Filed under: Earnings reports, Good news, Google (GOOG)
Despite the fall in Google’s (NASDAQ:GOOG) stock, there’s a theory that the company will do well in a recession. Because its Ad Sense text market program draws such a huge number of customers and is so efficient, it might be the last thing companies want to take out of their advertising budgets. Google also has a lot of revenue overseas.
According to Reuters, Google CEO Eric Schmidt said, “We believe that if there were (a U.S. recession), we’ll be well positioned. We’re not particularly dependent on any particular one market. There’s not a lot of advertising for any one market over another.” He knows one thing that the markets don’t, which is what his revenue actually looks like during that last quarter, even the last week.
If Schmidt is spot on, then Google is probably grossly undervalued and is still growing at the rapid rate that the market is used to. The company’s stock is down to $420 from a 52-week high of $747.
It is not likely that the company is sending a false signal. Google is much superior off than Wall Street thinks.
Douglas A. McIntyre is an editor at 247wallst.com.
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