2024 November Stock Ideas
Hi StockOpiner,
With the S&P 500 at an all-time high, identifying compelling investment opportunities can be challenging. That’s why we’re highlighting three stocks below that we believe deserve your attention. Each of these companies boasts strong fundamentals and, in our view, trades at an attractive valuation.
1. Alphabet Inc. (GOOGL)
Sector: Technology | Current Price: $169 | Market Cap: $2.06 trillion
Why We Like It: Alphabet dominates the search engine space with 89.3% market share through Google Search. YouTube with an estimated 2.7 billion monthly active users is the largest streaming platform globally, reaching $50 billion in annual revenue as of Q3’24. Of which, YouTube’s subscription revenue surged to $15 billion annually, up approximately 36% since Q1’23. Google Cloud is also rapidly expanding revenue and profitability. With cloud computing expected to reach $2.4 trillion by 2030, growing at a CAGR of 21.2%, Google Cloud with a Trailing Twelve Month revenue of $40.4 billion has ample room for growth.
Source: FinChat.io (affiliate link with a 25% discount for StockOpine readers)
Key Catalysts: Alphabet is integrating AI into Search through features like "Circle to Search," expanded Lens capabilities, and AI Overviews. This will help Alphabet maintain its relevance in Search without compromising monetization. Alphabet’s advertising revenue is projected to grow at a 10% annual rate, consistent with the expansion of the global digital advertising market. Google Cloud is set to outpace peers in growth due to its smaller base, with EBIT margins expected to reach 25–30% by 2028.
Valuation Insight: Alphabet trades at a TTM EV/EBITDA ratio of 15.8x (5-Year average of 17.6x) and a TTM Price / Earnings ratio of 22.5x (5-Year average of 27.0x).