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GOOG Continues To Be Weak
Markets having given back some early gains on positive earnings reports (GE, Apple). Initial jobless claims fell last week but held above the key 400,000 level, hinting at some loss of momentum in the labour market recovery. Shares of GOOG continue to be weak, down over 1% as investors fear rising costs. Upcoming catalysts include continued Android momentum; regaining ground in China and pushing into other emerging markets; updated software, adoption and media partners for Google TV; and progress in other newer initiatives (+1, location-based services, music-service, mapping, gaming, etc.). The stock trades at approximately 12x Enterprise Value / EBIT, inexpensive relative to peers and historical trading levels.Time To Cut Up The Google Credit Card? (Datamation)
Google is still making truckloads of cash. But it’s also spending money faster than ever. The real problem is the long-term prospects for Google’s continued dominance. While 27% revenue growth sounds good, consider also that spending is growing much faster (research increased 50%, sales and marketing 69%). Some 99% of its revenues come from ads. The trouble is, ad revenue tends to rise and fall with the economy and costs tend to be more persistent. Given that imbalance, it’s becoming hard to understand why Google is investing in technology like self-driving cars.
Google Attacking Huge New Market (Business Insider)
Google’s new service, Google Earth Builder, shows how Google could move up into vertical markets, which are more expensive and complicated. In this case, Google is targeting the geographic information systems market, where installations can cost millions of dollars. Google says Earth Builder will be competitively priced with software from GIS vendors like Esri, which means each sale could net big bucks for the company.
Intel Focuses On Android (CNet)
Intel CEO Paul Otellini said Intel is now “focusing on carriers who want their own devices and also on handset manufacturers.” It’s probably safe to say that more than a few of those handset makers will be using Android. So, the question is, as Intel revs up its handheld push with future Atom processors will this make Android phones an even more potent rival to Apple’s iPhone? And will it result in compelling Android-based tablet designs that begin to chip away at Apple’s tablet dominance?
Daily Trader: Google Fine Despite Investor Reaction To Earnings (Seeking Alpha)
Shares currently trade at 15.5x this year’s earnings and 13x next year’s estimates. For a company that has been able to grow earnings at a 30% clip over the past five years, a 15 multiple is more than fair to pay for the stock. Even if the company can only grow at 15% over the next year, the stock would be worth just over $600 per share.
Google Donating Money And Resources To Startup America (CNet)
Google and more than 10 other companies are kicking in a total of $400 million and resources to the Startup America Partnership, the White house campaign to promote high-growth entrepreneurship across the country. The companies will also provide services, training and other benefits that will go directly to entrepreneurs trying to get their ideas and businesses off the ground.