Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 1 Jun 2026
GOOGL· Communication Services
Alphabet
Alphabet is a wonderful business wearing a price tag that asks me to pay 28.7 times earnings for the privilege.
Buffett fit
Partial fit
Owner
89
Durability
85
Management
76
Price
15
Score updated 26 Sept 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Communication Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Alphabet, I would sleep well on the operations and poorly on the entry price.
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The durability score of 85 is earned. Earnings per share have grown 17.7% annually and the worst yearly drop on record was only 19.3%, which is shallow for a business this large.
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Management has behaved like owners more than most. The share count has shrunk 2.4% a year, which means are quietly handing me a larger slice each year rather than diluting me.
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There is none, and I will not pretend otherwise. At a 1.6% owner-earnings yield and a of 28.7, the price already assumes years of excellent results, so I am being asked to pay up front for growth I have not yet seen.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 32.7% and of 60.4% show a business that keeps a large share of every dollar it touches.
- 2 of 19.2% trailing and 25.7% over five years means the capital put to work earns far more than it costs.
- 3Earnings per share have compounded at 17.7% a year, outrunning the 11.8% revenue growth and pointing to real operating .
- 4The share count has fallen 2.4% per year, so are steadily enlarging each remaining owner's stake.
Concerns
7- 1Valuation is the whole problem: a of 28.7 and an owner-earnings yield of just 1.6% mean you are paying a premium price for a business everyone already knows is good.
- 2EV/ of 36 leaves no and assumes years of flawless execution simply to justify today's quote.
- 3 is only 55% of net income, so reported earnings overstate the cash actually landing in owners' pockets.
- 4Artificial intelligence is reshaping how people search, and a built on the search box has never faced a threat quite like it.
Price history
$344+145.7%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Alphabet sells attention. It earns most of its money renting space in front of the world's searches and videos, and it does so at a 60.4% and a 32.7% that most companies would trade their headquarters for. Revenue still compounds at 11.8% a year and earnings per share faster at 17.7%, so the engine is neither small nor slowing much.
How this analysis has moved
The call has held across 2 reviews.
Sep 27, 2026 → Oct 4, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Communication Services
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