4 Reasons Why Google Inc (GOOGL) Is Relatively Inexpensive: Mark Mahaney

Mark Mahaney, of RBC Capital Markets endorsed Google Inc (NASDAQ:GOOGL) on atleast four counts, identifying the inexpensive nature of the stock considering the company’s high growth model. On CNBC, Mahaney mentioned that Google Inc (NASDAQ:GOOGL)’s earnings multiple of 29.9 was too low for what the stock has to offer.

Google GOOG

First and foremost, Mahaney pointed out the broad play on internet business growth that the ownership of Google Inc (NASDAQ:GOOGL)’s stock buys an investor. The diversified businesses of Google facilitite its investor to tap in on many facets of the internet industry simultaneously.

Secondly, if there is anything that encompasses the word monopoly to its very core, in the internet space, its Google Inc (NASDAQ:GOOGL)’s search engine. Mahaney also highlighted the high margins that are characteristic of this facet.

In the third place comes the medium term growth drivers that Google owns, in the form of YouTube and Google Play etc., according to Mahaney.

Last but not least it’s the underdogs or the future high growth stories in the internet space that Google Inc (NASDAQ:GOOGL) funds. Google Venture and Google Capital are two financing arms that the company uses to place five to ten year bets in the technology sector.

With Forest Gump styled stories like Alibaba Group Holding Ltd (NYSE:BABA) popping up every now and then, it can be very financially rewarding for the investors to have this kind of play early on, when these companies are just starting.

Moreover, since e-commerce is a hot topic these days, Mahaney believed that it doesn’t pose any threat to Google Inc (NASDAQ:GOOGL) especially in terms of its search engine supremacy.

“[…] There has been a couple of perceived challenges to google as a search engine, one of which is the rise of Amazon as a competing retail search platform, but if anybody wants to come in and take share in any retail markets worldwide they are almost certainly going to use Google, at least outside of China […],” said Mahaney.


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