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What is Google worth?

February 07, 2006 | About:

Google has dropped more than $100 from its peak. At this point its market cap is still more $100 billion. What do you think of the fair value of Google?

Rating: 2.0/5 (2 votes)

Comments

vooch
Vooch - 8 years ago
> What do you think of the fair value of Google?

I think it's worth $205 today. Looks like I'll be waiting a loooooong time before I get a chance to buy this stock.

gurufocus
Gurufocus premium member - 8 years ago
How did you come up with this number? $205 still sounds expensive.

Maybe you don't need to wait that loooooooong.
vooch
Vooch - 8 years ago
I just used some quick math...

$5.125 eps * 40 pe = $205

I'm not even sure I'd pay that, but at least, it would start getting back to reasonableness.

I love it when these fools shout GOOG $2,000 - it lets you know who's the patsy.

myguru
Myguru - 8 years ago
I think GOOG is still worth $400, but at $400 or current price of $367 doesn't give me enough a margin of safety to invest in it. If it dipped below $300, I might consider.

gurufocus
Gurufocus premium member - 8 years ago
How did you come up with $400?

vooch
Vooch - 8 years ago
GOOG $343.32 now. Down another -0.69% today when 70% of the market was green.

GOOG has been overpriced for a looooooooooong time.... been saying it every since I've been posting at gurufocus.com.

Kinda sucks when Eric Schmidt sold a shitload of stock day(s) before the earnings. They ought to throw his ass in jail for insider trading, imo.

For all the GOOG Lovers out there, just look at what your CEO did:

http://finance.yahoo.com/q/it?s=GOOG

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 4,174 Indirect Automatic Sale at $430.01 - $432.99 per share. $1,801,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 1,492 Indirect Automatic Sale at $426.36 - $427.36 per share. $637,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 1,614 Indirect Automatic Sale at $427.37 - $427.74 per share. $690,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 2,148 Indirect Automatic Sale at $427.75 - $428.08 per share. $919,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 1,925 Indirect Automatic Sale at $428.09 - $428.43 per share. $824,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 1,341 Indirect Automatic Sale at $428.44 - $428.77 per share. $575,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 1,449 Indirect Automatic Sale at $428.79 - $429.19 per share. $622,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 1,241 Indirect Automatic Sale at $429.21 - $429.98 per share. $533,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 215 Indirect Automatic Sale at $426.36 - $427.36 per share. $92,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 235 Indirect Automatic Sale at $427.37 - $427.74 per share. $100,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 306 Indirect Automatic Sale at $427.75 - $428.08 per share. $131,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 276 Indirect Automatic Sale at $428.09 - $428.43 per share. $118,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 196 Indirect Automatic Sale at $428.44 - $428.77 per share. $84,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 210 Indirect Automatic Sale at $428.79 - $429.19 per share. $90,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 181 Indirect Automatic Sale at $429.21 - $429.98 per share. $78,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 5,043 Indirect Automatic Sale at $426.36 - $427.36 per share. $2,153,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 5,460 Indirect Automatic Sale at $427.37 - $427.74 per share. $2,334,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 7,261 Indirect Automatic Sale at $427.75 - $428.08 per share. $3,107,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 6,504 Indirect Automatic Sale at $428.09 - $428.43 per share. $2,785,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 4,536 Indirect Automatic Sale at $428.44 - $428.77 per share. $1,944,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 4,909 Indirect Automatic Sale at $428.79 - $429.19 per share. $2,106,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 4,190 Indirect Automatic Sale at $429.21 - $429.98 per share. $1,800,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 1,250 Indirect Automatic Sale at $430.01 - $432.99 per share. $539,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 153 Indirect Automatic Sale at $430.01 - $432.99 per share. $66,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 5,000 Indirect Disposition (Non Open Market) at $0 per share. N/A

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 12,500 Indirect Acquisition (Non Open Market) at $0 per share. N/A

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 1,778 Indirect Acquisition (Non Open Market) at $0 per share. N/A

30-Jan-06 SCHMIDT, ERIC E.

Chairman 40 Indirect Automatic Sale at $425.84 - $426.3 per share. $17,0002

30-Jan-06 SCHMIDT, ERIC E.

Chairman 6 Indirect Automatic Sale at $425.84 - $426.3 per share. $2,5562

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 138 Indirect Automatic Sale at $425.84 - $426.3 per share. $59,0002

30-Jan-06 SCHMIDT, ERIC E.

Chief Executive Officer 42,215 Indirect Acquisition (Non Open Market) at $0 per share. N/A

26-Jan-06 SCHMIDT, ERIC E.

