Google (GOOG) Hits $1,000 For The First Time in History

Shares of Google (GOOG) made history last week, with shares surging above $1,000 for the first time ever after the company posted third quarter earnings that comfortably surpassed analyst estimates. The company reported adjusted earnings of $10.74 per share on revenue of $14.89 billion. Analysts had expected the company to earn $10.34 per share on revenue of $14.79 billion. Daily Chart

Googleâ s 12% year-over-year top line growth was fueled by paid clicks hitting the highest rate of growth in the past year.
This growth offset an 8% decline in average cost-per-click - the amount advertisers pay Google when Internet users click their ads. International growth was even more impressive, with the company posting a 32% year-over-year jump in revenue. Googleâ s big beat prompted Wall Street analysts to suddenly bump up their price targets dramatically. More than 16 brokerages raised their price targets to a range between $880 and $1,220, with Deutsche Bank being the most optimistic, increasing its price target by 26%. J.P. Morgan analysts were also upbeat, stating, "We view solid paid clicks growth to be a good indicator of demand, driven by the continued shift to mobile." Back in February, Google introduced a new service which combined the advertising markets on smartphones, tablets, and desktops into a single platform to offset declines in cost-per-click rates. Desktop ads are traditionally more expensive than mobile ones - a dilemma that Yahoo (YHOO) and Facebook (FB) have also been struggling with. Analysts at RBC Capital Markets also highlighted Googleâ s untapped growth potential in YouTube, the worldâ s most popular video streaming website, noting, "We estimate that Google's key YouTube asset generated approximately $4 billion in revenue in 2012, positioning Google extremely well for the strong growth in video advertising." YouTube video-ads rose ver 75% year-over-year, with 40% of all traffic coming from mobile devices. Jefferies analysts pointed out that Google Android remains the dominant force in mobile devices, and its Google Play Store will be the key to growing its top line. Google also recently released its Moto X smartphone, notably the first smartphone to be manufactured in the United States, during the quarter. The Nexus 5, which it manufactured with South Korean tech giant LG, recently appeared on the Google Play store for $349. Google has risen 44% over the past year, while Apple has slumped 20%. Google currently trades with a 5-year PEG ratio of 1.37 with a forward P/E of 19.5 - hinting that the stock is still an undervalued growth stock at current prices. Other News About GOOG Google's Third-Quarter Beats as Ad Volume Grows, Stock Flirts $1,000 Level Google surges over $1,000 for the first time ever. Google Shares Hit $1,000 After Strong Earnings Is Google worth $1,000 per share? Other Stocks in the News HSBC Unit to Pay $2.5 Billion in Fraud Case HSBCâ s fraud headaches continue. Morgan Stanley Is The New Winner On Wall Street With A 50% Rise In Revenue Increased bets, bigger profits -- has Morgan Stanley learned anything? Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Oct 21, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

Copyrighted 2020. Content published with author's permission.

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