Google Wears the Garlands
Updated from 8:54 a.m. EDT
The Blodgetting of Google (GOOG) intensified Friday as a growing contingent of Wall Street analysts predicted the stock has another 20% of upside or more.
Reflecting the company's blowout third quarter, price targets or implied value estimates went above $400 at brokerages including Goldman Sachs, First Albany, UBS and RBC. The Google love-in came as the stock added $39, or 13%, to $342.20 in early action Friday.
For its third quarter ended Sept. 30, the Mountain View, Calif., Net search giant made $382 million, or $1.32 a share. That's up from the year-ago $52 million, or 19 cents a share. Year-ago numbers were hit by a $200 million settlement of disputes with Yahoo! (YHOO).The company said its earnings based on non-generally accepted accounting principles were $1.51 a share, up from $1.33 in the second quarter. Net revenue, excluding the so-called traffic acquisition costs that the company shares with its Web advertising partners, hit $1.05 billion. Analysts surveyed by Thomson First Call had forecast a third-quarter profit of $1.36 a share on net revenue of $943 million. "Although this is typically a slower season for Internet properties, we had another exceptional quarter," said CEO Eric Schmidt. "Our focus on end users and on quality of information and advertising worldwide continues to work extremely well. We are very pleased with how well this is working at scale." Schmidt was far from the only one. Wall Street applauded loudly after Thursday's regular trading brought a steep afternoon selloff. "The top line looks very good," says Chuck Jones of Atlantic Trust Stein Roe in San Francisco, which owns Google shares. The results "were better than expected just because of the size of the company." "They continue to fight back that law of large numbers," says Darren Chervitz, director of research at the Jacob Asset Management in New York, which owns shares of Google and TheStreet.com (TSCM), publisher of this Web site. "We're looking at year-over-year revenue growth rates of about 100%."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV