Google FUDooogle
“Google is still well below where dilleet went gaga over google”
"Google = P/E of about 70"
dilleet “went gaga over Google” when it IPOed at $85, then engaged with several of us who played devil’s advocate and raised questions concerning its valuation when it was trading in the $100-$125 range. Although the questions were perfectly reasonable, there’s no denying he was right. In retrospect, with Google set to earn in the neighborhood of $7/shr this year, that was quite a bargain. JMHO, but wouldn't it be more appropriate to compliment him rather than trying to talk down his backing of GOOG? Far from being “well below”, it’s up 400% in scarcely a year and a half since he began advocating it as a “buy it and put it away for the grandkids” story.
As for the “P/E of about 70,” that’s not quite right. Even trying to make it look “expensive,” using the trailing 12 mo (TTM) eps of $6.30, it’s trading at 62x. (In another few weeks, once the current quarter is reported, those TTM numbers will move ahead to roughly $7.30 and 53x). On current and forward FY eps though, GOOG is trading at multiples of 41x and 31x. Perhaps a tad rich, but then again, it was trading at more than 100x a year ago at a level from which it’s up more than 200%.
But even those numbers are at least more than a little deceiving. Google could have reported eps of as much as 50% higher had it not wanted to spend so freely on CapEx and non-revenue generating new projects. It can expand margins almost any day it wants to. In effect, the reported earnings are artificially depressed and deliberately understated relative to free cash flow.
News 
Market Data 
Discover 
