Cantor Fitzgerald analysts Youssef Squali, Naved Khan and Kip Paulson rate Google Inc. (NASDAQ:GOOG) as a Buy, as the tech giant is set to report solid 4Q:13 results.

We expect Google inc (NASDAQ:GOOG) to report solid 4Q:13 results on 1/30, driven by continued strength in Search and Display, particularly in the U.S. Additionally, we think continued tailwind from Enhanced Campaigns and Product Listing Ads (PLAs) should help boost the quarter’s results. We maintain a BUY rating and $1,175 PT.

Google’s estimates vs. consensus

Our 4Q:13 consolidated net revenue and EBITDA estimates are $13,336.6M (+17.6% Y/Y) and $6,180.8M (46.3% margin) vs. the Street’s average (FactSet) of $13,509.0M and $6,096.7M. Our EPS estimate is $12.66 vs. consensus’ $12.25. We note, however, that the range of estimates on each measure is relatively broad.

Intra-quarter search checks bode well

Google inc (NASDAQ:GOOG) increased its share of U.S. explicit core searches to 67.3% in December vs. 4Q average at 67.0% and YTD average of 66.9%, according to comScore’s latest data. IgnitionOne‘s 4Q:2013 Digital Marketing Report reported that U.S. search advertising increased 12% Y/Y in 4Q:13, driven by a particularly impressive December (+27% Y/Y). Mobile was a key driver with smartphone search ad spend increasing 253% Y/Y (37% of mobile spend) and tablet spend 82% Y/Y (63% of mobile spend), while PLA spend grew a whopping 618% Y/Y among the IgnitionOne customer set. We estimate paid clicks growth at +26.2% Y/Y and CPCs at -6.9% Y/Y.

Display and Mobile should continue to drive growth

We conservatively estimate that gross Display revenues increased ~20% Y/Y to ~$2.0B in 4Q:13, representing roughly 13% of Google inc (NASDAQ:GOOG)’s core gross revenue. Google’s AdSense, DoubleClick, and YouTube (ads grew 75+% Y/Y last quarter) likely continued to take share in the quarter, in our view.

F/X a tailwind in the quarter

We believe that the 1.85% Q/Q appreciation in the currency basket vs. USD should result in a revenue gain of $135M in 4Q and a positive impact of ~$0.16 on EPS. That said, Google inc (NASDAQ:GOOG)’s hedging program may offset some/all of this impact.

Valuation and risks for Google

Google inc (NASDAQ:GOOG) trades at 12.6x EV/EBITDA and 22.7x P/E on our FY:14 estimates, a level we still find compelling for a company that dominates its primary segment (Search) and one we expect to grow EBITDA at ~15-20% CAGR over the next three years. Our $1,175 price target is based on a 5-year DCF. Risks include uncertainty around Motorola; patent litigation; regulatory developments; apps adoption, especially on mobile; and ownership structure.