Google Inc (GOOG) Will Go Even Higher

Internet Advertising

The real upside to Google can come from an increase in Internet Advertisement. According to estimates, the online advertisement business is still only approximately 20% of total advertisement spending. This should change with the growth in handheld devices and the reduced advertisement focus of businesses on television. YouTube, for example, is becoming a global phenomenon in terms of content streaming and has the potential to pick up slack from television advertisement. This is what makes Google such an attractive investment, the fact that it still has so much growth potential.

Bottom-line

Google is the most diverse global technology company today. It competes with Apple and Microsoft in the OS landscape, meanwhile challenging Facebook on the social front. Meanwhile its dominance in the search arena goes unchallenged. We are on the brink of a major shift in online advertisement and Google can be a primary beneficiary from this changing trend. I believe Google is still pretty cheap at a P/e of 14.7x and PEG of 1.2x. If we value the company with a P/E of 15x and consensus EPS estimates, we derive the following possible target prices.

The article This Giant Will Go Even Higher originally appeared on Fool.com and is written by Mohsin Saeed.

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