Google Inc (GOOG) Reports Decent Results With Positive Key Metrics

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Google Inc (NASDAQ:GOOG) shares topped $1,000 for the first time last week, and today they’re still hanging on right above that level. Analysts are calling the company’s latest results everything from “good enough” to “strong.”

Google Inc (GOOG) Reports Decent Results With Positive Key Metrics

Google reports higher volumes

Stifel analysts Jordan E. Rohan, Michael B. Purcell and Alex Chavdaroff have a Hold rating on Google and say the search giant’s latest results were just “good enough” because of how negative sentiment was heading into the quarter. They note that unlike many other companies, Google didn’t cite a slow macro-environment in the U.S. Google also said it benefited from strong growth in developing markets as well as download revenue from Android devices.

Google Inc (NASDAQ:GOOG)’s volume rose 26% during the most recently completed quarter, compared to 23% in the previous quarter. Cost per click fell 8%, which was a bit worse than the 6% decline from the previous quarter. Stifel analysts believe cost per click and click volume depend on each other and that revenue and gross profit growth are the most important indicators of Google’s health. Overall, they said Google showed “enough upside” to drive its shares higher in the near term.

Rapid growth continues to Google

In spite of the lower cost per click, Google did see its ad revenue grow 19%. Its EBIT margin climbed 3.7% to 23.1%, while its earnings per share increased 34% to $8.75 per share. Indigo analyst N. Landell-Mills notes that Google’s revenue growth is still strong although it’s slowing down gradually. The analyst also said narrowed losses at Motorola helped a bit as well.

According to the Indigo analyst, Google Inc (NASDAQ:GOOG) “is executing extremely well.” The analyst said the company is managing to shift over to mobile while improving its core products. The firm raised its fundamental valuation for the company to $1,097 per share but see limited upside because of high valuation multiples and possibly higher tax rates.

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