From TechTicker:
Google shares are getting hit early Tuesday after comScore's report on a startlingly big decline in paid click growth. Google's January paid click growth was flat on a year-over-year basis, down 7% from December and down 12% from the fourth quarter. UBS cut its earnings estimate and price target in response.
The comScore data provide further evidence that Google is not recession proof and it looks like somebody got wind of this report as GOOG shares were notably weak Monday in an up tape. This decline probably represents an opportunity for believers in Google's long-term story but the short-term pain isn't likely over yet.
Google (GOOG) shares are down sharply this morning after new data from comScore shows what appears to be a material weakening in the company’s advertising business.
Many analysts have commented on the data this morning, and most seem at least slightly concerned. Google’s paid-search data shows sponsored clicks were down 7% in January over December and flat year over year. UBS analyst Benjamin Schachter says the data leaves him “incrementally more cautious” on his outlook for the company and the stock: he trimmed his revenue estimates for Google and cut his price target to $590 from $650.
Scahchter now sees 2008 EPS of $20, down from $20.37; ‘09 goes to $24.10, from $24.58.
Some more comments from the Street on the new data:
Jim Friedland, Cowen: “This data point indicates that a slowing economy may be having an impact on Google’s growth…we are maintaining our Outperfrom rating, but note that our estimates may be too high and expect the stock to remain under pressure in the near term.”
Rob Sanderson, American Technology Research: “We do not think that underlying fundamentals have changed that much, if at all…While we do not see a specific catalyst on the near-term horizon, we believe that current levels offer a very attractive entry point.”
Justin Post, Merrill Lynch: “Data adds risk to Google’s 2008 growth outlook highlighting that a decline in consumer spending could be causing reduced commercial search activity, and will likely drive some weakness in Google stock.”
Youssef Squali, Jefferies: “Third party data suggests continued deceleration in paid click growth on Google properties, implying that Street estimates may need to come down if the January trend persists.”
Google today is down $30.41, or 6.3%, at $456.03, after dropping $22.36 yesterday.
Google Stock was/is a bloated pig anyway, but it looks like the pie-in-the-sky party may be over for now.
Google shares are getting hit early Tuesday after comScore's report on a startlingly big decline in paid click growth. Google's January paid click growth was flat on a year-over-year basis, down 7% from December and down 12% from the fourth quarter. UBS cut its earnings estimate and price target in response.
The comScore data provide further evidence that Google is not recession proof and it looks like somebody got wind of this report as GOOG shares were notably weak Monday in an up tape. This decline probably represents an opportunity for believers in Google's long-term story but the short-term pain isn't likely over yet.
Google (GOOG) shares are down sharply this morning after new data from comScore shows what appears to be a material weakening in the company’s advertising business.
Many analysts have commented on the data this morning, and most seem at least slightly concerned. Google’s paid-search data shows sponsored clicks were down 7% in January over December and flat year over year. UBS analyst Benjamin Schachter says the data leaves him “incrementally more cautious” on his outlook for the company and the stock: he trimmed his revenue estimates for Google and cut his price target to $590 from $650.
Scahchter now sees 2008 EPS of $20, down from $20.37; ‘09 goes to $24.10, from $24.58.
Some more comments from the Street on the new data:
Jim Friedland, Cowen: “This data point indicates that a slowing economy may be having an impact on Google’s growth…we are maintaining our Outperfrom rating, but note that our estimates may be too high and expect the stock to remain under pressure in the near term.”
Rob Sanderson, American Technology Research: “We do not think that underlying fundamentals have changed that much, if at all…While we do not see a specific catalyst on the near-term horizon, we believe that current levels offer a very attractive entry point.”
Justin Post, Merrill Lynch: “Data adds risk to Google’s 2008 growth outlook highlighting that a decline in consumer spending could be causing reduced commercial search activity, and will likely drive some weakness in Google stock.”
Youssef Squali, Jefferies: “Third party data suggests continued deceleration in paid click growth on Google properties, implying that Street estimates may need to come down if the January trend persists.”
Google today is down $30.41, or 6.3%, at $456.03, after dropping $22.36 yesterday.
Google Stock was/is a bloated pig anyway, but it looks like the pie-in-the-sky party may be over for now.
Last edited:
