GOOGAlphabet Inc. (Class C)
Is the business good?
A genuinely good business: earnings fully cash-backed (1.5×), margins widening, and elite returns on assets.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Profits are tracking sales roughly one-for-one, limited operating leverage either way.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 34% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is GOOG?
Alphabet Inc. (Class C) earns 23% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 14 points above what the capital costs: growth creates value
- Operating margin
- 33%
Operating margin · Communication Services median 7.6% · 12 months to Q2 2026
- Cash conversion
- 1.54×
Cash conversion · 1.33× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +0.91%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 23% |
| FY2021 | 31% |
| FY2022 | 26% |
| FY2023 | 27% |
| FY2024 | 32% |
| FY2025 | 32% |
Details›
- Gross margin12 months to Q2 2026
- 61%
- Operating margin12 months to Q2 2026
- 33%
- Net margin12 months to Q2 2026
- 55%
- Free cash flow margin
- 12%
- R&D as % of revenue
- 15%
- Revenue, trailing twelve months
- $445.9B
- Free cash flow, trailing twelve months
- $53.3B
- Net income, trailing twelve months
- $244.2B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 23%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Communication Services
Ranks #11 of 124 by RyuScore