Compared to big tech names like Apple Inc. (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB), Google Inc (NASDAQ:GOOGL) has lagged behind in the race to summit. But some analysts feel that the best of Google Inc (NASDAQ:GOOGL) is yet to come. One such analyst is David Seaburg of Cowen and Company. Seaburg talked on CNBC about why he thinks that Google Inc (NASDAQ:GOOGL) stock is gearing up for a massive upwards movement.
“Trading at 550 bucks a share, I think it is going to 680 bucks a share, here’s why,” Seaburg said.
Seaburg pointed out that P/E ratio for Google Inc (NASDAQ:GOOGL) and S&P 500 stocks are very close to each other. He feels that they should not be trading that close to each other, because historical data points out that Google Inc (NASDAQ:GOOGL) should be trading two times higher than S&P 500.
He feels that Google Inc (NASDAQ:GOOGL) is not getting credit for a lot of their business lines, which might have pushed the stock to a much higher value. He pointed out that there was some spending questions about Google Inc (NASDAQ:GOOGL) and there was some headwinds, but he thinks that situation is a little different now.
“[…] Google’s ecosystem. Google’s lot of their application, they don’t get the bragging rights like a Facebook might for the downloaded apps. Because, everything is preinstalled for Google. That’s really an important point to make. A lot of people are really discussing this, because they have all their apps preinstalled in smartphones, they don’t have the ability to have the bragging rights to say, we got this many people downloading our apps. But […] Google has got five in the top 10 best performing apps. So I look at that an say, they are not getting credit from bragging rights perspective, market is not necessarily aware of that. They are definitely going to monetize this going forward, I think its something people should pay attention to,” Seaburg said.
Seaburg added that the free cash flow for Google Inc (NASDAQ:GOOGL) could ramp up significantly in 2015 and 2016, which could increase the possibility of Google Inc (NASDAQ:GOOGL) returning money to investors and shareholders, which in turn might impact the stock positively.
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