Alphabet Inc GOOGL delivered a meaningful beat on all three fronts: Search, YouTube and Cloud, according to BofA Securities.
The Alphabet Analyst: Justin Post maintained a Buy rating on Alphabet and raised the price target from $1,850 to $2,000.
The Alphabet Thesis: The company announced growth in key metrics and repurchased shares during the quarter, Post said in a Friday note.
Net revenue came in at $37.8 billion, ahead of the Street’s $35.3-billion estimate, with Search growing 6% versus the BofA estimate of 4% and the consensus projection of zero, the analyst said.
YouTube advertising grew 26%, well above expectations, while Google Cloud’s growth accelerated by two percentage points, he said.
“GOOG stock was up 7% AH, but we think more room to go given YTD underperformance, vaccine benefit for depressed verticals, and new Cloud disclosure coming in 2021,” Post said.
“We are encouraged by a faster than expected search recovery with 3 more quarters to play out, while Cloud and YouTube are back on track. We remain constructive on the growing value of adjacent businesses (Waymo, Cloud, YouTube), and think Cloud disclosure will elevate the importance of sum-of-parts valuations.”
GOOGL Price Action: Class A Alphabet shares were up 3.52% at $1,611.61 at last check Friday.
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