Is Alphabet Inc. (GOOGL) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $288.15, Alphabet Inc. (GOOGL) sits inside our range of estimates: our valuation lenses put the business somewhere between $103.58 and $333.96 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Alphabet Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 11.2%, with a long-run terminal growth rate of 2.5%. About 73% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — GOOGL would need sustained revenue growth of more than 25%/yr to justify today's price, against about 14.7% a year compounded in our base case. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, GOOGL's modeled DCF value ranges from about $92.24 to $155.05 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Alphabet Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of GOOGL's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind GOOGL's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $402,836,000,000 | Alphabet FY2025 10-K (accession 0001652044-26-000018, filed 2026-02-05): Total revenues FY2025 $402,836M, +15% on FY2024's $350,018M. Mix: Google Services $342,721M (Search & other $224,532M, YouTube ads $40,367M, Network $29,792M, subscriptions/platforms/devices $48,030M), Google Cloud $58,705M, Other Bets $1,537M, hedging -$127M. UNCHANGED as the base — the DCF grows this figure by forecast.revenue_growth, so 2026 belongs in the forecast. CROSS-CHECK: H1 2026 revenue was $229,692M, +23.1% on H1 2025's $186,662M (Q1 +22%, Q2 +24%), so TTM revenue through 2026-06-30 is $445,866M — already 10.7% above this base. |
| Base EBIT margin | 32.0% | Alphabet FY2025 10-K (accession 0001652044-26-000018, filed 2026-02-05): Income from operations $129,039M / revenue $402,836M = 32.03%. OTHER BETS' LOSSES ARE INSIDE THIS NUMBER AND STAY INSIDE IT: the segment lost $7,515M in FY2025 (incl. a $2.1B Q4 Waymo valuation-based compensation charge), and 'Alphabet-level activities' (shared AI R&D, i.e. DeepMind/frontier-model work) cost another $16,760M. Neither is carved out or valued separately — the model treats Waymo et al. as a permanent cost of the consolidated business, which is conservative if any of them becomes a standalone business worth more than its losses. Also inside: elevated legal costs (G&A $21,482M vs $14,188M in FY2024). CROSS-CHECK: H1 2026 operating margin was 35.03% ($80,466M / $229,692M; Q1 36.1%, Q2 34.0%), with Other Bets losing $3,899M in H1 and Alphabet-level activities $11,180M. Reference figure only — the cash-flow math uses forecast.ebit_margin. |
| Forecast revenue growth | 22% → 18% → 14% → 11% → 9% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity: 5.24% at 2026-10-01, the latest published observation. |
| Beta | 1.23 | yfinance beta (5Y monthly), read 2026-10-03: Published 5Y-monthly beta 1.225, used AS PUBLISHED — no normalization. Considered and rejected: Alphabet's longer-run beta sat nearer ~1.0-1.1, and one could argue the 2021-26 window is inflated by the AI re-rating and the 2022 drawdown. But the business has genuinely changed risk shape over this window — it is now a capital-intensive infrastructure builder funding itself with equity, preferred stock and $100B+ of debt — so the higher measured beta is arguably the honest description, not noise. Cost of equity = 5.24% + 1.225 x 5.0% = 11.37%. SENSITIVITY: a beta of 1.0 lowers WACC to ~10.1% and lifts the value by ~$16/share (to ~$131); it does not come close to closing the gap to the price. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker. For Alphabet this is arguably LOW — the forecast still grows 9% in 2030 — but a perpetuity rate above nominal GDP assumes the company eventually outgrows the economy forever. A 3.5% terminal rate adds roughly $11/share; 2.0% takes off ~$4. Must remain < WACC of ~11.2%. |
| Diluted shares | 12,309M | Alphabet Q2 2026 10-Q (accession 0001652044-26-000071, filed 2026-07-23), Note 12: Q2 2026 weighted-average diluted shares, ALL CLASSES (A + B + C), 12,309M: basic 12,151M + 142M RSUs + 16M if-converted mandatory convertible preferred. KNOWN UNDERCOUNT, ~1%, STATED RATHER THAN FIXED: this is a quarterly AVERAGE and ~80M new shares were issued only in early June (50.9M in the public offering + 28.6M to Berkshire Hathaway), and the preferred was outstanding for only ~26 days of the quarter. On a period-end basis the count is ~12,230M outstanding + ~142M RSUs + ~54M preferred at the maximum conversion rate ≈ 12,426M — ~1% more, i.e. ~$1/share less value. The direction of travel is UP: buybacks stopped (zero in H1 2026 vs $28.3B in H1 2025), and a $40B ATM programme now issues shares to cover employee-RSU withholding tax (~$30B of it for 2026, per the 2026-06-01 release) instead of retiring them via net settlement. |
| Market price | $288.15 | Delayed quote · as of 2026-11-10 05:22 UTC |
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