Goog has YouTube which is atleast worth the same as Netflix. Ads network : 10 times that of FB. Google Cloud: Still small but a lot of growth potential and this market has place for 3 big players. Productivity tools : GDocs on web is much better than office 365. Waymo: Could be big. Playstore network because of Android. Most of the business are growing. I feel that if MSFT can rise so much in the past 2 years because of azure which was down for more than 20 hours yesterday, either we are over valued or Google is undervalued.
“Google Cloud: Still small but a lot of growth potential and this market has place for 3 big players.” A truly diligent analysis of the market space. Undeniable.
being sarcastic or not?
I mean this is not how valuation works. Potentiality or "better product" doesn't necessarily translate into $$$.
PE is 52, meaning you’re paying $52 for every $1 of earnings. By all accounts that’s rich and a bet on future earnings. 15- 17 is considered fair value based on historical standards. The question is essentially projection. Of future earnings. Your guess is as good as the analysts or chance.
Google paid 5B$ in penalties last quarter which dented their P/E ratio. If you discount that one time payment, they are at a 30 range which is better than MS.
16 is not fair value when a company has double digit growth. That's for a company with 3% growth.
Microsofts valuation isnt based on Azure. Its mostly Office on the cloud (and windows which will be dominant on desktop for years to come)
Google is undervalued If you believe next 60 years are for AI ? You know who would excel. Just keep buying its stocks
Lol, G's 90% of rev comes from ads. Important pieces(retail ads) of that business are under constant attack from competition(amazon, fb, snap etc.) This dependence on single rev stream doesn't demand higher PE. G does have many other bets. But they dont generate any profits yet.
Ad is just a money collection way. They can switch to subscription based. Microsoft could also choose to sell the product with ads but didn’t (couldn’t). Google can switch from ad based to subscription based. Products are diversified in internet world than any other companies. Imagine they make people pay for gmail, google map, google photo or Android. Free service with ad can be just a decoy to attract the customers quickly and hook them on services.
You have to understand the business model. Strength of the current model is to create intelligent experiences through millions of user's data. Making this a paid model will weaken G's strength and further erodes PE
Microsoft isn't rising just because of Azure. All its business are growing well and enterprise b2b revenue in general is higher quality than ad revenue because it's more predictable. Microsoft deserves a high valuation. Google seems fairly valued to me, neither too high nor too low. YouTube isn't worth anywhere near what Netflix is.
YouTube is not worth the same as N. All of N’s user base is paid subscribers (except free trials). YouTube has very few paid subscribers in comparison.
I think Google will eventually find a way to monetize their free service. Youtube is trying to switch to subscription based model with premium service. Android will have to be pay per OS due to EU lawsuit (or Google can simply use that as an excuse). Google’s AD is just a tool to attract users fast to their service which they had been successful so far. I think they will eventually find a way to monetize most of the services. I am not sure Sundar is the right guy though. There are different leaders for different times of the company. I think it is time to find a way to monetize for existing services including Youtube. Well Youtube started contributing much but it has so much more potential. Design is their weakness. They also need to build more services on top of existing ones. Need to start integrating services.
Maybe G is not undervalued, but FB is overvalued.
May be, even then it makes it a good buy over FB and msft right now.