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Soleil Analyst Sees Buy Opportunity With Google


By John Letzing

A Wall Street analyst covering Google Inc. (GOOG) has pointed to a dip in the Internet giant's stock price as an opportunity to pick up shares on the cheap.

Soleil Securities Group analyst Laura Martin wrote in a note to clients Friday that while the Nasdaq Composite Index has fallen roughly 12% since the beginning of the year, shares of Google have slipped roughly 30%.

The online search giant posted generally disappointing second-quarter results last week, citing recent weakness in the U.S. economy.

Martin calculated that due to Google's "strategic market position" and other factors including a strong culture of innovation that should help it develop additional, valuable products, its stock contains a "growth option value" of $ 105 a share.

Combined with a valuation based solely on Google's existing businesses, Martin calculated that Google shares are actually worth $580 and raised her rating on the shares to buy.

Google shares rose more than 3.5% recently to $492.13.

Martin noted that it took rival Microsoft Corp. (MSFT) 31 years to reach net revenue of $48 billion, while Google, if it maintains its margins and other metrics, is on track to achieve the same feat after 21 years of existence.

Google is now roughly 10 years old.

-John Letzing; 415-439-6400; AskNewswires@dowjones.com

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07-25-081513ET
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