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GOOG less sharp as sales growth slows
GOOG Current 108 Target 123 + 14%
Jul 27, 2022
1 minute read
Sales declined -9%
Last 5 quarters million dollars
61,880 65,118 75,325 68,011 61,680
Costs down profit up
Last 5 quarters
-62% -69% -61% -66% -62%
Cashflow lower
Last 5 quarters million dollars
12,816 15,489 13,918 16,055 12,816
Balance sheet net cash worsened
Last 5 quarters million dollars
-74,192 -79,117 -76,127 -82,206 -86,688
Capital paid improved , a 14% higher target price
Last 5 quarters million dollars
107,023 122,277 138,788 155,004 171,295
Jul 27, 2022
1 minute read
Sales declined -9%
Last 5 quarters million dollars
61,880 65,118 75,325 68,011 61,680
- Sales declined -9% in the second quarter to 61,680 million dollars -4% below our 64,147 million dollars forecast.
- This brings the average to 0% growth.
- We predict average growth of 3% in this next 12 months to bring sales to 18,902 million dollars in the second quarter 2023.
Costs down profit up
Last 5 quarters
-62% -69% -61% -66% -62%
- The cash cost ratio went from -66% to -62% profit from 16,436 to 18,525 million dollars in the second quarter.
- The average cost ratio is at -64% now.
- We use an average -64% cost ratio to predict a 18,902 million dollars profit in the second quarter 2023.
Cashflow lower
Last 5 quarters million dollars
12,816 15,489 13,918 16,055 12,816
- Free cashflow went from 16,055 to 12,816 million dollars in the second quarter with -9,074 million dollars investment cashflow.
- Average quarterly Cashflow is at 14,570 million dollars now.
- We assume the same -9,074 million dollars investment spending which with lower sales gives 14,961 million dollars average Cashflow in the next 12 months.
Balance sheet net cash worsened
Last 5 quarters million dollars
-74,192 -79,117 -76,127 -82,206 -86,688
- Cash increased 20,886 to 20,945 million dollars in the second quarter.
- Liabilities increased 103,092 to 107,633 million dollars so net cash worsened -82,206 to -86,688 million dollars .
- With our forecast cashflow & a -66,437 million dollars equity payout 6,591 million dollars liabilities payment net cash will be -93,279 million dollars in 12 months time.
Capital paid improved , a 14% higher target price
Last 5 quarters million dollars
107,023 122,277 138,788 155,004 171,295
- GOOG 26 quarter capital paid improved 155,004 to 171,295 million dollars in the second quarter with + 1,042 million dollars from liabilities + 15,249 million dollars from equity & will be 231,141 million dollars in12 months time.
- At the current market value of 1,420,289 million dollars based on our forecasts it’s at 3.8 X assets with a 6 years payback & a 5% yield.
- Our cashflow forecast is 59,846 million dollars which means a 24 X valuation. A 27 X valuation gives a 14% higher target price 123 dollars.
