Could Google Inc (GOOG) Reach $1,000?

In the near term, you cannot expect huge growth from the ad side of Google Inc (NASDAQ:GOOG)’s business. The area that you should look at is the project side. Things like project Loon, which is a balloon-powered Internet service for areas outside of a normal Internet connection’s reach, could be big game-changers over time. This is very long-term, of course, and would not impact the share price in the nearest future.

Bottom line

Now, back to the point of this article. Could Google reach $1,000 per share, given that its revenue growth is stuck a little bit? My answer to this is absolutely.

Simple math shows us that if Google Inc (NASDAQ:GOOG) reaches $1,000, it would trade at a 19.2 forward price-to-earnings ratio. This is not a very high number given the company’s position in the market. Yahoo! Inc. (NASDAQ:YHOO), for example, is trading at a 18.91 forward price-to-earnings ratio despite the fact that it issued soft guidance on the second half of the year. It looks like investors believe that the impact from mobile advertising for both Google and Yahoo! Inc. (NASDAQ:YHOO) is temporary.

Facebook Inc (NASDAQ:FB), which is trading at a 33.4 forward price-to-earnings ratio, has yet to show the world a clear monetization strategy. The company’s large user base allows it to trade at relatively high multiples, but the hope for better results diminish with each month that it doesn’t deliver on its promises.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG).

The article Could Google Reach $1,000? originally appeared on Fool.com.

Vladimir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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