Google to Hit $600 a share? Looks That Way, Media Writer Says
From Staff Reports
Google Inc. (GOOG) at $600 a share? Media analyst and columnist Paul R. La Monica says it’s more than just possible – it’s probable. The shares of the search-engine gorilla dipped below the $500 level in mid-August after the company missed its second-quarter earnings numbers in July. Then there’s the credit crunch, which was “certain” to hamper growth, many so-called experts believed. But, since then, Google’s shares have roared. The company’s shares closed yesterday (Thursday) at $552.83, up $5.98, or 1.09%, each.
Indeed, since mid-August, Google’s shares have gained more than 10%, and are near their all-time high. Given that, it “seems likely” that it’s “only a matter of time” before Google will hit the impressive $600 plateau, La Monica writes.
According to the columnist and CNNMoney.com editor, the most recent market-research data supports his projection. Data from the two top Web tracking firms, Nielsen//NetRatings and comsScore (SCOR), both showed that Google has built up its lead over rival Yahoo! (YHOO). It maintained its huge market-share advantage over Microsoft Corp.’s (MSFT) MSN unit, Time Warner Inc.’s (TWX) AOL unit, and others.
Wall Street analysts expect Google to boost its earnings by 44% this year, 28% in 2008 and grow at an average annual pace of 34% for each of the next five years, La Monica says. That’s a much higher projected growth rate than Yahoo – yet Yahoo trades at 46 times projected 2008 earnings. Still, even Google isn’t cheap: The shares trade at 28 times projected 2008 earnings, meaning they aren’t for the faint of heart. And as a company grows, it gets tougher and tougher for it to keep growing at a high-double-digit rate – 34% a year for each of the next five years seems aggressive. And, yet, the company has done nothing but perform since it went public.
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News and Related Story Links:
- CNNMoney.Com:
Google at $600 a Share? Yes: Here’s Why - Money Morning Investment Research:
The Coming Big Money Bang.
