Tags: Google | stock | Squali | Dix

Analysts: Google Shares Can Keep Rising

By Dan Weil   |   Thursday, 09 May 2013 07:48 AM

Google stock has hit a record high, and many analysts see room for further gains.

"Over the last two or three years, [Google] hasn't had that much of a run and has underperformed vis-a-vis the rest of the Internet group," Cantor Fitzgerald analyst Youssef Squali told CNBC. "That said, we still think it has another $50 or $100 upside short term."

The stock closed at $857.23 Tuesday, down $4.32, after touching an all-time peak of $863.87 earlier in the day. It has risen 41 percent over the past year.

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Google's profit margins, which have suffered from the poor performance of Motorola Mobility, its mobile communications unit, may start to increase, Squali said, noting that the company is growing faster and has better profit margins than Apple.

"Valuation is still very, very attractive, and it's trading at 9 times cash flow — almost cheaper than the S&P 500," Squali said. "We like it quite a bit here."

Wedbush Securities analyst James Dix is impressed with Google's ad-based business model. "They're investing heavily in some new businesses, … which gives them the potential down the road to look at new business models," he told CNBC.

"They're innovative in the ad-words platform, which is how they monetize search, so that's really what's going to drive the stock."

Morningstar analyst Rick Summer is bullish too.

"With a dominant Internet search product as its foundation, Google has built an impressive portfolio that individuals use frequently, beyond search," he wrote on Morningstar.com.

"These new products allow advertisers to reach out to potential customers multiple times, in multiple ways. Google's importance to the future of advertising has only just begun."

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Google stock has hit a record high, and many analysts see room for further gains.

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