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Alphabet's stock is plumbing (roughly 26% down) since the beginning of the year, just like most of the market, but the big question to be done: is Alphabet's mojo (“single value proposition”) dead?

I don’t have the answer to that, but I can share some data, analysis and my personal opinion to decide if Google is a good choice for my portfolio. (Please note that this analysis considers my personal situation and you should your own).

If we do a quick analysis of the last earnings that Alphabet released recently, we might be bivouacked to consider that yes, since the EPS and revenue were below the expected. This means that the company missed the targets predicted by the market. And this is one of the reasons why the company continues in this deep, alongside inflation and war climate.

However, to review a specific company, we should look for more information to have a more informed decision, like on the financial information released. 
Analysing the cash flow statement, we see that the company had a reduction of the cash and cash equivalents in the first quarter when compared with the previous period, take this in mind. This could occur for a set of different reasons, for Alphabet it’s possible to understand that these happened because of an increase of balance in their accounts receivable (meaning that their customer's debt is increasing). Additionally, the company also increase the amount spent on the share buybacks.

Before moving forward on this matter, let us understand what I believe this means for the shareholder. The growth of accounts receivable could be happening due to the financial stress that many companies and consumers (part of which are Google clients) are facing, this hypothesis still needs to be confirmed in the following quarters' release but we should keep an eye on it, confirming if its a pattern or a transitory effect. Relating to the buyback of shares, the fact that has increased means good news for the current investor, because that means that are fewer shares available in the market, meaning a price increase for the share.

If we look at revenue for the first quarter compared to last year's first quarter, there was a substantial move to the upside (68 billion vs 55 billion). However, the intriguing finding is that net income went down (17,9 billion vs 16 billion).
As expected in a profitable business the income from operations went up as well from the previous 20 billion to 16 billion, this happened because of an increase in costs that reduced Alphabets margin slightly.

In terms of balance sheet information besides the already mentioned increase in accounts receivable, exists another good signal that is the repayment of debt since it is expected that the interest rates keep increasing at this faster pace.

After considering a lot of Alphabets' qualitative and quantitative information, it was time to create my Discounted Cash Flow (DFC) model dividing the company into 3 different periods. To achieve it was created a financial forecast and defined a discount factor that applies to my personal finances. The result of this analysis allows me to conclude that Alphabet stock seems to be under-evaluated at the current price of 2.094$.

> Note 1: None of the information mentioned in this report is financial advice and you should always do your own research.

> Note 2: The author of this report is invested in Google.

> Note 3: Google will on the 15 of July have a stock split of 1:20, meaning that the price of a single share will decrease but the total value of the current shareholders will remain.


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