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.
If you missed this stock, don’t despair. There are always others on the horizon.
News and Related Story Links:
- CNNMoney.Com:
Google at $600 a Share? Yes: Here’s Why