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Technology Stocks : Alphabet Inc. (Google) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (185)	5/19/2004 12:07:41 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 15851

Well I've had this discussion several times with people lately- what is google worth. I think it hinges on what yahoo is worth, so then what is yahoo worth? If you value yahoo on earnings alone, and ignore everything else yahoo is extremely overvalued. The problem is yahoo's cash flow is about double earnings. Yahoo will likely generate one billion in FCF this fiscal year. These cash flow generation numbers are causing goldman and other firms to call yahoo undervalued by 30%! Based on Goldman Sachs' forecasts, Yahoo's (YHOO: news, chart, profile) estimated earnings yield a 40 percent compounded annual growth rate through 2007, according to a note issued by Goldman Sachs analyst Anthony Noto. Cash-flow estimates could actually grow at an even faster clip of 45 percent compounded annually, Noto estimated. marketwatch.com This discrepancy between cash flow and earnings are going to get worse with options expensing.