NEW YORK (TheStreet) -- Alphabet (GOOGL) - Get Report shares are rallying 1.03% to $773.65 on Monday morning, helped by the enormous success of company-owned video site YouTube. Overall, the stock has potential to increase 30% to more than $1,000 in 2016, Barron's.com reports.
YouTube is growing at an astonishing pace as parent company Alphabet earlier this year pointed out that year-over-year, viewing time surged 60%.
Even though Netflix (NFLX) stock has risen 141% this year, YouTube is twice as valuable since it has 15 times as many users as Netflix and is growing at a much faster pace than the video streaming service, Barron's.com added.
Overall, Alphabet stock has performed extremely well this year as it is returning cash to stockholders.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ALPHABET INC as a Buy with a ratings score of B+. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and reasonable valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Internet Software & Services industry average. The net income increased by 45.3% when compared to the same quarter one year prior, rising from $2,739.00 million to $3,979.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 13.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although GOOGL's debt-to-equity ratio of 0.05 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.51, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 34.82% and other important driving factors, this stock has surged by 42.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GOOGL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- You can view the full analysis from the report here: GOOGL