Alphabet Operating Margin vs. Beta

GOOG -- USA Stock  

USD 1,238  11.49  0.92%

The Drivers Module shows relationships between Alphabet's most relevant fundamental drivers and provides multiple suggestions of what could possibly affect the performance of Alphabet over time as well as its relative position and ranking within its peers. Please also check Risk vs Return Analysis

Alphabet Beta vs. Operating Margin Fundamental Analysis

Alphabet is rated # 4 in operating margin category among related companies. It is rated below average in beta category among related companies totaling about  0.04  of Beta per Operating Margin. The ratio of Operating Margin to Beta for Alphabet is roughly  24.28 
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.
Alphabet 
Operating Margin 
 = 
Operating Income 
Revenue 
X
100 
=
30.84 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or pay out its debt which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against firm's competitors.
Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of financial instrument to the financial market in which this instrument is traded. For example if Beta of equity is 2, it will be expected to significantly outperform market when market is going up and significantly underperform when market is going down. Similarly, Beta of 1 indicates that an asset and market will generate similar returns during over time.
Alphabet 
Beta 
 = 
Covariance 
Variance 
=
1.27
In a nutshell, Beta is a measure of individual stock risk relative to the overall volatility of the stock market. and is calculated based on very sound finance theory - Capital Assets Pricing Model (CAPM).However, since Beta is calculated based on historical price movements it may not predict how a firm's stock is going to perform in the future.

Alphabet Beta Comparison

  Beta 
      Alphabet Comparables 
Alphabet is rated below average in beta category among related companies.
  Operating Margin 
      Alphabet Comparables 
Alphabet is rated # 3 in operating margin category among related companies.

Beta Analysis

As market goes up, the company is expected to significantly outperform it. However, if the market returns are negative, Alphabet will likely underperform.