The online advertising market is more than alive and well. Alphabet’s Google (NASDAQ: GOOGL) is crushing expectations. In its third-quarter report, the company reported earnings of $9.57, beating estimates by $1.24 a share. Revenue rose around 24% to $27.8 billion.
Alphabet is on pace to generate $100 billion annually.
During the quarter, cost per click stabilized, a better result than last quarter when it fell by over 50%. YouTube is performing strongly. Google’s ads cater to the visitor so much so that it contributed to the company’s revenue beat. Google is clearly collecting the relevant information that is uses smartly to optimize its advertising to them.
Alphabet is a stock value investors should not ignore. It has a balanced combination of growth and value. Given the stock trades at a multiple of cash flow at under 20x, chances are low that any profit-taking will not last. GOOG stock could stay at $1,000 a share at its low point. Operating Income has room to improve. Alphabet lost $800 million in its "other bets," a cost it needs to finance other business opportunities.
