Goldman Sachs Comments on Google's (GOOGL) Q3
Goldman Sachs maintained a Neutral rating on Google (NASDAQ: GOOGL) and lowered its price target to $600.00 (from $625.00). The change follows its Q3 print. Analyst Heather Bellini views results as ok.
"In aggregate, paid clicks increased 17% yoy; below consensus of 23.5%. This is the lowest we have seen since 3Q10. CPCs on the other hand declined 2% yoy in 3Q14 (-1% cc) vs the Street of -4%. Paid clicks on Sites decelerated to 24% from 33% growth while the decline in CPCs improved (-4% vs. -7% in 2Q14). Network paid clicks showed a big deceleration due to ongoing policy changes with the decline in CPCs also seeing significant narrowing (-4% in 3Q14 vs. -13% in 2Q14)," said Bellini.
"Given the fear and uncertainty in the market of late, we see Google’s quarter as fine. While there will be some concerns regarding paid click growth, CPC trends are improving. The real debate in our view, and governor on the multiple, remains around Google’s ability to be able to be as relevant in the world of mobile advertising as it is has been on the desktop. While we no doubt expect the company to continue to benefit from the ongoing shift to digital advertising, we see its share of the incremental dollars flowing into the space as declining," she added.
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Shares of Google closed at $536.92 yesterday.