UBS Maintains a 'Buy' on Google (GOOG); Investing in Emerging Businesses

UBS maintains a 'Buy' on Google (NASDAQ: GOOG), PT lowered from $780 to $765.

UBS analyst says, "GOOG delivered another quarter of impressive top line gains, as Net Revenue increased 29% Y/Y to $6.5B. TAC continued to decline, representing 24.5% of revenue, the lowest level ever. But with 1Q EBITDA margin at 56%, we believe investors will focus on mounting expenses...The increased spend was driven by new hires (~1,900 in 1Q), compensation increases (+10%), and ads / promotion for new products as the company addresses emerging / growth opportunities. We believe GOOG is justified to invest given the timing and scope of the emerging businesses. Saying that, we are taking down estimates to reflect the near-term spend." (FY11 EPS estimate lowered from $35.43 to $34.48 and FY12 from $42.21 to $40.97)

For more ratings news on Google click here and for the rating history of Google click here.

Shares of Google closed at $578.51 yesterday.

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