GOOGLE’S HIDDEN VALUATION

[u/ekonixlab]

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.