Blodget Joins Google Chorus
By Jonathan Berr
TheStreet.com Senior Writer
1/27/2006 7:29 AM EST
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Less than a week before Google (GOOG:Nasdaq – commentary – research – Cramer’s Take) is set to report fourth-quarter earnings, speculation on Wall Street about how the most popular search engine will perform is reaching a fever pitch.
The Mountain View, Calif.-based company has stirred debate ever since its 2004 initial public offering. While critics cried that the company was deeply overvalued at its $85 IPO price, fans engaged in a never-ending round of price-target raising that culminated in one respected analyst putting $600 in his bull’s-eye.
The excitement pushed the stock into the high $400s earlier this month, 459% above the IPO price, before a mild pullback brought the stock down to its recent $435.
In any case, Google now finds its market valuation around $130 billion, surpassing tech mainstays Dell (DELL:Nasdaq – commentary – research – Cramer’s Take) and Yahoo! (YHOO:Nasdaq – commentary – research – Cramer’s Take), among countless others.
So who’s got anything left to say about Google? Well, veteran price-target setter Henry Blodget, for one.
“Google’s recent gyrations have illustrated that the stock is now firmly in the thrall of fear and greed,” writes the disgraced former Wall Street analyst turned blogger, on his site InternetOutsider.com. “Any hint that Google will no longer blow away Street estimates, therefore, and the stock will tank.”
Add confusion to the mix too. Analysts have a poor track record in predicting the earnings of the Mountain View, Calif.-based company. Google has beaten earnings estimates in three out of the past four quarters. The company catapulted past earnings estimates during the third quarter, which had been expected to show signs that things were slowing down.
Fourth-quarter earnings estimates for Google are wide enough to drive a truck through. Wall Street analysts are predicting that earnings per share could be as low as $1.51 and as high as $1.98, according to Thomson Financial. Sales projections range between $1.18 billion and $1.37 billion.
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