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One financial metric you might not hear mentioned very often may be worth a look when considering an investment in global Internet search powerhouse Google Inc. (NASDAQ:GOOG).

On a price-to-earnings-to-growth [PEG] basis, Citigroup analyst Mark Mahaney says Google is trading at a 40% to 60% discount compared to other large capitalization Internet stocks.

While Google shares are at a record high, he nonetheless thinks this “excessive” PEG discount leads to a positive risk-reward outlook for the stock.

Google’s share of search queries hit a record high of 67% in April; its navigation bar is succeeding, helping 16% of Amazon.com’s (NASDAQ:AMZN) traffic come from Google; while Google’s non-search applications continue to gain momentum, Mr. Mahaney said in a note to clients.

He says existing advertisers will have more format choice over time with Google, while brand advertisers will become more attracted to its display and video. And for every percentage point gain in the Internet advertising market, Mr. Mahaney estimates it means an additional US67¢ in earnings per share.

He reiterated his “buy” rating and US$600 price target on Google shares.

GOOG 1-yr chart:

GOOG 1-yr chart

Source: Citigroup: Google Trading At 40%-60% Discount On a PEG Basis