 Welcome to the channel. This is reliable Rudy in this video. We're going to fill a view request for Google Now I have looked into Google before I have not made a position in Google I do not own an individual share of Google But it was one that I was looking into it especially as the market was falling It just never got into my price range where I was interested in buying the stock Could it get there in the future? I don't know and when it gets there Am I going to start a position that will be up for me to decide? But nonetheless, I'm going to share my opinion in this video Yeah, I'm not a licensed financial advisor. Everything in this video contains only my opinion. It's for entertainment purposes only I do not have an individual holding except for in mind. I do own it in my index funds But nonetheless, I have nothing to gain nothing to lose stating my opinion here guys Now Google very fundamentally sound business. Their financials are pretty a one if I were to just jump over this eight pillars Just a simple matter of valuation right here But these two red X marks right here are five-year numbers Their current PE matching up to their five-year average right here. That is a red check their current PE setting at 20 So maybe this is a potentially an opportunity of of getting into a position of a fundamentally sound business Now on a five-year rate, they're buying back five percent of their shares. Anyway, that's pretty solid Very low debt. They easily cover their debt free cash flow net income growth and revenue growth they invest their money very good and This is the big one is that return on equity basically those share based Compensations such as issuance of shares and share buybacks They do a very good job of of understanding when to do that and they get a solid return on their equity Solid margins Profit margins gross margins a little bit high on the price of sales. That's the one thing that I would say about it In terms of just looking at the metrics, but it is Google. You're gonna have to pay a little bit of a premium for Google But there is a couple things that I want to point out We're gonna go to the income statement for that and this is this large increase in revenue guys as you get larger as a Company it becomes a lot harder to grow now. We have not seen that pullback for for Google yet So so I don't want to assume that this revenue growth is going to continue Saying as you get larger you have to find more and more ways to increase your revenue with a lot harder to do that and The big thing that I've seen in terms of how they're doing that is you look at their acquisitions They are making acquisitions year in and year out And it would be very hard to go and look into every single acquisition that Google's made because they're making multiple acquisitions every single year now that doesn't mean that That Google is just going to to fall off the cliff. No, this is a fundamentally sound business But nonetheless, I think that my numbers are going to be a little bit more conservative than what other people's numbers are And we're gonna try and do the stock analyzer tool in this video along with it But there is one other point that I want to get across before we move over to this stock analyzer tool is one the year 2020 and 2021 2022 up to now these last three years look at this net income You see this huge spike in net income This and and leading up to that they were pretty consistent pretty consistent growth right here huge spike huge spike And then starting to slow down again a little bit But none the less these are two very big spikes in in that income. Is that going to be sustainable? Now the other thing that is a little bit alarming is 13 billion shares outstanding That is a lot of shares out there guys that's a lot of shares and Now they have been buying back shares consistently and they are probably going to continue buying back shares But none the less 13 billion shares is a lot of shares guys This this isn't a typical 20 to 100 million shares. No, we're talking 13 billion shares out there If you were just an average investor and you were buying five shares, you're buying a very very tiny Portion of this business. There's 13 other 13 billion more shares out there if you're buying five shares So keep that in mind also when you're investing But nonetheless that that was my point. Yeah very fundamentally sound business with Google And we're gonna hop over to the stock analyzer tool where the first thing we're going to focus is on on revenue Now if I were someone to get new coming into this software and I would sit here and say yeah 20% revenue growth. I mean that that looks like a fair a fair assumption going into the future But you got to remember as you get bigger It is a lot harder to grow your business and then we got to remember the years 2020 and 2021 Kind of fluke years if I'm just being honest those years are very fluke years And those are tweaking into their five-year tenure and one-year numbers So keep that in mind now to get a good look of this I'm going to go to the macro trends you see this huge massive increase in revenue You see this guys and you see how we've had this steady decline in the amount of revenue that it's growing