Why Google Investors Should Be 'Cautious' Before Earnings

In a report published Monday, Wedbush analysts maintained a Neutral rating on

, with a price target of $530, ahead of its 1Q15 results. The company is scheduled to report its 1Q15 results on April 23. The analysts expect Google to report its net revenue for the quarter at $13.75 billion, representing 13 percent y/y growth, versus 17 percent y/y growth in 4Q14 and 22 percent y/y growth in 1Q14. Non-GAAP EPS is estimated at $6.56, below the consensus figure of $6.63. In the report Wedbush noted, "Overall, our checks and industry data points from search engine marketers (SEMs) suggest decelerating spending trends for 1Q driven by a slowdown in paid clicks. We are modeling core Google gross advertising revenue growth of 10% y/y for 1Q (vs. 15% y/y in 4Q14 and 17% y/y in 1Q14) and 10% y/y for 2015; on a FX adjusted basis, we are modeling 15% y/y for 1Q (vs. 18% y/y in 4Q14 and 18% y/y in 1Q14)." The analysts believe that there are "several potential positive emerging catalysts" for Google, including the upcoming mobile algo change, paid app placement ads and new CFO. Moreover, checks suggest optimism related to advertisers picking up spend after a seasonally slow 1Q. The checks continue to suggest growth of about 15-20 percent for 2015.