Alphabet Inc. (Class A) (GOOGL) DCF Valuation
Alphabet DCF: $72B TTM FCF, $95B net cash, 12% near-term growth on Search + Cloud.
Communication Services · Founded 1998 · Beta 1.05
Alphabet Inc. (Class A)
Current price: $175.20 · Market cap ≈ $2155.0B
Alphabet's $72B TTM free cash flow is dominated by Search but increasingly diversified across YouTube ads, Google Cloud, and Waymo. The $95B net cash position is the largest in our coverage. The company trades at a discount to the S&P 500 partly due to antitrust overhang and AI-disruption concerns on Search.
DCF Valuation Inputs
High-growth phase
Decay/growth normalization
Perpetual (≤ WACC)
Must be > terminal growth
in millions
Enterprise Value
$1,615M
Equity Value
$1,710M
Per Share
$0
Upside / (Downside)
-100.0%
PV of explicit FCF
$368M
Terminal value
$1,874M
PV of terminal
$1,246M
Terminal % of EV
77.2%
| Year | Growth | FCF ($M) | Discount Factor | PV ($M) |
|---|---|---|---|---|
| 0 | base | $72 | 1.000 | — |
| 1 | 12.0% | $81 | 0.922 | $74 |
| 2 | 8.0% | $87 | 0.849 | $74 |
| 3 | 8.0% | $94 | 0.783 | $74 |
| 4 | 8.0% | $102 | 0.722 | $73 |
| 5 | 8.0% | $110 | 0.665 | $73 |
| Terminal | perpetual | — | — | $1,246 |
Discount factor = 1 / (1 + WACC)ⁿ. Terminal value computed using the Gordon Growth Model: TV = FCF_N × (1 + g) / (WACC − g), then discounted back to present.
| g ＼ WACC | 6.5% | 7.5% | 8.5% | 9.5% | 10.5% |
|---|---|---|---|---|---|
| 1.5% | $0 | $0 | $0 | $0 | $0 |
| 2.0% | $0 | $0 | $0 | $0 | $0 |
| 2.5% | $0 | $0 | $0 | $0 | $0 |
| 3.0% | $0 | $0 | $0 | $0 | $0 |
| 3.5% | $0 | $0 | $0 | $0 | $0 |
Highlighted cell is your current WACC × terminal-growth assumption. Cells beyond WACC ≤ g are undefined (Gordon Growth fails).
GOOGL DCF: At Default Assumptions
| Item | Value | Notes |
|---|---|---|
| Current price | $175.20 | Market |
| Intrinsic value (per share) | $0.14 | DCF model output |
| Upside / (Downside) | -99.9% | vs current price |
| Enterprise value | $$1,615M | PV of explicit FCF + terminal |
| Equity value | $$1,710M | EV − net debt |
| Key fact | Net cash position: ~$95B (largest in coverage) | |
Numbers reflect TTM fundamentals + default DCF assumptions (8.5% WACC, 2.5% terminal growth, 12% Year-1 growth, 8% Years 2+). Use the calculator above to run your own scenario.
GOOGL Sources & References
- SEC EDGAR: latest 10-K filing, 10-Q filings, and proxy statement for Alphabet Inc. (Class A) (GOOGL).
- Yahoo Finance: real-time price snapshot, analyst consensus growth estimates, and 52-week range.
- S&P Capital IQ: WACC build (cost of equity via CAPM + after-tax cost of debt).
- Federal Reserve Economic Data (FRED): risk-free rate for CAPM, sector beta benchmarks.
- Damodaran Online (NYU): Communication Services sector WACC and beta benchmarks for cross-validation.
DCF models for other large-caps
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Author
Maya Chen, CFA
Chartered Financial Analyst
Independently reviewed
Dr. Aaron Pak, PhD
Doctor of Kinesiology & Public Health
Last reviewed: August 12, 2026 · Next scheduled review: quarterly
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Cross-checked against authoritative formulas (IRS, NIST, ACM) and updated for 2025/2026 tax years and rates.
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