NEW YORK (TheStreet) -- Google (GOOGL) - Get Alphabet Inc. Class A Report stock was upgraded to "buy" and added to the "conviction list" at Goldman Sachs this morning. Their price target was raised to $800 from $660.
Earnings estimates were raised for 2015, 2016 and 2017 to $24.38, $29.79 and $36.03 from $24.17, $27.61 and $32.89, respectively.
The firm said Google is beginning a "multi-year cycle" for margin expansion, according to Benzinga, pushing earnings outperformance.
Google also will benefit from further monetizing mobile search and YouTube, Goldman said.
"We believe accelerating monetization in mobile search and YouTube coupled with an eye on expenses at the core is continuing to bear fruit and see the new operating framework and cost initiatives set forth by the new CFO impacting CY16 and beyond," Goldman said in a note.
Shares of Google were up 4.90% at $642.50 in pre-market trading on Wednesday.
Separately, TheStreet Ratings team rates GOOGLE INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOOGLE INC (GOOGL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GOOGL's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 11.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although GOOGL's debt-to-equity ratio of 0.05 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.60, which clearly demonstrates the ability to cover short-term cash needs.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Internet Software & Services industry average. The net income increased by 17.3% when compared to the same quarter one year prior, going from $3,351.00 million to $3,931.00 million.
- Net operating cash flow has increased to $6,985.00 million or 24.13% when compared to the same quarter last year. In addition, GOOGLE INC has also modestly surpassed the industry average cash flow growth rate of 19.45%.
- You can view the full analysis from the report here: GOOGL Ratings Report