Google +3% as Street praises share gains, pricing

9 firms have hiked their Google (GOOG, GOOGL) targets after the company reported mixed Q2 numbers, a 25% Y/Y increase in paid clicks, and a smaller-than-expected 6% drop in cost per click (CPC). BGC has upgraded shares to Buy.

"With now four quarters in a row of 20%+ Web sites revenue growth, Google’s search business appears to be benefiting from a virtuous cycle of audience growth and pricing power," gushes Canaccord ($715 PT). It sees product listing ads, Android share gains, and Google's efforts to integrate more data within search results boosting future growth.

JPMorgan sees improving CPC trends for Google sites pointing to "more material improvements in mobile monetization, or at least that the mobile pricing gap is becoming less of a drag." The firm's 2014 revenue estimate has been hiked, but its EPS estimate has been cut following stronger-than-expected spending.

SunTrust is a little concerned about a decline in U.S. growth to 12% and soft ad network prices (mobile is viewed as a culprit). But it's also pleased with paid click growth, and unconcerned about Nikesh Arora's pending departure. Cantor thinks the top-line numbers suggest Google "continues to gain share both in search and display."

Meanwhile, the Telegraph reports Google is looking to bring Fiber to the U.K. The company suggested on its CC (transcript) more Fiber announcements are on tap.

Prior Google earnings coverage.

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Comments (8)
  • lords
    , contributor
    Comments (142) | Send Message
    Let's see:
    -- Earnings. Missed
    -- rev growth missed if you exclude rev from companies acquired and Motorola sales.
    -- Q/Q sales inclusive of all gimmicks increased just 2%
    -- PE now 32 with mkt cap of 410 billion
    -- web ads are slowing and utube growth slowed.
    -- insiders are selling
    -- talent is leaving
    -- liability in euro zone
    -- expense grew


    And finally Feds says no bubbles just like before realestate bubble but the stock kt cap goes up by 25 billion in one day now at 410 billion.
    18 Jul 2014, 08:28 PM Reply Like
  • Davidoff
    , contributor
    Comments (409) | Send Message
    Dot-com bubble, here we go again!
    20 Jul 2014, 06:30 PM Reply Like
  • DanoX
    , contributor
    Comments (3469) | Send Message
    More Google hot air.
    18 Jul 2014, 09:23 PM Reply Like
  • FunnyBunny
    , contributor
    Comments (14) | Send Message
    "lords" must be one of the geniuses who sold the stock at 568 on July 17th as the stock plummeted due to a bunch of people fearing the q2 earnings report.
    Now you have sour grapes as the stock went to 596 the day after.


    I have been buying and selling this stock for the past year and I have made huge returns on it. The patterns have become quite predictable, however after the q2 earnings report there will be a little bit of an adjustment on that, which I am quite curious to see. The one thing you cannot forget about google is that it has the perception of being a great investment; and that fuels the small bubble that is always above it. There are times when the stocks comes back to reality, but within a day or two it goes way up.


    Google is a great investment for both long-term and short-term, depending on your strategy. Long term investment might be risky, because we frankly do not know where the company will be in 6 years. The stock may increase by a multiple of 100 in that time, or it really might shrink to 10-20 % of its current value. Despite how big the company is, it still has a lot of potential for growth and they certainly are investing in a lot of growth and even risky projects. If those projects pay off, you can turn a small sum investment into a kings ransom.
    However if you buy and sell in the short term like myself, you can make a lot of money from people who undervalue and overvalue the stock.
    The reality is that Google is bigger than Apple or Microsoft now, and while both those companies are investing in growth Google is the one leading the pack in most things; and growing at a much faster rate than either apple or Microsoft.
    A 10k investment in google may turn into 1 million in 6 years (when they plan to market a bunch of new innovative tech like self driving cars) or if many of their bigger projects fail, then in 6 years that 10k investment might shrink to 1-2 k. The risk vs reward means that it would be smart to have google as a significant part of your portfolio.


    People who put down the stock are frustrated that everyone seems to make money from it except for themselves.
    19 Jul 2014, 11:53 AM Reply Like
  • lords
    , contributor
    Comments (142) | Send Message
    I am glad for you. Mkts are no longer based on valuation buisness etc. driven by fed ponzi, easy money, leverage and manipulation via collusion from the big boys via HFT trading.


    Debt levels has more then doubles since 2009 overall, corporate debt has increased from less 1 trillion 10 years back to now 14 trillion and growing at 1.3-1.5 trillion.


    Trsy, corp,muni total debt now is 60 trillion and growing at around 3-5 trillion a year.


    I am pleased to stay away from this mkt at these levels. Soon will be buying puts. As everyday goes by the inventory level at the market makers is increasing and the repo mkt is showing stress as they do not have much more collateral to deposit at the Feds for more leverage.
    19 Jul 2014, 12:49 PM Reply Like
  • 22643611
    , contributor
    Comments (2099) | Send Message
    @lords, your diatribe is simply a cop-out for those who have missed the ride up.


    Overvalued tech stocks going crazy is not some phenomenon that has only happened since 2009.


    Clearly you are not a student of investment history.
    19 Jul 2014, 04:29 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
    Google is an amazing company with some great properties. I see a bright future for it.
    20 Jul 2014, 01:31 AM Reply Like
  • DanoX
    , contributor
    Comments (3469) | Send Message
    When the Bubble bursts, Netflix, Amazon, and Google are all hot air, the real innovation is between those companies is having Wall Street on the hook.
    20 Jul 2014, 01:24 PM Reply Like
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