The revenue season is in full swing. Investors are keeping an eye on the latest information on how companies are performing. Most “The magnificent Seven“The group provides financial results.
With their respective industries, these technical businesses will likely be at the top of the wish list of many investors. The problem, however, is that they are usually traded at a sudden valuation.
But now you are lucky. This is one of seven epic stocks to buy at Dip without hesitation. And as you know, it’s not nvidia.
Unfortunately Wall Street
With a market capitalization of $2.3 trillion, alphabet (googl 0.61%)) (Goog 0.57%)) There is always a spotlight. So, after the release of the 2024 financial update in the fourth quarter, there must have been information that disappointed the analyst community when the company’s shares fell 7% on February 4th.
Alphabet’s revenues rose 12% year-on-year to $96.5 billion in the fourth quarter. To be clear, that type of jump is undoubtedly admirable, but investors weren’t happy with its expectations below about $90 million. I don’t think the bigger sales mistakes in the important Google Crowdsegment helped instill confidence.
But the business beat expectations on the bottom line. Earnings per diluted earnings (EPS) surged 31% in the fourth quarter to $2.15. Over the past decade, this metric has risen faster than revenue, demonstrating the impressive ability of the alphabet to scale up in a highly profitable way.
Perhaps the market was the most surprising thing that the company was planning Capital expenditure 2025, $75 billion. This was well above the consensus estimate of $59 billion. Alphabet does not have gasoline pedals when it comes to spending.
“As we expand our AI efforts, we hope to increase investment in capital expenditures on technology infrastructure, with data centers and networking primarily following the servers.” Q4 2024 Revenue Call.
I don’t really complain
It’s very easy to keep up with what happens and overreactions over a three-month period, as businesses need to provide quarterly updates. Successful investors can zoom out and focus on the big picture. By doing this, you can easily see how great the business alphabet is.
Even at its large size, it still has meaningful growth potential. The global digital advertising market is projected to double the size, reaching revenue of $1.2 trillion in 2030. With its top market share, the alphabet is poised to grab a big chunk, largely thanks to this, thanks to the popularity of internet properties.
The company is financially sound, to say the least. The alphabet produced a whopping $99 billion in years Free cash flow Fourth quarter. This was after significant capital investments in growth initiatives. That cash has supported $62.2 billion in share buybacks and $7.4 billion in dividend funds over the past 12 months.
And when you own this company, there is not much economic risk. The balance sheet is excellent, with cash, cash equivalents and marketable securities at $84.8 billion exceeding the total long-term obligation.
Time to travel
The market doesn’t always give investors the opportunity to buy world-class business at a decent price. But that’s exactly what’s happening right now.
Alphabet stocks are trading at 10% off peak Positive price and profitability 20.6. This represents the overall discount S&P 500 Index, situations where it appears not to be guaranteed.
Consensus analyst estimates that Alphabet’s EPS is projected to increase at a combined annual rate of 13.6% over the next three years. This sound outlook justifies paying something that is valuation doubled below the market.
It’s time to move on and take advantage of the current dip to buy this epic seven stocks.
Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Neil Patel and his clients have no positions in any of the stocks mentioned. We recommend Alphabet and Nvidia for Motley Fool. Motley Fools have a disclosure policy.
