The firm said Google is the clear leader in search, maps and its web browser Chrome, and added that their services along with its video sharing site YouTube are unmatched.
Jefferies analysts credit Google's "core expertise" in delivering and organizing content through its cloud data centers for its dominance.
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"Our analysis suggests that Google provides the majority of most popular consumer cloud services, which are expanding penetration through Android, Chrome, iOS, Windows, and other devices, unlike Apple's iCloud which remains focused on iOS devices," noted Jefferies.
Shares of Google are lower by 0.66% to $540.92 in early market trading today.
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 multiple 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in stock price during the past year and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 27.8%. Since the same quarter one year prior, revenues rose by 20.1%. 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.
- GOOGL's debt-to-equity ratio is very low at 0.05 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 4.03, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $5,994.00 million or 17.92% when compared to the same quarter last year. Despite an increase in cash flow, GOOGLE INC's average is still marginally south of the industry average growth rate of 25.51%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: GOOGL Ratings Report