) has been on quite a run as of late, gaining over 20 percent
during the last three months, which looks even more impressive
when compared to the 20 percent decline its chief rival Apple
) demonstrated over the same period.
A number of analysts increased price targets on the company
this morning, some issuing targets as high as $1,000 on the tech
We've seen this before (think Topeka's former $1,111 price
target on Apple, right before its collapse), but is it really
that far fetched to think the stock will gain 20 percent over the
next year? Here's the case of why it probably won't:
First, the ratings.
Sanford Bernstein Sanford Bernstein was the first to release
its price target increase, from $820 to $1,000. Citing mass
adoption of smart phones, tablets and the mobile web as a strong
opportunity for Google, the report focused on the fact that
search was up over 20 percent for the fourth-quarter despite
declining PC searches.
This would mean either YouTube or mobile search skyrocketed to
compensate, either of which is good news for the company. Sanford
Bernstein is currently Outperform rated on shares of Google.
CLSA The second $1,000 price target came from CLSA, and
increase from its previous target of $900. The reiteration of
CLSA's Buy rating focused specifically on the new ad management
system the company had released and how it will make utilizing
Google adwords much easier for small businesses and new
The report stated that it expected the new system to provide
an improved CPC, further adding to revenue growth.
Deutsche Bank As a cherry on top, Deutsche Bank, the most well
known of the three analysts, also increased its price target.
Upping the ante from its former target of $850, the company
didn't go all the way to the $1,000 mark, but instead opted for a
more "conservative" $935 price target.
The report also cited an improved climate in mobile
advertising for the company, and how it is no longer weighing on
the company's valuation like it did last year.
While the company's core business is indeed improving, one of
the major knocks on Google is that "it's only a search
What's exciting about the last few months for Google is that
the company has shown that it is aggressively pursuing new
On the list of projects that jump off the page are Google
Fiber- the company's experiment with broadband internet which
offers a connection 100 times faster than current broadband
providers, its self driving car, retail stores, a new line of
touchscreen laptops to compete with Microsoft's (NASDAQ:
) Windows 8 and the new Google Glass project which just entered
its next phase yesterday.
Wow, let's take a breath here.
Each one of those projects could easily become their own
multi-billion dollar revenue stream, and each one is under the
rapid development of Google's touted brilliant team.
The self driving car, once tested fully, could quickly become
a software package marketed to luxury car makers or even to
high-end American brands like Ford's (NYSE:
) Lincoln and General Motors' (NYSE:
Think a $20,000 package that allows your new Cadillac ATS to
drive itself. Let the auto companies handle the hardware, Google
can sit back and reap the high margins of the software behind the
vehicle. This scenario obviously hinges on the courts ruling
whether Google is liable for crashes that happen with cars using
The Google Glass project has already received a ton of hype,
and is right on the coming trend of "wearable" computing.
Essentially a tablet that you wear, Glass could prove to be a
huge disruptor of tablets.
Further on the hardware side are Google's new Chrome
touchscreen laptops. Perfectly positioned to do what Windows 8
dreamed of, perhaps the devices can can be what consumers wanted
a next generation PC.
Deliver all that in the Google retail stores which are coming
soon, and the company has a nice lineup of products with a direct
The Google Fiber project barely needs a mention- its already
the dream of tech enthusiasts nationwide to have internet that is
up to par with the rest of the world, and Fiber delivers that at
a better price than the significantly lacking services of
providers such as Comcast (NASDAQ:
A disruption in that space would not only be incredibly
welcome to consumers who are tired of overpaying for terrible
customer service, but it would bring the U.S. up to par with
other leading nations when it comes to technological
infrastructure, and surely provide a massive non-search revenue
stream to the company.
So is a $1,000 price target on this company really that far
Many are saying "we've seen this before" with Apple, but keep
in mind, Apple is a consumer electronics company. Google is a
technology company, in every sense of the word.
The biggest knock against the search giant is that it's a "one
trick pony", but recent earnings releases have only shown that
its one trick just keeps getting better and better, while a
series of new projects each could hold a multi-billion dollar
revenue stream for the company.
When cast in that light, a 20 percent upside seems fairly
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Profit with More New & Research
. Gain access to a streaming platform with all the information
you need to invest better today.
Click here to start your 14 Day Trial of Benzinga