Benjamin Taylor

Is Google a Great Buy Now?

It was a much better buy at $260 back in November of 2008. But with $17 billion in cash and $5.5 billion in free cash flow (FCF), Google is nothing to sneeze at. FCF also grew by 100% from '06 to '07 and 66% from '07 to '08.

Indeed, Google's outrageous growth is behind it but I don't have a problem seeing this stock at $400 which would give it a EV/FCF ratio of somewhere in the 16 to 18 range. In moderate times, that's a pretty reasonable price. It also represents a 28% premium over today's price.

Disclosure: I and my clients own shares of GOOG.