Chairman 4,344 Indirect Automatic Sale at $436.53 - $439.22 per share. $1,902,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 787 Indirect Automatic Sale at $426.87 - $427.97 per share. $336,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,005 Indirect Automatic Sale at $427.98 - $428.59 per share. $430,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,021 Indirect Automatic Sale at $428.62 - $429.28 per share. $438,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,136 Indirect Automatic Sale at $429.29 - $430.09 per share. $488,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,117 Indirect Automatic Sale at $430.10 - $431.4 per share. $481,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,290 Indirect Automatic Sale at $431.41 - $431.93 per share. $557,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,074 Indirect Automatic Sale at $431.94 - $433.59 per share. $465,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 2,015 Indirect Automatic Sale at $433.63 - $435.3 per share. $875,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,428 Indirect Automatic Sale at $435.34 - $436.47 per share. $622,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 116 Indirect Automatic Sale at $426.87 - $427.97 per share. $50,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 147 Indirect Automatic Sale at $427.98 - $428.59 per share. $63,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 149 Indirect Automatic Sale at $428.62 - $429.28 per share. $64,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 166 Indirect Automatic Sale at $429.29 - $430.09 per share. $71,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 163 Indirect Automatic Sale at $430.10 - $431.4 per share. $70,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 190 Indirect Automatic Sale at $431.41 - $431.93 per share. $82,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 156 Indirect Automatic Sale at $431.94 - $433.59 per share. $68,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 289 Indirect Automatic Sale at $433.63 - $435.3 per share. $126,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 4,801 Indirect Automatic Sale at $435.34 - $436.47 per share. $2,093,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 2,683 Indirect Automatic Sale at $426.87 - $427.97 per share. $1,147,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 3,403 Indirect Automatic Sale at $427.98 - $428.59 per share. $1,457,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 3,467 Indirect Automatic Sale at $428.62 - $429.28 per share. $1,487,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 3,848 Indirect Automatic Sale at $429.29 - $430.09 per share. $1,653,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 3,777 Indirect Automatic Sale at $430.10 - $431.4 per share. $1,627,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 4,367 Indirect Automatic Sale at $431.41 - $431.93 per share. $1,885,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 3,636 Indirect Automatic Sale at $431.94 - $433.59 per share. $1,574,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 6,790 Indirect Automatic Sale at $433.63 - $435.3 per share. $2,950,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 4,801 Indirect Automatic Sale at $435.34 - $436.47 per share. $2,093,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,302 Indirect Automatic Sale at $436.53 - $439.22 per share. $570,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 167 Indirect Automatic Sale at $436.53 - $439.22 per share. $73,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 325 Indirect Automatic Sale at $424.09 - $426.85 per share. $138,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 48 Indirect Automatic Sale at $424.09 - $426.85 per share. $20,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,099 Indirect Automatic Sale at $424.09 - $426.85 per share. $468,0002

26-Jan-06 SCHMIDT, ERIC E.

Chairman 5,000 Indirect Disposition (Non Open Market) at $0 per share. N/A

26-Jan-06 SCHMIDT, ERIC E.

Chairman 12,500 Indirect Acquisition (Non Open Market) at $0 per share. N/A

26-Jan-06 SCHMIDT, ERIC E.

Chairman 1,779 Indirect Acquisition (Non Open Market) at $0 per share. N/A

26-Jan-06 SCHMIDT, ERIC E.

Chairman 42,215 Indirect Acquisition (Non Open Market) at $0 per share.

They call it "Automatic Sale".... I call it, the "Automatic Shaft".

I can't touch that stock with a 10' pole.

vooch
Vooch - 8 years ago
Kinda funny that I gave the -50% possible drop prediction BEFORE this past weekend's Barron's article.

You saw it FIRST on gurufocus.com!

doofrat
Doofrat - 8 years ago
It's amazing to me that a search engine that sells Internet ads got to be half the market cap of MSFT last month. Think about it, you probably have a computer at home and one at work, so does your spouse, parents, etc. etc. etc. Many, if not all of those systems has a MSFT operating system installed on it at $100 a pop with almost no variable cost to MSFT. Have MS Office on those machines? Tack on another $150-300 per machine. It's easy to see where MSFT get's all that money.

Also, MSFT has been around for years, and has a proven track record of being able to stay the big kid on the block and post earnings year after year after year. It took decades for MSFT to build that dominance, and that time makes it harder for competitors to move in.

Google is an internet search engine that makes it's money from ads and listings. Personally, I think the value of these ads is overblown, how can they be in the same valuation arena as MSFT selling ads and listings? That's not the only hole I see in Google's valuation.

Google hasn't been around long enough to warrant the high P/E ratios it has. Sure it has had some insane growth the last few years, but remember that a P/E of 30 means that if growth stopped, it'd take 30 years to get your money back that you paid for the stock. Let's say their earnings doubled, it'd still take 15 years to get your money back on the earnings, and in that 15 years, Google had better not have a decrease in earnings or have a competitor muscle in on their business (look how fast Google became dominant).

I also think that one has to question why Google went public in the first place? I think there is one very good reason they went public: to make the owners very rich and that's it. You see, when owning a business, you are only rewarded based on your present and past earnings, and only on those earnings. If you go public, suddenly, you are rewarded for your earnings in the future right now! With Google's forward P/E of 30, the market is rewarding to owners for 30 years of earnings already. If the owners sell their shares, where does that money come from? From patsies who buy these overpriced (my opinion)shares.

Got that off my chest, whew, I feel better now. Where were we?

Oh yeah, what is Google worth. I don't think anybody can pin down what Google is worth, there are too many factors that you can't boil down to facts or numbers. I think that mystery is what's helping buoy their price right now. Personally, the unknowns keep me as far away from Google as can be.

I think it's funny that we haven't seen any real good analysis of what Google's worth out there because the market they work in is so hard to grasp, but on the other hand, there is no shortage of estimates of Google's value, and most of those seem to be on the upside.

As Benjamin Graham says "In the short run the stock market is a voting machine, in the long run, it is a weighing machine"Well, if it was an election, I think Google would win by a landslide, in the next few years, it'll be interesting to see how much Google actually weighs as well.

I'll be watching from the sidelines, thank you.
gurufocus
Gurufocus premium member - 8 years ago
Great Comments!

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