cnbc.com - Alphabet googl earnings q3

EPS           : $2.67
Revenue       : $127.58B +25%

Net Income    : $26.17B

Free Cashflow : -$9.07B

Note: As usual it is not helpful to focus on the headline EPS number as there are a lot of variables influencing it that are not central to their business operations. Revenue is a better indicator of business health IMO.

Commentary
* The headline is going to be the large jump in negative free cash flow; and that seems to be pushing the stock down after the announcement (-10% to $300 / share). I would view any pressure on the stock price as a buying opportunity, especially if it gets back into its normal trading range which.

A starting point might be 7x TTM revenue ($471B); or around $275 / share. I might even consider buying slightly above that number if I didn't already have so much invested here already.

* The 25% growth rate is impressive; Cloud revenue is now over $30B in the quarter, showing how their business really is transforming; and now could in theory be bigger than search in the next 18 months (Search came in at $63B + 12%).

* YouTube revenue came in at $11.21B, up 9.2% - so its actually a drag on the business :)

* Subscriptions : 150M subscribers; and I would think that this is a massive opportunity to push more consumer AI tools at the market. Growing this should be a priority and creating bundles with other popular products will be a big moat for them going forward.

tecmo
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