Why Wall Street is Wary of Investing in Google

Image: Google

​Market Valuation:  $1.2 Trillion 
 
Ironbound Buy-Side Valuation:  $700 Billion
 
Ironbound Assessment:  California based Alphabet Inc., parent company of Google founded in 1998, is an American multinational technology company.  In 2021 the company reported $257 Billion in sales and $76 Billion in profits.  Our upside valuation is $2 Trillion based on the average of $200 Billion in sales over the past three years and growth continuing to exceed 10% annually.   This is a reasonable expectation considering Google is at the heart of the digital economy, which continues to grow as the world rapidly shifts further online.  Much of this accelerated growth can be attributed to aligning stakeholders’ together.  In 2007, Google was the first major company to be carbon neutral in their operations, by 2020 they were the first major company to be carbon neutral for its entire history.  Their 2030 goal is to be the first major company that runs on carbon free energy in perpetuity, and help other organizations follow in their footsteps.  The biggest hurdle holding back the stock price is the 51.4% voting control by the two co-founders.  The limited control prevents a sovereign wealth fund or group from acquiring the company.  The current market valuation is trading at 21-times the average operating income, much higher than 14-times multiple favorable for a value driven buyer.