Google Misses Quarterly Earnings Estimate
Feb 1st, 2008 by Shaun Carter
For the first time in Google’s three and a half year history, quarterly earnings missed analysts estimates. I saw the potential for this scenario during a post I made in January because of the program changes Google made that I feel would adversely affect profitability.
I wouldn’t be surprised if Google shares drop under $500 in trading Friday. The reputation of invincibility that Google has maintained on The Street has been dinged and I’m sure the shorts will be all over the stock when trading opens in the morning.
The price action to occur today could provide a very attractive entry point for long term investors. Despite the slowing revenue growth… the company is still cheap and trades at a P/E of only 44 and is the leading search company on the Internet by a long shot. They still generate huge sums of money each quarter and will continue expanding their revenue streams.
It’s also possible the company could contemplate a stock split to generate more retail interest in the stock, and prop up the price, among investors that balk at a triple digit share price… even though experienced investors know that price has nothing to do with value.
Technorati Tags: google, search engine, stock market, shaun carter, investing, search, earnings, quarter
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