Analyst says Google "Q4 not as bad as it looks"


That’s the headline on the research note from Anthony DiClemente at Barclays Capital as Google’s share price plunged on Friday. The company’s Q4 results reported after the market closed on Thursday (1/19) came in below expectations – a rare miss for the hot tech sector leader.

DiClemente said the miss was driven by declines in cost-per-click growth and foreign exchange. “However these results masked what was otherwise a quite solid quarter as Google’s paid click growth accelerated to +34% year-over-year, margins improved, and display and mobile continued to perform well. With the exception of Germany, trends in most world regions and verticals remained broadly stable, which gives us further confidence in the underlying growth trajectory as we reiterate our 1-Overweight rating and believe the sell-off presents a buying opportunity,” he wrote.

In fact, DiClemente lowered his price target for the stock only slightly, to $700 per share from his previous $730. The stock opened Friday at $590.90, down from Thursday’s close of $639.57.

“Display and mobile continue to perform very well and are becoming increasingly material drivers of the business. GOOG disclosed that Display is on a $5B annualized run rate (up from $2.5B in 3Q10) and spending on the DoubleClick Ad Exchange is up 130% year-over-year,” the analyst wrote.