Highly Regarded

Is Alphabet Inc. (GOOGL) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Communication Services sector peers in our coverage

77% Premium TTM fundamentals · sector averages from covered peers

GOOGL trades at 33.9× TTM earnings — a 77% premium to its Communication Services sector average of 19.2× in our coverage.

The Numbers

P/E (TTM)

33.9×

Sector avg: 19.2×

P/S (TTM)

11.0×

Sector avg: 4.4×

Market Cap

$4.43T

EPS (TTM): $10.81

Revenue (TTM)

$402.84B

Net income: $132.17B

Communication Services Peer Comparison

How GOOGL's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
GOOGL This page $366.44 33.9×
META $600.39 25.6×
NFLX $76.04 30.1×
DIS $97.40 14.3×
T $20.59 6.8×

Is the Premium Justified?

July 6, 2026

Alphabet Inc. (GOOGL) trades at a P/E of 33.9x, representing a premium to the Communication Services sector average of 22.1x. This valuation is supported by strong Q1 2026 results, with consolidated revenues up 22% and operating margin expanding to 36.1%. Google Cloud revenues surged 63% to $20.0 billion, with its backlog nearly doubling to over $460 billion, driven by enterprise AI solutions. Advertising revenue also grew 15.5% in Q1 2026, with AI integration enhancing ad relevance. Alphabet's TTM operating margin is 46.31%, and its gross profit margin is 60.4%. The company's leadership in AI and diversified growth across search, cloud, and subscriptions justify its premium multiple within the sector.

Sources

Frequently Asked Questions

Is GOOGL overvalued or undervalued?
On trailing-twelve-month earnings, GOOGL trades at 33.9x versus a Communication Services sector average of 19.2x in our coverage — a 76.8% premium. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing GOOGL with its own Communication Services peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Communication Services names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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Same question, Communication Services peers

T META NFLX VZ DIS