Google Inc (GOOG): Likely to Continue Outperforming the Market

Yahoo! Inc. (NASDAQ:YHOO) is another online advertising competitor for Google.  However, Yahoo is a much smaller player than Google with one-year revenue of $4.9 billion as compared to Google’s $50 billion. Although Yahoo! Inc. (NASDAQ:YHOO) had made a small dent in market share, it is doubtful that the company will pose much of a threat to Google’s stronghold.

Another competitor, AOL, Inc. (NYSE:AOL) achieved one-year revenue of $2.19 billion. AOL, Inc. (NYSE:AOL) offers a variety of online content and advertising which includes the well-known mapping service, MapQuest.  This is another company that owns a small piece of the online advertising pie, but it shouldn’t be much of a threat for Google Inc (NASDAQ:GOOG).

Google achieved an annual earnings growth of 20.6% for the past five years. Looking forward, the company is expected to grow earnings annually at 14.6% for the next five years. This is significantly higher than the expected annual earnings growth of the S&P 500 of about 9% over the next five years. If Google is able to meet or exceed its earnings expectations for the majority of its quarters, the stock should continue to significantly outperform the market.  Given Google Inc (NASDAQ:GOOG)’s expected growth, I think that the current stock price of $790 will grow to be worth $1500 in about five years.

The article Google: Likely to Continue Outperforming the Market originally appeared on Fool.com and is written by David Zanoni.

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