Is GOOGL still a buy?

Following a widely applauded first quarter beat, Roth MKM analyst Rohit Kulkarni has maintained his “Buy” rating on Alphabet (Alphabet Stock Quote, Chart, News, Analysts, Financials NASDAQ:GOOGL).

On April 26, GOOGL reported its Q1, 2024 results. The company posted EPS of $1.89 per share on revenue of $67.6-billion, topping the street consensus of $66.1-billion.

The analyst summarized the quarter.

“GOOGL reported a clean beat 1Q driven by accelerating growth in all key segments, Search, Cloud, and YouTube. Core Google Services op. margin hit almost 40%, a multi-year high as 15-month-long cost efficiencies have started to bear fruit. Moreover, for the first time in its 25+ year corporate history, Google declared a quarterly dividend of $0.20 per share on top of a new $70bn authorization in share repurchases.”

In a research update to clients April 26, Kulkarni maintained his “Buy” rating on GOOGL but raised his price target from $164.00 to $202.00.

The analyst thinks GOOGL will post EPS of $8.17 on revenue of $346.4-billion in fiscal 2024. He expects those numbers will improve to EPS of $9.22 on a topline of $385.6-billion in fiscal 2025.

“Our $202 price target is based on ~22x 2025E GAAP EPS, and implies ~21x P/E (ex-cash) plus ~$8/share in Cash and ~$5/share in Other Bets (“Other Bets” worth approx. $65bn, incl. $50bn in value assigned to self driving car unit, Waymo),” he concluded.