Google: Higher YouTube Margins Won't Help

An increase in YouTube's margins will have little impact on the stock.
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Google

(GOOG) - Get Report

competes with

Yahoo

(YHOO)

(NASDAQ:YHOO),

AOL

(AOL)

, and

Microsoft

(MSFT) - Get Report

in the search advertising market.

We currently have a Trefis price estimate of $683 for Google's stock, about 35% above the current market price of $504.

Trefis members have created forecasts for a key driver of Google's stock over the last week: YouTube EBITDA Profit Margin. The members' forecast suggest that YouTube EBITDA Profit Margin will be roughly in line with the Trefis forecast.

We estimate that YouTube constitutes around 3% of the $683 Trefis price estimate for Google's stock. Below is the chart showing recent estimates created by Trefis members for YouTube EBITDA Profit Margin in detail.

The average of forecasts for YouTube EBITDA Profit Margin created by Trefis members indicated a projected increase from -8.5% in 2010 to around 25% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from -10% in 2010 to 20% by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Google's stock.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Google's stock to YouTube EBITDA Profit Margin.

Our complete analysis for Google's stock is

here

.

Trefis

is a financial community structured around trends, forecasts and insights related to some of the most popular stocks in the U.S.