Quick question? What is Google (Alphabet) Forward P/E? If you answer something below 20 then you have been cheated.
The usual websites to show this data that are free are Yahoo Finance and Finviz.
Well, both commit the same mistake:
- Forward P/E of $GOOG on Finviz: 16.30
- Forward P/E OF $GOOGL on Finviz: 16.41
- Forward P/E of $GOOG on Finviz: 19.01
- Forward P/E of $GOOGL on Finviz: 18.90
Guess what? The real number is bigger than those! Because this websites are taking the earnings of Google as a whole but then they are splitting that earnings between half of the shares (half for $GOOG and half for $GOOGL as if those were independent companies!)
If that is not a pro-trick that deserves twice the valuation I don't know what it is. Hats off to Google!
The right number can be calculated from their last earnings report:
- Outstanding shares (Class A,B,C) => 64,402 Millions
- Total income on 2022-Q2 => 69,685 Millions
- Forward P/E at $110 the share = (64,402 * 110) / (69,685 * 4) => 25.41
Another way to verify this is by checking that the float (or outstanding shares) reported on this websites is much less than the declared 64 Billions they declare on their earnings reports.
Leave a Reply