The investor should examine the P/E (194.32) relative to the growth rate (30.33%), based on the analyst consensus projected future long term growth rate, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for GOOG (6.41) is very unattractive. This criteria is the most important one in the methodology and a failure of it will automatically result in a 0% score for the overall analysis.
SALES AND P/E RATIO: [FAIL]
For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth rate high enough to support a P/E above this threshold. GOOG, whose sales are $2,257.9 million, needs to have a P/E below 40 to pass this criterion. GOOG's P/E of (194.32) is not considered acceptable.
INVENTORY TO SALES: [FAIL]
When inventories increases faster than sales, it is a red flag. Unfortunately we do not have sufficient data for GOOG to evaluate this criterion.
Excellent example of why technical analysis fails miserably when used strictky on its own. The analysis cannot take into consideration valuation beyond the numbers which is critically important when assessing GOOG.