J, GOOG's Q4 should reach $2.07-$2.12 non-GAAP, versus consensus estimates of $1.76, based on revenue of $1.45 billion [net of TAC].
Believe it or not but I may actually be light on the EPS because I've increased expenses proportionately with revenue [Other COG, R&D, Sales & Marketing and G&A all up an average of 40% over q3]. This EPS generates app. $10 in earnings for fiscal 2006 and Q1 results should see this number going to $12.
My forecast has GOOG stock price at $500 [or more] by mid February and $600 - $700 by mid year. After all, if GOOG can climb $100 in 30 days [Oct 21-Nov 21, 05] there's no reason it can't do it again.
There's no reason to second guess GOOG's historical ability to wow the investment community and this quarter is no exception. In fact, the seasonality factor combined with increased market share bodes very well.
I used to do this kind of EPS estimating in the 1996-1999 period with DELL. By comparison to GOOG, however, forecasting DELL was very easy. DELL was very forthcoming with information, the available research data precise, and their business model easy to analyze. Still, DELL always surprised me to the upside. Hopefully, GOOG will do the same! |
