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Alphabet Stock Looks Cheap - Analysts Raising Price Targets
Despite its recent rise, Alphabet Inc. stock could still be undervalued. Analysts have been raising their price targets ahead of earnings at the end of the month. Shorting out-of-the-money puts can yield 1% over the next 3 weeks.GOOG is at $167.27, up substantially from a recent low about a month ago. It hit a trough of $149.54 on Sept. 9.On Sept. 10, I wrote in Barchart that GOOG stock was cheap: “Alphabet Stock Is Down, But Not Out - GOOGL Could Be Worth 29% More.” I argued that GOOG was worth at least $193 per share based on its strong free cash flow and FCF margins.Here is an update. Analysts project revenue will reach $386.99 billion next year. Using an 18.5% FCF margin, which is its last 12-month FCF margin, Alphabet could generate $71.593 billion in 2025.In other words, it provides a good yield - 1.1% for the next 3 weeks - with over 8.3% downside protection.That makes it ideal for existing shareholders to do this trade. That way they gain all the potential upside in GOOG stoc
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