MKM Calls Google's Growth Story 'Alive'

In a report published Friday, MKM Partners analyst Rob Sanderson initiated coverage of

with a Buy rating and price target of $805. The analyst believes that the company's growth story is "alive," while the stock is entering into a more "shareholder friendly" phase. The stock surged significantly in after-hours trading on Thursday, following Google's announcement of strong Q2 results, driven by acceleration in YouTube, as well as strong mobile search and 20 percent constant currency growth in websites revenue. "The growth story is very much alive. However, we think that solid expense control and discussion of disciplined capital allocation going forward were the more material drivers of the stock gains," analyst Sanderson said. Although the stock is valued at a level similar to large cap media groups, although Google has been growing at twice their rate and has meaningfully better prospects for long-term growth. "We think the stock will be revalued higher on a more shareholder friendly discipline in this next era of GOOGL's development," according to the MKM Partners report. The analyst believes that are several long-term growth drivers for the among, including "mobile's ability to influence the 90% of retail transactions not online, video ad dollars migrating online, monetization of mobile apps, and new ad products."