Google (NASDAQ:GOOG) is, as with any similar-sized technology behemoth, at a point where the Law of Large Numbers renders extrapolation of past growth rates a foolish exercise. But even if Google's forward earnings growth rate is unexceptional, I believe the market is assigning an inordinately low price to its stock.

There are many ways to value a company. One of my favorites -- discounted cash flows -- is inherently subjective and very sensitive to potentially biased assumptions, especially when using multi-stage models that call for estimating how long/strong a period of above-average growth will persist followed by a transition to "stable" growth.

But if we simplify things by assuming that Google no longer has any competitive advantages and it will only be able to limp along at the nominal growth rate of the broader economy, say 5.5%, we can use the following "stable rate" valuation formula to see what is implied by the current market price of the stock:

*FCFF*: Free cash flow to the firm (I'll use cash from operations less capital expenses)

*g*: Expected growth rate for FCFF

*WACC*: Weighted average cost of capital (I'll use Bloomberg's WACC for GOOG, 11.2%)

The table below is a matrix of values for GOOG's shares calculated using the above formula, dividing the firm value by GOOG's 325 million shares outstanding, and adding GOOG's $128/share cash (net of debt) to arrive at a theoretical value for GOOG's stock. I used GOOG's cash from operations less capital expenditures, or $11.127 billion, for 2011 FCFF as the baseline:

This admittedly simplistic analysis does not address whether management will make intelligent choices with its cash hoard, the acquisition of Motorola Mobility will pan out, or any of the other questions investors have about the company's direction. The purpose of this exercise was to demonstrate that at the current quotation, GOOG shares appear to be modestly undervalued even if growth languishes at 5% -- the approximate earnings growth rate for the S&P 500 for the past 100 years.

If GOOG can grow at a rate of 5.5% or better, and Bloomberg's calculation of GOOG's WACC is close to realistic, then its shares are worth more than $800/share.

**Disclosure: **I am long GOOG.