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Can YouTube Boost Google's Profits? Analyst Explains Why The Answer Could Be 'Yes'

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Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)'s YouTube platform will become a significant source of profit growth boosting the value of the company's shares, an analyst said Friday.

Tigress Financial's Ivan Feinseth reiterated a Strong Buy rating and said the video site offers potential to become a "top-tier content provider" that will "drive economic growth."

Google doesn't break out revenue from its YouTube segment.

Google's recently announced plan to potentially offer bill-paying services via its Gmail service could further enable Google to provide lending and financial services, which Feinseth called "another huge opportunity."

Related Link: A Glimpse Into Facebook's Future

Although Google's recent 24 percent increase in its budget for research and development to $9.8 billion has stirred discomfort among at least a few analysts, Feinseth called the action "a positive."

"Innovation remains the key to Google's future," Feinseth said, calling incoming Chief Financial Officer Ruth Porat, "a good steward" for the company's massive cash position.

Porat signed on for total compensation that includes a salary of $650,000 plus a $5 million, one-time signing bonus, and $65 million of stock grants, according to reports Friday.

Google, up more than 5 percent in the year to date, changed hands recently at $559.39, off $4.25.

The company has a mean rating of Buy among 50 analysts tracked by FactSet.

Latest Ratings for GOOGL

DateFirmActionFromTo
Dec 2017Evercore ISI GroupInitiates Coverage OnOutperform
Oct 2017CitigroupMaintainsBuy
Oct 2017Canaccord GenuityMaintainsHold

View More Analyst Ratings for GOOGL
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