Ahead of the second quarter earnings report of Google Inc (NASDAQ:GOOG), Barclays Equity Research analyst Anthony DiClemente said that the stock price of the search engine giant could reach more than $1000 during an interview on CNBC’s Fast Money on Thursday.
Shares of Google Inc (NASDAQ:GOOG) are trading around $913.70 per share, down by nearly 1% at the time of this writing. The search engine giant is scheduled to report its financial performance for the second quarter after market close this afternoon, July 18.
Tiger Legatus Master Fund was up 0.1% net for the second quarter, compared to the MSCI World Index's 7.9% return and the S&P 500's 8.5% gain. For the first half of the year, Tiger Legatus is up 9%, while the MSCI World Index has gained 13.3%, and the S&P has returned 15.3%. Q2 2021 hedge Read More
Google Enjoying ‘Scarcity Value’ For Shares
During the interview, DiClemente emphasized that the stock of the search engine giant is great, and he believed that there is a “scarcity value” in shares of Google Inc (NASDAQ:GOOG). He explained, “I just think when you look at the market, there’s a real dearth of large-cap names in technology that are consistently growing revenue at 20 percent, so you could count them on your fingers.”
DiClemente recommended an Overweight rating for Google Inc (NASDAQ:GOOG). He said, “We do think it’s going to $1,000.” In addition, he argued that the valuation for the company is not over-extended.
According to DiClemente, “If you look at next year’s Street earnings consensus, and you take 20 times earnings, I don’t think that’s unreasonable at all for a company with growing revenue consistently 20 percent. You get to $1,066.”
Google’s Rating Deemed Conservative By Barclays
Furthermore, the analysts explained that some Google Inc (NASDAQ:GOOG) products such as the Google Glass or the self-driving car were give a moderate value. According to DiClemente, Barclays’ model is conservative and it focused on the improvements in the company’s core search business, which remains dominant.
“Really, our model is conservatively just looking for improvements in terms of the core search business that Google continues to dominate, their dominance on mobile with Android, with YouTube. And we just think the Street’s going to be looking for firming and improvement in pricing of keywords on smartphones and tablets,” explained DiClemente.
Moreover, DiClemente emphasized that Google Inc (NASDAQ:GOOG)’s advertising technology is the main propeller of the company’s stable financial performance. This is one of the reasons behind continued investor confidence in the search engine giant.
DiClemente further emphasized, “Trees don’t grow to the sky, but this company is coming close in terms of the steadiness of the topline.”
Meanwhile, analysts at Goldman Sachs Group Inc (NYSE:GS) projected Google Inc (NASDAQ:GOOG) will post $14.35 billion consolidated revenue and $10.36 earnings per share compared with the consensus estimate of $14.45 billion revenue and $10.79 earnings per share for the second quarter.