Can Google Prove Financial Analysts Wrong?
Barron’s, the weekly financial newspaper, reportedly claimed this week that Google will see its share price take a tumble.
Barron’s said Google is overvalued because it trades at 37 times next year’s expected earnings and because its growth rate is slowing. It also noted that Google now has the 15th largest market capitalization among U.S.-traded shares, and its price-to-earnings ratio is two to three times higher that of similarly sized companies.
For the past couple of years, everyone and their mother has suggested Google stock is going to take a dive. What ends up happening? The stock soars to a $500 per share high! I’ve personally given-up predicting Google’s earnings, but you have to credit Barron’s for getting in on the linkbaiting meme – flaming a big company is a sure-fire way to attract attention.