Thursday, July 17, 2008

Google Misses By 9 Cents... Big Deal

Today Google reported numbers that most companies would kill for. Revenues grew 39% year over year, but this still wasn't enough to keep the bears at bay. Analysts were looking for Earnings Per Share of $4.72 Google came in at $4.63. Revenues for Google's 2nd Quarter 2008 came in at 5.37 Billion, analysts were looking for 5.4 Billion. Of course, the knee jerk reaction to this created a sell off in after hours where Google (goog) fell about 7%.

Giving Google's already decent P/E ratio this earnings report has created a fabulous buying opportunity. There P/E ratio is currently 37, but after today's earnings report it will be closer to 32 based on a price of $490 per share! To put that into perspective Yahoo is trading at a 30 P/E ratio and Apple is trading at a 35 P/E ratio. Not to mention Google is sitting on 12.7 Billion in cash! That number alone is more than a lot of companies are even worth and Google can afford to just watch it collect interest.

Do your children a favor and go out and buy some Google stock while it is on sale. That is unless you think that Google, the Internet, Advertising and Youtube are just going to disappear. Just check out these slides below from the 2nd Quarter Earnings Report...

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