NEW YORK (TheStreet) -- Shares of Google (GOOGL) - Get Alphabet Inc. Class A Report are up 0.52% to $513.11 in pre-market trade after it was reported that the company is close to investing about $1 billion in Space Exploration Technologies Corp. to support its nascent efforts to deliver Internet access via satellites, sources told the Wall Street Journal.
The investment would value SpaceX, backed by Tesla Motors (TSLA) - Get Tesla Inc Report CEO Elon Musk, at over $10 billion, sources added. It isn't clear what exact stake Google could end up with in the fast-growing space company, the Journal said.
If Google completes the deal, it would be the Internet company's latest effort to use futuristic technology to spread Internet access to remote regions of the world, alongside high-altitude balloons and solar-powered drones. By extending Web access, Google increases the number of people who can use its services,, according to the Journal.
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Google and SpaceX had no comment.
TheStreet Ratings team rates GOOGLE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOOGLE INC (GOOGL) a BUY. 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 28.8%. Since the same quarter one year prior, revenues rose by 20.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- GOOGL's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.03, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $5,994.00 million or 17.92% when compared to the same quarter last year. Despite an increase in cash flow, GOOGLE INC's average is still marginally south of the industry average growth rate of 26.48%.
- GOOGLE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GOOGLE INC increased its bottom line by earning $37.91 versus $32.47 in the prior year. This year, the market expects an improvement in earnings ($51.46 versus $37.91).
- You can view the full analysis from the report here: GOOGL Ratings Report