GOOG: Be More Impressed with Cap than Share Price

Google_sm_2

Yesterday, Piper Jaffray raised its price target on shares of Google yesterday to $600 from $445 — that’s a 35 percent increase.

Reuters reported: 

"A Piper Internet analyst, Safa Rashtchy, projected that Google would continue to generate strong, double-digit sales and earnings growth through 2007 and gain market share as well . . . While the stock may have its ups and downs throughout the year, we
believe it will reach $600 by the end of 2006 and we prefer to have one
12-month price target rather than raise it every quarter," Piper’s Analyst Mr. Rashtchy wrote in a note to clients."

Don’t be impressed by the big share price numbers; If GOOG split their stock 10 for 1, would a $60 target for a $43 stock sound that mad? Probably not.

If you want to be impressed, look at their market capitalization — its now over $128B! They are within a stone’s throw of Intel’s $154B cap.

Compare GOOG to other tech firms — they have become bigger than the market cap of Cisco ($107B), Apple ($63B) eBay ($62B), and Yahoo ($58B).  Amazon is tiny by comparison — under $20B.>

Now that’s impressive!

 

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UPDATE  January, 5, 2005 5:30 am

Wired article on the biggest threast to Google’s business model: Click Fraud 

"Pay-per-click advertising is big, big, big business. So are bogus hits on Internet ads. It’s search giants against scam artists in an arms race that could crash the entire online economy."

How Click Fraud Could Swallow the Internet
http://www.wired.com/wired/archive/14.01/fraud_pr.html

UPDATE 2 January, 6, 2005 3:53 pm

 Caris & Company’s Mark Stahlman is now saying that Google (GOOG) could trade at $2000/share.

Doug Kass notes "It feels like deja vu all over again . . ."

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Source:
Forecast for Google Put at $600 a Share
REUTERS
NYT, January 4, 2006
http://www.nytimes.com/2006/01/04/business/04google.html

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