Google Analyst Roundup: Dawn Of A New Era?

Google Inc GOOG GOOGL on Thursday reported a better-than-expected second quarter earnings that sent shares surging higher by more than 12 percent.

Here is a roundup of what some of Wall Street's top analysts are saying about the print.

Deutsche Bank: Entering A Dawn Of A New Era?

Ross Sandler commented in a note that shares of Google are now starting to "correct" after another "solid" quarter. As such, the analyst suggested this could be "the dawn of a new era" for investors as the company is showing it "cares deeply" about its stock price and talent retention.

Commenting on the results, Sandler stated that "it's becoming clear" that margins are "done going down for now" and Google U.S.' incremental $1.09 billion in revenue from a year ago suggests "minimal share loss." In addition, the overall tone of the post earnings conference call was "upbeat."

Related Link: Google Soars On Q2 Results; Analyst Reactions Are Mixed

Looking forward, the analyst is expecting shares to expand on margin stabilization, revenue re-acceleration and an improved management tone.

Goldman Sachs: Porat Did Not Disappoint

Heather Bellini commented in a note that Google's newest CFO hire, Ruth Porat, "did not disappoint" as she focused on matters that the market cares about the most, including the ability to "invest with discipline" and a "more pragmatic outlook" on its balance sheet.

Bellini also noted that Google's second quarter marked a reversal from the prior four quarters as paid clicks growth rose 18 percent, above the Street's 14 percent expectations. On the other hand, CPCs (cost-per-click) came in below at -11 percent year-over-year versus the Street's -4.5 percent expectations.

Finally, the analyst stated that Google's management team "emphasized strength in mobile" and continues to focus on "strong growth" at YouTube which is a big driver of growth.

Barclays: Beat On All Three Key Metrics

Paul Vogel commented in a note that heading into the earnings print, investors were looking for solid revenue, improving margins, and positive commentary from Porat. The analyst suggested that the company "beat on all three metrics."

Vogel also commented that for the past few quarters, Google's stock remained "relatively flat" as the bear argument focused on a maturing search business, a smaller than expected boost from mobile and declining margins. However, this quarter "alleviated many of those concerns."

Finally, Vogel's takeaway from the conference call was that the company is "generally supportive" of cost control targets, margin estimates and returning cash to shareholders.

Credit Suisse: ‘Lighting Up The Monetization'

Stephen Ju commented in a note that for the second straight quarter Google has shown investors "signs" that YouTube is contributing meaningfully to revenue. While Google Play was in-line with estimates, it did grow at a 35 percent rate on an FX-neutral basis.

Ju continued that YouTube and Google Play will both continue scaling and see margin expansion and further drive operating and free cash flow dollar estimates higher.

Posted In: BarclaysCredit SuisseDeutsche BankGoldman SachsGoogleGoogle PlayHeather BelliniPaul VogelRoss SandlerRuth PoratStephen JuYouTubeAnalyst ColorAnalyst RatingsTrading Ideas

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