Google's market cap nears $400B post-earnings; PT hikes abound


13 sell-side firms have upped their Google (GOOG +3.6%) PTs following the company's mixed Q4 results and split announcement. Shares remain higher on a down day for equities.

Google's market cap now stands at $395B, and its enterprise value (market cap - net cash/investments) of $342B exceeds Apple's $301B.

Needham (Buy, PT raised to $1,350 from $1,150) is pleased with Google's accelerating international paid click growth (likely driven by mobile), and the strong performance of its "Other Google Revenue" segment (fueled by the Nexus 5 and Chromecast).

RBC (Outperform, PT upped to $1,400 from $1,300), like others, is happy Motorola ($384M Q4 op. loss) will soon be out of the way, and notes Google's core international revenue rose 30% Y/Y. It's also pleased traffic acquisition costs remain under control, and isn't too worried heavy investments led Google's core op. margin to fall 220 bps Y/Y.

UBS (Buy, PT raised to $1,350 from $1,300) thinks Google's cost per click (-11% Y/Y in Q4) will improve as Enhanced Campaigns and product listing ads gain more traction.

Shares currently go for 20x 2014E EPS (exc. net cash).

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Comments (4)
  • Transcripts&10-K's
    , contributor
    Comments (1215) | Send Message
     
    "Shares currently go for 20x 2014E EPS (exc. net cash)."

     

    More than 2X the same measure for MSFT, AAPL, and a slew of other tech names - interesting...
    31 Jan 2014, 12:17 PM Reply Like
  • dgulick
    , contributor
    Comments (2259) | Send Message
     
    It's all about growth. The more I think about this, the more I think the market has it right. And Google selling Motorola proves it, the physical devices are merely commodities with massive competition pressuring margins, it's the global mobile ad space and apps that will be the largest future cash flow, and Google owns it. Apple is hardly out of the game mind you, approaching things from more of a subscription/ad-free basis (selling less ads, but charging more upfront) which has huge appeal to the high end customer (vs. Google sacrificing margins for market share). My investment? I'm betting on both!
    31 Jan 2014, 12:35 PM Reply Like
  • ks_droid
    , contributor
    Comments (152) | Send Message
     
    Great news, Google totally deserves the valuation, it's the biggest company of our lives...
    31 Jan 2014, 01:24 PM Reply Like
  • Azazello
    , contributor
    Comments (1779) | Send Message
     
    @ks_droid celebration:
    selling your usage data to advertisers to tempt you to buy more commodities—viva Karl Marx, viva! Marshall on Google: sweet amoral Asperger engineers of the World, unite!
    From an investment point of view: Wall Street is in love with its mirror image (profit for profit's sake with no compunctions) but the tide is turning and folks are waking up to the business model that may spell trouble in the long run. The backlash may not be so pretty...
    20 Feb 2014, 08:41 AM Reply Like
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