Why Is Alphabet Stock So Cheap? – The Motley Fool
After plunging last year, shares of the Google parent are cheaper than the S&P 500.
Alphabet‘s(GOOG 0.97%) (GOOGL 1.09%) Google is one of the most dominant businesses in modern history.
The internet search engine claims more than 90% market share in much of the world, has grown rapidly throughout its history, and generates huge profit margins. In spite of the strength in Google and in Alphabet’s other properties like YouTube, the stock is actually trading at a discount to the S&P 500.
Currently, Alphabet is valued at a price-to-earnings (P/E) ratio of 18, and if you back out its $140 billion in cash and marketable securities, its P/E ratio is only 16. By comparison, the S&P 500 trades at a P/E multiple of just under 21.
So why is Alphabet so cheap? After the stock plunged last year, let’s take a look at the reasons why it’s trading so low today.
What the bears think
It’s no secret that Alphabet is struggling these days. Its third-quarter earnings report made that…
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