Alphabet Inc reported its 2Q16 revenues and EPS ahead of expectations on accelerating ad growth and margin expansion, Axiom’s Victor Anthony said in a report. He maintained a Buy rating on the company, while raising the price target to $990. Read More
Multiple Revenue Drivers Ahead: In 3Q16, revenue growth “should benefit from Expanded Text Ads (iProspect saw 10-20% higher CTRs), device bid modifiers, and responsive display ads,” Anthony mentioned. He expects growth in the coming quarters to be boosted by increases in mobile pricing, growth of search in emerging markets, YouTube, growth of the Google Display Network, shopping ads and new initiatives in verticals like hotels, autos, and finance.
The adj. EBITDA estimates for 2016 and 2017 have been raised from $36,197mn to $35,977mn and from $42,887mn to $42,493mn, respectively. Anthony added, “The shares are cheap relative to growth and relative to the peer group.”
