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logoMorningstarFebruary 03, 2021

Alphabet Inc.: Alphabet Reports Impressive Q4 Results; YouTube and Cloud Lead the Way; Increasing FVE to $2,605

Symbols
GOOG
Sector(s)
Communication Services
Rating
Premium
Current Price
$2,036.86
Fair Value
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Economic Moat
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Stewardship
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Summary

Alphabet is a holding company, with Google, the Internet media giant, as a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products, which include Nest and Google Home, also contribute to other revenue. Alphabet’s moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), faster Internet access to homes (Google Fiber), self-driving cars (Waymo), and more. Alphabet’s operating margin has been 25%-30%, with Google at 30% and other bets operating at a loss.

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Analyst Profile

Ali Mogharabi

Senior Equity Analyst
Ali Mogharabi is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers Internet and software companies.Before joining Morningstar in 2016, Mogharabi was a senior equity analyst for Singular Research, where he covered the technology and biotechnology sectors. His previous experience also includes roles as a senior equity analyst for B. Riley & Co., associate analyst for Roth Capital Partners, sales consultant for Oracle, and business development consultant for Aerospike.Mogharabi holds a bachelor’s degree in economics from the University of California, San Diego; a master’s degree in business administration from University of California, Irvine; and a master’s degree in applied economics from the University of Michigan.