RBC's Mark Mahaney Feels Google Is A Better Pick Than Facebook Right Now
With the second-quarter tech earnings season almost over, RBC Capital Markets' Mark Mahaney came out with his quarterly review of technology stock.
Amazon Still The Leader
"I think, actually, fundamentals were very much intact if you look at the year-over-year growth rates for the leading online advertising, travel, retail names," Mahaney said. "There were a few inflection points' stories. At the top, that list has to be Amazon, revenue growth acceleration and margin expansion."
Google Over Facebook
Mahaney was asked if he is picking Google over Facebook solely because of the relative valuation of both companies. He replied, "It's mostly that. The risk-reward here looks just incrementally better for Google than it does for Facebook; we still like both names.
"If you look back over the 12 months, we have had a really nice rally in Facebook's stocks twice, last year and then going into the June quarter print."
Mahaney continued, "Facebook continues to be a good long, the upside though for us is kind of 10–15 percent. Google has a couple of catalysts and some of them are going to be negative, by the way – the European issue and maybe Apple. But it got one major catalyst in terms of cash returns to the shareholders, which means you can get 20 to 25 percent return. So, it's really the relative risk-rewards on the stock," Mahaney concluded.
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