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Market Scan
Google Still Seen 'Leagues Ahead' Of Competitors
Maya Roney, 02.14.06, 8:50 AM ET

Caris & Company equity research analyst Mark Stahlman maintained a "buy" rating on Google, citing an "attractive" valuation and continuing market share gains among his reasons to own the stock.

"This is a real company with real earnings and tremendous real growth, not some Bubble-era dot.com wannabe promising stellar numbers in the December quarter of 2012," wrote the analyst in a research note Monday.

In the report, Stahlman argues against the proliferation of a bearish outlook on Google (nasdaq: GOOG - news - people ), and what he calls "the nine horsemen of the Google apocalypse." Recently published articles have suggested that the stock is overvalued and the company is facing strong competition and slowing query volume growth, among other critical points.

However, by Stahlman's estimates, Google's valuation is conservative relative to that of both eBay (nasdaq: EBAY - news - people ) and Yahoo! (nasdaq: YHOO - news - people ), which he says trade much closer to a PEG multiple of 1.0 than Google on a price-to-earnings, price-to-free cash flow and enterprise value-to-EBITDA basis.

In addition, Google still has the best current fundamentals in the Internet sector, said the analyst.

"We have great faith that the invisible hand will make Google an even better company over time," the analyst said. "In terms of the current competitive landscape, it seems very obvious to us that Google is leagues ahead of everyone else."


http://www.forbes.com/2006/02/14/google-earnings-0214markets02.html?partner=yahootix