About a month ago we made our case for Google and how we think it will be a big winner in 2007. Here are some interesting valuations on what Google's stock price could be trading at when compared to it's competitors. Today Google closed at $498.60.
Google's stock price at the same P/E ratio as...
$625 - Yahoo (YHOO)
$1315 - Amazon (AMZN)
$250 - Microsoft (MSFT)
$416 - Ebay (EBAY)
$1138 - Baidu (BIDU)
Using the P/E ratio for valuation doesn't work well because it doesn't account for expected earnings growth. So lets look at some PEG ratios. We are using a PEG of 1.3 for Google that we calculated from a growth rate of 35%. Yahoo Finance places the PEG for Google at 1.03, which gives Google a growth rate of 42.5%. Read more about the PEG ratio.
Google's stock price at the same PEG ratio as...
$977 - Yahoo.
$1125 - Amazon.
$578 - Microsoft.
$473 - EBAY.
$578 - Baidu.
We are showing you these valuations for fun and in no way are stating that Google will trade at these levels anytime soon. But we will say that our "low end" price target on Google for the end of 2007 is $550.
Comments (2)
Is it a pure coincidence that GOOGLE hit $600. Hats off Guys!
Posted by gbhaskarla | October 8, 2007 8:49 PM
At present the google company is way ahead in internet business as compared to other rivals like yahoo and msn. According to me just predicting the google stock value based on PE will not give exact next year valuation but looking at the present scenario where the google is heading, i have no doubt that in coming year google will provide good returns to their stock investor and will touch $1000 by the end of year 2008.
Mike
Posted by Mike | December 31, 2007 11:34 PM