Sports fans know that even the greatest winning streaks end sooner or later. The same can be said of stocks, even the best companies’ success comes to an end at some point.

A classic example of this is the company formerly known as Google; Alphabet (NASDAQ: GOOG). Its’ net income has taken a sudden; and somewhat inexplicable, nosedive in recent months.

Back in March 2017, Alphabet (NASDAQ: GOOGL) reported a net income of $20.70 billion (€17.49 billion). That fell suddenly to $19.34 billion (€16.34 billion) on June 30, 2017; that’s a decline of $1.36 billion (€1.15 billion) in just three months.

Obviously $19.34 billion (€16.34 billion) in net income makes Alphabet a value investment in every sense of the term, but it also raises questions. Is Alphabet’s winning streak over and is a period of sustained income drops here? Just how safe is Alphabet’s business model from failure and revenue losses.

Alphabet the Revenue Growth Continues

Despite the income drop, there was still a lot of good news in the Alphabet financial numbers reported by our friends at ycharts. Google’s revenues grew by $9.01 billion (€7.61billion) during the first six months of 2017.

Alphabet reported $90.27 billion (€76.25 billion) in revenues in December 2016 and $99.28 billion (€83.86 billion) in June 2017. Nor is there any sign that revenue growth is slowing, Google reported $94.77 billion (€80.05 billion) in revenue in March 2017.

That means Alphabet added $4.50 billion (€3.80 billion) in revenue during first quarter 2017 and $4.51 billion (€3.81 billion) in revenue over the course of the second quarter. It also means that Google’s revenues should exceed $100 billion (€84.47 billion) by the end of third quarter 2017.

The problem; from a value investor’s perspective, is that suddenly Alphabet is making a lot less money. Growth is continuing but the cost of the growth and the profit from it might be accelerating. That means Google might end up having to spend more money to generate less revenue which is bad.

Is Increased Competition Hurting Google?

One cause of this might be all the increased competition in some of Alphabet’s core areas of business such as search advertising and YouTube videos. Companies like Facebook (NASDAQ: FB) and Verizon (NYSE: VZ) are getting more aggressive in those areas.

That means Alphabet might have to pay higher commissions to websites and charge less for advertising. There are also taxes and the costs of the legal dispute with the European Union.

Another problematic area is all the research in areas such as self-driving costs. One very expensive line item in the budget is potentially Waymo; the autonomous vehicle unicorn. Waymo is currently partnering with Avis-Budget (NYSE: CAR) and Fiat-Chrysler (NYSE: FCAU) to test autonomous vehicles in Phoenix.

That sounds costly even though Waymo might be lucrative in the long run. It will probably take several years for Waymo to make money. Until then any money spent on self-driving vehicles is effectively thrown out the window.

Other potential drains on cash include the delivery service; Google Express, and Google Fiber. Fiber is a potential money pit because it’s a scheme to wire communities for high-speed cable TV and internet service. That might be why it’s so slow in coming and only confined to a handful of cities, none of which are outside the U.S.

How Much Money is Google Making?

All this brings us to the all-important question: how much money is Alphabet making these days? The answer it turns out is a lot, this company still generates a lot of cash and float.

Here’s some strong proof that Amazon is still capable of making a lot of money:

• A profit margin of 13.55% on June 30, 2017.

• Assets of $178.62 billion (€150.88 billion) on June 30, 2017. Up from $172.76 billion (€145.93 billion) in March 2017.

• $94.71 billion (€80 billion) in cash and short-term investments at the end of second quarter 2017. That made for a $2.27 billion (€1.92 billion) increase over the first quarter when Google had $92.44 billion (€78.08 billion) in the bank.

• $36.21 billion (€30.59 billion)in cash from operations. This was down from March 2017 when Alphabet reported $37.93 billion (€32.04 billion) in cash from operations. That was a decrease of $1.72 billion (€1.45 billion).

• A market capitalization of $656.45 billion (€554.50 billion) on July 31, 2017.

• An enterprise value of $573.25 billion (€484.23 billion) on July 31, 2017.

All this proves that Alphabet’s business model is still highly profitable but it’s far less stable than we thought. A major reason for this is that Google is highly dependent upon some naturally erratic revenue streams including advertising.

That means sudden fluctuations in revenue; and income, are more likely than many investors think. It also has some profound implications for value investors and the entire economy.

Is Google Too Big to Fail?

The troubling question for both policymakers and investors here is Alphabet too big to fail? Could it falter and if it did would the government, bail Google out?

My take is that Alphabet; like Berkshire Hathaway (NYSE: BRK.B) can operate for several years on the cash that has in the bank. The company is also capable of purchasing new profit making assets. Therefore it’s not too big fail because it cannot fail right now.

One of my few reservations about Alphabet is its’ failure to make more aggressive acquisitions. Perhaps the company should use all that cash it has in the bank to expand into new businesses; (such as insurance, ecommerce, telecom, entertainment production or banking enterprises) or acquire existing profitable tech companies (for example: Adobe or Salesforce.com).

That’s more of a gripe about strategy than a real objection but it shows that there are potential weaknesses at Alphabet. It also shows that Alphabet is a value investment; because there is potential to greatly increase the business’s valuation – if the management wishes.

Is Google a Value Investment?

Alphabet is a value investment because of all the cash it has. Personally I think Google is undervalued at prices like $947.42 (€800.29) a share. There’s a lot of potential for share value growth here, in addition the 13.93% return on equity investors received on June 30, 2017.

The bottom line is that Alphabet is still a great value investment and will remain so for years to come. Those looking for a safe, modern day “widows and orphans stock” would be well-advised to cough up some cash for a few shares of the company formerly known as Google.

A slightly different version of this article previously appeared at Market Mad House.