Axiom's Victor Anthony Previews Google Earnings

In a report issued Monday, Axiom’s Managing Director of Internet Media Victor Anthony provides a preview of Google Inc GOOGL GOOG’s second quarter financial results, to be announced on Thursday afternoon, after the market closes.

According to the note, the experts at Axiom are expecting results in-line with our their estimates, which are close to consensus (see below). The tech behemoth’s shares have been “stuck in neutral” for the past year-and-a-half, outpaced by peers like Facebook Inc FB.

The stock currently trades at a discount relative to its peers, relative to growth, and relative to the S&P500. However, the analysts note that, “for the stock to work, investors would need to see: 1) a resolution of the EU antitrust investigation, 2) visibility into margin expansion and the likelihood of earnings outperformance, and 3) hints of a coming capital return initiative.”

What To Expect From The Earnings Call

Thursday’s earnings call “could shed light on margin potential and a capital return plan under the new CFO. Mobile search and YouTube performance are again likely to dominate the call,” the analysts comment.

The firm is modeling net sales of $14.3 billion (up 12.8 percent year-over-year), adjusted EBITDA of $7.1 billion (up 13.8 percent, on a 49.6 percent margin), and adjusted earnings of $6.78 per share, above consensus of $6.76 per share, and earnings of $6.08 per share reported a year ago.

Axiom maintains a Hold rating and $615 price target on shares of Google (GOOGL).