Is Alphabet, Inc. overvalued or undervalued?

As of 4 November 2024, Alphabet, Inc. has moved from a fair to an attractive valuation grade, indicating a shift in perception regarding its market value. The company is currently considered undervalued, with a P/E ratio of 21, a PEG ratio of 0.84, and a robust ROCE of 44.23%. These metrics suggest that Alphabet is trading at a discount compared to its growth potential and operational efficiency.
In comparison to its peers, Alphabet's P/E ratio is lower than that of Meta Platforms, Inc., which stands at 26.26, and significantly lower than Spotify Technology SA's P/E of 92.85. Additionally, Alphabet's EV to EBITDA ratio of 15.23 is more favorable than the industry average, reinforcing its attractive valuation. Despite recent stock performance trailing behind the S&P 500 over the past year, Alphabet's strong financial ratios and peer comparisons support the conclusion that it is currently undervalued in the market.