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Google Inc. Stock Buy Recommendation Reiterated (GOOG)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Google (Nasdaq:GOOG) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

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Highlights from the ratings report include:

  • GOOG's revenue growth has slightly outpaced the industry average of 33.2%. Since the same quarter one year prior, revenues rose by 36.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GOOG's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.95, which clearly demonstrates the ability to cover short-term cash needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 29.20% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GOOG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • GOOGLE INC has improved earnings per share by 5.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GOOGLE INC increased its bottom line by earning $32.47 versus $29.74 in the prior year. This year, the market expects an improvement in earnings ($45.72 versus $32.47).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet Software & Services industry average. The net income increased by 6.7% when compared to the same quarter one year prior, going from $2,704.00 million to $2,886.00 million.

Google Inc., a technology company, builds products and provides services to organize the information and make it universally accessible and useful. Google has a market cap of $212.1 billion and is part of the technology sector and internet industry. The company has a P/E ratio of 24.4, above the S&P 500 P/E ratio of 17.7. Shares are up 12.1% year to date as of the close of trading on Tuesday.

You can view the full Google Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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