Google Bi-Weekly Blog
Google's two stocks (GOOG) (GOOGL) have not made significant gains since June's opening. GOOGL opened the month at $547 and closed on June 12th at around $549 while GOOG opened at around $531 and closed during that same time at about $534. Seeing no significant gains in either stock. The stock's performance has been relatively unimpressive. Neither of the stock's are trading near their 52 week high which causes some reason for optimism. However I believe that our current price target for Google's class C shares of $649.86 is unwarranted. A more realistic price target in my opinion would be near $610. My opinion is backed by the fact that Google has been declining in its ROA over the past 5 years and for FY 2014 was at 12% - a trend displayed by companies that signify a slowdown in growth. After Q2 earnings we will have to revisit our valuation for the price target and conjure one that would be more appropriate given today's performance by Google's stocks.