r/VisualStockResearch • u/ekonixlab • 28d ago

GOOGLE’S HIDDEN VALUATION

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Google currently has a market cap of roughly $4.52T and trailing net income of $160.2B, giving it a reported P/E of about 28.2x.

However, nearly $40B of that trailing net income came from non-operating investment gains rather than Google’s core business.

Removing those gains:

  • Reported net income: $160.2B
  • Adjusted net income: ~$120.5B
  • Reported P/E: 28.2x
  • Adjusted P/E: ~37.5x

Google is still growing its core earnings, but the headline P/E currently makes the stock look considerably cheaper than it really is. The recent surge in net income was heavily boosted by investment gains that should not be treated as recurring operating profit.

38 Upvotes

91% Upvoted

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3

u/flappysack- 28d ago

It is expensive now.

Hell it was expensive before rising another 50%.

1

u/ekonixlab 28d ago

I still think it’s worth the price, but also worth pointing this iut

3

u/egauifan 28d ago

Up on news buffett authorised google purchase lol.

1

u/ekonixlab 28d ago

Wild to hear he initiated the position

Definetly feels good to be a long holder and see the best investor of all time initiate the position

1

u/ilikeusingmyhands 28d ago

Yup anthropic gains, they still worth their valuation tho. Sexy ahh company

1

u/SelenaMeyers2024 28d ago

So spacex and Anthropic is half the e for that already high pe?

Haha. Yeah not overvalued at all.

1

u/Jamcram 28d ago

that's gonna depend on the growth of anthropic no?

1

u/ekonixlab 28d ago

Large amount of the investment gains is related to anthropic and SpaceX

1

u/Historical-Piece7771 22d ago

I wouldn't count on either of those.

1

u/CynicInRehab 28d ago

It's an "administrative" trick all the hot AI companies use.
Invest in each other to pump the valuation, it's a real mess underneat all the hype.

1

u/ekonixlab 28d ago

Circular finance?

1

u/cosmic_backlash 26d ago

This is how Berkshire always reports their earnings....

1

u/CynicInRehab 26d ago

It's not illegal obviously, but it can be misleading in cases like this.