Google Misses the Mark but Still Favorable in the Eyes of Analysts
Although the latest financial results from Google (NASDAQ:GOOG) have some investors running, analysts still continue to like the Internet giant. Google earned $2.7 billion from October to December, or $8.22 per share, compared to analyst expectations of $10.51 per share. After new broke that Google had missed its fourth quarter financial expectations, the stock fell 8% in early trading today. Despite the numbers, many analysts are sticking to their favorable ratings.
The Hollywood Reporter cited Credit Suisse analyst Spencer Wang who justified his “outperform” rating and $700 target price by saying, “Longer-term growth drivers remain intact, including display advertising, mobile, and, potentially, Google+.” Wang called the most recent results a “noisy quarter.”
RBC Capital Market analyst Ross Sandler echoed Wang’s sentiments and encouraged investors to take advantage of the stock sell-off. He also maintained his “outperform” rating and even higher target price of $800 according to THR.
THR quoted Stifel, Nicolaus analyst Jordan Rohan who said that Google missed the mark because, “Google does not attempt to keep estimates under control with any financial guidance.” He went on to say, “The management team could do a lot to reduce post-earnings volatility by making sure investors were on the right page when it comes to some of these below the line items.” Revenue was up 25 percent from 2010 to nearly $10.6 billion. Less ad commissions, Google’s revenue totaled $8.1 billion, about $300 million below estimates.