google inc five year outlook from credit suisse

Google Inc (NASDAQ:GOOG) will likely benefit from the current trends in mobile searches, according to analysts at Credit Suisse. The firm conducted an examination of Google’s business model to come up with a picture of what the search engine giant could look like five years from now.

The main focus of today’s report from Credit Suisse was on what impact the tablet and smartphone revolution would have on Google Inc (NASDAQ:GOOG)’s revenue. According to analysts at the bank, they believe the reason shares of Google have traded sideways this year is mostly because of uncertainty due to the evolution of mobile search and other search trends. They believe Google Inc (NASDAQ:GOOG) can sustain a 16 percent compound annual growth rate even as the trend of mobile search continues to increase.

Credit Suisse also said Google is in “a prime position to benefit from incremental search ad budgets on mobile.” In fact they expect compound annual growth revenue from smartphone searches alone to be 39 percent, although they don’t see revenue from searches on desktop computers completely disappearing. They believe that growth of search revenue on tablets will be similar to that of searches on desktop computers.

Credit Suisse analysts are not changing their earnings per share estimates or topline revenue much, but they do say they have “a greater level of conviction” on the stock. They’re reiterating their Outperform rating and keeping their discounted cash flow at $847. They have set their price target at $847.

Today shares of Google are up just slightly. They increased from around $700 per share to $708 per share but then settled back down to just about $704 per share in early afternoon trades.