Yeah, you see what I'm trying to get across right here So in these numbers my goal is going to try and be conservative, but you can see leading up to the year 2020 They were still pretty consistent in those Mid-teens the 20% growth so very very impressive what Google has been able to do They got a lot of brands if you yet if you got time go look at all the brands Google has and You'll understand why they've been able to consistently grow that bit their business But going into the future it is going to be very hard to Match up with these and compound 20% annual growth for a 10-year analysis My analysis right here is a 10-year analysis being able to compound 20% growth Going 10 years into the future that they would just be absolutely massive So I'm going to be very conservative and with this revenue and to start off I Am going to be a little bit wider, but on the low side. I'm going to actually use 5% Revenue growth now. I know I probably get a lot of pushback on that But in the end I want to be as conservative as possible and we're gonna use 10 and 15 I feel 15% on the high side is very reasonable. I would not be surprised if if Google Put up 15% Going into a 10-year period now wouldn't be surprised if they beat that but in the end my goal is to be as conservative as I possibly Can be so the next thing we're going to go over is profit margins So I'm going to go over the margins and you can see the net margins right here now you can see now I'm really focused right here from 2014 now their business was pretty consistent going into those years But you see how we're stagnant needs low 20s to 20 flat Very stagnant right here, and then we have another little little shelf right here where we're 20% 2021-2022 came along boom huge increase in net income and now we're starting to Revert back to a mean am I going to use these mid 20s high 20% Profit margins even though they were putting those high profit margins in right here Yeah, I remember they've been making a lot of acquisitions their business is a lot different now than it was in 2010 A lot different of a lot a lot different business now than they were back then But I do like this shelf of this low 20s So I'm going to use that for a floor price and we're going to push that up to the mid 20s right here So for for profit margin, I'm going to use 20 22 and 24 and free cash for margins I'm probably going to use the same exact numbers. I don't see much of a disconnect I don't see a reason to use different profit margins right there So this these are the numbers that I'm going to use for my analysis now for PE for a 5% revenue For a 5% revenue growth Their five-year average PE is around that. Let's just go back and get this point across right here Yeah, remember they've consistently been growing 20% rate and for a 20% growth rate Yeah, it makes sense to pay a 30 plus PE for Google But going into the future if they're not able to put up that 20% growth I don't want to pay this high of a PE for that So it doesn't surprise me that they've started to pull back and their current PE sitting around 20 right here But nonetheless Yeah, I like to match up the revenue that they are generating to the PE. So for a 5% revenue growth I'm probably going to pay around a 15 and we'll go 20 and 25 we'll just keep it simple right there and we'll use these same exact numbers and We want our 15% annual growth because if I our annual return because if I'm not getting a 15% return I'm just gonna stick to broadly diversified index funds. I don't have to stress about anything and Yeah, I'm just not gonna stray away from my investing strategy. So we want that 15% return so I'm gonna hit an analyze right here and Yeah, these are the numbers that I'm looking for Now on the low side am I expecting Google to get down the 50 bucks You know if it was down there and they were putting up numbers like this You know, I'm still going to be investing this middle-to-low assumptions right here Now I am also going to do to tweak these numbers and go 8 12 and 16 and we're gonna use the same numbers for the most part actually I'm gonna push this up to about an 18 22 and 26 18 22 and 26 We're gonna hit generate right here, and yeah, okay, you can use either one of these models But on the high side I don't know if I would ever put numbers higher than this if I'm being completely honest now If I wanted to tweak these down even one more time and go 8 10 12 will keep those same profit margins 18 20 and 22 18 20 and 22 Okay, now my numbers are scrunched down and this this is a very reasonable Look right here. So current price of Google's trading at about 111 dollars. Yeah, I just needed to pull back a little bit I think the low that it got down to was Let's see what that low was We can see Yeah, we got down to 105 dollars We set a bottom double bottom and then another low right off of that It's got a good shelf of resistance right there at 105 I'm looking for a crack of that support and that crack of the support is gonna bring me really close to my middle assumption And that's how I'm playing Google on the next video We will match these evaluations up to the chart and we'll go from there I hope you guys enjoy the content and we'll see you on the next one