by 15% in the fourth quarter with spectacular growth of +23% to reach USD 56.9 billion. Average quarterly sales growth is now at +7%. We expect this to moderate to +3% in the next 12 months & sales to reach USD 63 billion by the fourth quarter of this year, 2021.
Cashflow
Cashflow also easily beat or forecast & was a record USD 15.4 billion in the fourth quarter, up from USD 9.7 billion a year ago. Average quarterly cashflow is now at USD 8.1 billion. We use average investment spending of USD 5.6 billion which with higher sales gives a higher next 12 months average quarterly cashflow of USD 14 billion.
1 minute read
Sales
Our just recently made sales forecast was soundly beaten by 15% in the fourth quarter with spectacular growth of +23% to reach USD 56.9 billion. Average quarterly sales growth is now at +7%. We expect this to moderate to +3% in the next 12 months & sales to reach USD 63 billion by the fourth quarter of this year, 2021.
Cashflow
Cashflow also easily beat or forecast & was a record USD 15.4 billion in the fourth quarter, up from USD 9.7 billion a year ago. Average quarterly cashflow is now at USD 8.1 billion. We use average investment spending of USD 5.6 billion which with higher sales gives a higher next 12 months average quarterly cashflow of USD 14 billion.
Huge sales, huge cashflow, a USD 2 trillion valuation...
Balance sheet
The balance sheet leverage, cash minus total liabilities continues to rise to -USD 70.6 billion in the fourth quarter from -USD 66 billion in the third quarter & -USD 56 billion a year ago. With our higher cashflow forecast & assuming a dividend payout of USD 28 billion, the net cash will be -USD 42.2 billion in 12 months time.
Profit
Net profit reached a record USD 15.2 billion in the fourth quarter, from USD 11.2 billion in the third quarter. The cash costs ratio of net profit add non cash costs minus sales as a percent of sales was lower 63%. We use the average 66% costs to predict a higher net profit USD 55 billion this next 12 months.
Value
GOOG has paid out USD 77 billion of capital the last five years. At the current market value of USD 1.2 trillion, it’s 18X capital paid, 5.4X sales, 3.8X assets, 5X equity, with a 22% profitability & a 2.2% yield: Our cashflow forecast is USD 55.9 billion. At 1.6% with a 0.6X adjustment gives a higher target price USD 3,105.
The balance sheet leverage, cash minus total liabilities continues to rise to -USD 70.6 billion in the fourth quarter from -USD 66 billion in the third quarter & -USD 56 billion a year ago. With our higher cashflow forecast & assuming a dividend payout of USD 28 billion, the net cash will be -USD 42.2 billion in 12 months time.
Profit
Net profit reached a record USD 15.2 billion in the fourth quarter, from USD 11.2 billion in the third quarter. The cash costs ratio of net profit add non cash costs minus sales as a percent of sales was lower 63%. We use the average 66% costs to predict a higher net profit USD 55 billion this next 12 months.
Value
GOOG has paid out USD 77 billion of capital the last five years. At the current market value of USD 1.2 trillion, it’s 18X capital paid, 5.4X sales, 3.8X assets, 5X equity, with a 22% profitability & a 2.2% yield: Our cashflow forecast is USD 55.9 billion. At 1.6% with a 0.6X adjustment gives a higher target price USD 3,105.
