Despite the fourth-quarter miss, the company [GOOG] still posted a 17% climb in profit and generated more than $1 billion in free cash flow. The company's search engine also continues to command an enviable lead over its rivals, capturing 60% of the market share.
"We believe GOOG has several years of exceptional growth ahead," wrote American Technology Research analyst Rob Sanderson in a recent research note. "Controversy has shaken marginal investors and a few sell-side bulls. We think this is creating a great buying opportunity and we encourage accumulation of the stock."
Citigroup analyst Mark Mahaney notes that over the last two years, Google's forward price-to-earnings ratio has ranged between 25 and 35. At $500, Google's P/E ratio of 25 would suggest a bottom is at hand.
As for any potential merger between Yahoo!(YHOO - Cramer's Take - Stockpickr) and Microsoft(MSFT - Cramer's Take - Stockpickr), Mahaney expects Google to remain on top.
Google is widely expected to maintain its lead over the two companies in search, even if they combine their resources. Lindsay says Google may even benefit from the merger by stealing away some of its rivals' customers as well as its workers.
"We think it's probably going to be a net positive for Google," he says.
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