Google Inc (GOOG): Why You Can Still Be Bullish

Page 2 of 2

Yahoo! Inc. (NASDAQ:YHOO)
is current in the third spot in this category and has recently been surpassed by Google Inc (NASDAQ:GOOG) in the Display segment. The company has recently reported its quarterly results and beat the Street’s estimates. The primary reason behind this beat was the improved performance of Yahoo! Inc. (NASDAQ:YHOO) subsidiaries rather than the core businesses.

CEO Marissa Mayer has undertaken a major overhaul of the entire company and Yahoo! is definitely headed in the right direction. At its current valuations, Yahoo! Inc. (NASDAQ:YHOO) is another ‘buy’ from the internet advertisement industry.

Bottom line

The earnings from the first quarter make the case for buying Google Inc (NASDAQ:GOOG) even stronger. The company is currently trading at a P/E of 15x and 10% discount to mean sell side target price. Using a 16x earnings multiple, we can calculate a $848 target price based on mean EPS estimates. This shows a 6% premium to current valuations and makes Google a buy.

The article This Giant Still Has Some Upside Potential Left originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2