Alphabet Investors: 55% Ad EBITDA Margin Is Key Metric To Watch In 'Other Bets' Category
Alphabet Inc Class C (NASDAQ: GOOG) (NASDAQ: GOOGL) reports earnings on Monday afternoon, and anticipation is high. Piper Jaffray's Gene Munster discussed the company's "other bets" category on CNBC, a listing of revenue and expenses regarding various Alphabet divisions that will be unveiled for the first time.
"What we're specifically looking for is what the advertising EBITDA margin is," Munster said. Investor expectations call for ad EBITDA near 55 percent.
"That's kind of the bogey going into tonight," he added. A beat or miss in this category could have an effect on the stock.
While Facebook Inc (NASDAQ: FB)'s ad business is growing faster than Google -- 50 percent growth last quarter to Google's 15 percent -- "the absolute dollars are more with Google," Munster said. Google's performance ads are more "tried and true."
Munster said Piper Jaffray is positive on Alphabet stock, but explained that the firm doesn't expect the current quarterly earnings report to be an enormous event for the share price. "Other bets haven't been really vetted in the valuation...something that could provide some upside," Munster added.
Piper presently holds a $812 price target on the stock. Shares are near $750 mid-day on Monday.
Latest Ratings for GOOG
|Jul 2016||JP Morgan||Maintains||Overweight|
|Apr 2016||Deutsche Bank||Maintains||Buy|
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