| Stock (Symbol) | Stock Price | |
Google (GOOGL) |
$554 |
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| Data is as of | Expected to Report | Sector |
October 28, 2014 |
Jan 28 – Feb 2 |
Technology |
| Sharek’s Take | ||
 There’s a lot of little things in Google’s last earnings report that aren’t good. First of all the company missed estimates by a bit and annual estimates came down Looking at the numbers, paid clicks rose 17% last qtr, down from an average of 25% the prior 6 qtrs. This was an alarming number, but Google said it made changes to reduce lower quality clicks, so that affected this figure. Expenses rose from 34% of sales in 2013 Q3 to 37% as the company keeps spending to stay ahead. I thought dumping Motorola would help profits, but so far I’m not seeing it. Profit growth is expected to be in the high teens next year, so I’m taking my Fair Value P/E down from 22 to 19, and that bring’s GOOGL’s upside to 2015’s Fair Value to only 5%. I might Sell this stock if it goes much higher. |
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| One-Year Chart | ||
 GOOGL’s P/E of 18 is ironic because 18% is what analysts expect the company to grow profits per-year in both 2015 & 2016. Profits also grew 18% last quarter. Note in the chart GOOGL dropped after reporting, I think this stock will have trouble attracting investors. |
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| Earnings Table | ||
 Google’s sales growth was 11% LastQtr, up from 10% the prior two quarters. The papers say the company grew sales 20% last quarter, they aren’t factoring in Motorola.GOOG missed earnings estimates by 19 cents. It also missed by 18 cents 2QtrsAgo. Annual Profit Estimates have come down for two consecutive quarters. Quarterly estimates don’t look great. Good not great. |
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| Fair Value | ||
 GOOGL used to get a P/E in the high teens, and I think its P/E might come down from the current 21 to 19. Upside is fair. Not great. |
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| Ten-Year Chart | ||
 This company used to grow profits at a faster clip, Now it seems to be a teens-grower. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
25 of 25 |
I re-purchased Google last year anticipating the company would be growing profits faster than 20% by now. It’s not, and might not for the next year. I’m taking GOOGL down in my Power Rankings as this stock isn’t a fast grower and has only 5% upside to next year’s Fair Value. |
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Aggressive Growth Portfolio
N/A |
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