Barron’s Rips Google a New One

As had been widely rumored, this weekend’s Barron’s has a cover piece going after Google:

To get a sense of what might happen to the stock, we gave one uber-bull’s 2006 revenue estimate for Google a 20% haircut, trimmed his projected expenses by 5% (but no further, because bulls greatly underestimate Google’s costs), deducted stock-based compensation and, generously, gave the company credit for the considerable interest income on its cash. The result: Earnings would be 30% lower than the bull’s projection, at $6.28 a share. If the stock were to maintain its current multiple of 41 on those lowered earnings, it would be worth $257. It’s more likely the multiple would shrink to as low as 30, in line with the slower growth. That would make the stock worth $188, versus its recent $360.

Related posts:

  1. Barron’s on Google and Click Truth
  2. Google, the DoJ, and Why Orwell Was Early
  3. Shorting Google
  4. Google and the October 21st Effect
  5. Still So Sanguine About Google?

Comments

  1. Fartikus says:

    furthermore i say google has become the new stock market “general”. its drop will take most of the nasdaq and s&p with it. people will wonder why the s&p is dropping like a rock even though earnings are flying and companies are doing well….google became a proxy for the wishfulness of the entire investing public. i don’t think this is far fetched, i watched yahoo carry the market quite a bit back in the day.