As of August 31, 2025, Alphabet Inc's estimated intrinsic value ranges from $60.87 to $258.05 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $258.05 | +21.2% |
| Discounted Cash Flow (5Y) | $215.69 | +1.3% |
| Dividend Discount Model (Multi-Stage) | $198.95 | -6.6% |
| Dividend Discount Model (Stable) | $209.65 | -1.5% |
| Earnings Power Value | $60.87 | -71.4% |
Is Alphabet Inc (GOOGL) undervalued or overvalued?
With the current market price at $212.91, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Alphabet Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.72 | 0.8 |
| Cost of equity | 7.2% | 9.4% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 14.1% | 15.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| After-tax WACC | 7.2% | 9.3% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $216 | $2,614,233M | 81.7% |
| 10-Year Growth | $258 | $3,126,515M | 67.1% |
| 5-Year EBITDA | $148 | $1,794,556M | 73.3% |
| 10-Year EBITDA | $189 | $2,290,268M | 55.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $60,123M |
| Discount Rate (WACC) | 9.3% - 7.2% |
| Enterprise Value | $643,607M - $840,102M |
| Net Debt | $5,673M |
| Equity Value | $637,934M - $834,429M |
| Outstanding Shares | 12,094M |
| Fair Value | $53 - $69 |
| Selected Fair Value | $60.87 |
| Metric | Value |
|---|---|
| Market Capitalization | $2574934M |
| Enterprise Value | $2580606M |
| Trailing P/E | 22.28 |
| Forward P/E | 21.65 |
| Trailing EV/EBITDA | 8.10 |
| Current Dividend Yield | 38.35% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.01 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $77.41 |
| Discounted Cash Flow (5Y) | 25% | $53.92 |
| Dividend Discount Model (Multi-Stage) | 20% | $39.79 |
| Dividend Discount Model (Stable) | 15% | $31.45 |
| Earnings Power Value | 10% | $6.09 |
| Weighted Average | 100% | $208.66 |
Based on our comprehensive valuation analysis, Alphabet Inc's intrinsic value is $208.66, which is approximately 2.0% below the current market price of $212.91.
Key investment considerations:
Given these factors, we believe Alphabet Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.