Google Stock Crashes On Earnings! Buy Google Alphabet Stock Now?!

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Well holy smokes guys google me google otherwise known as alphabet is absolutely crashing here today the stock is down more than $100 a share down around 8% okay and let me just tell you first off for google stock that is an absolute crash there are very few days i can ever remember in google’s history where the stock was down 8% or so okay usually this is a

Stock that is very steady usually it’s a stock that moves up and if it does move down and sometimes goes down like three to five percent an eight percent type move is very very rare for a company google size because we’re talking about with google you know down 8% that could be a hundred billion plus dollars in market cap wiped off the stock okay so i want to

Talk about their earnings here which were reported i want to talk about what numbers were missed what numbers were hit and i want to talk about my overall feelings in regards to google’s stock if i’ll actually be buying google stock google stock versus facebook stock which one on what i prefer kind of now that google stock has a following so much guys so start get

Into earnings for sure came in a dollar ninety cents x items versus ten dollars and 61 cents was expected so that’s a nice beat on the eps there from what analysts were expecting but revenue was really troubling so revenue came in at thirty six point three billion versus thirty seven point three billion so essentially meaning google missed by a billion dollars of

Revenue keep in mind google is usually a company if anything they beat numbers so for google to miss numbers by about a billion dollars guys that’s that’s a troubling sign i guess you can say they’re okay traffic acquisition cost came in at six point eight six billion versus seven point two six billion was expected so that was a very nice beat by google their paid

Clicks on google properties were up 39% cost per click on google properties was down 19% though okay so that’s obviously bad google is seeing decelerating growth after consistently expanding at 20% or more in prior periods revenue increased 17% down from 28% a year ago by the way would it became in at about 19% on a constant currency basis but ninis a still down

Big year-over-year in the ad sales rose 15% down from 24% a year ago so obviously there’s a big slowdown happening in google’s ad products okay and if we look at this it is still a big slowdown okay it’s still a nice number up 15 plus percent but needless to say this was a company if you look at all the past quarters it was doing anything from 18% to always up to

Like twenty four percent or so so needless to say if you look at this chart here it shows a big deceleration and essentially they’re advertising revenue now in my personal opinion i think youtube is actually helping a google overall so basically they include the google search numbers and youtube numbers together in my personal opinion i think the youtube numbers are

Actually helping google’s numbers a lot in a big way but it’s funny if you listen to commentary the cfo actually blamed the youtube algorithm that could cause lower engagement and ad revenue growth on this site so that’s pretty interesting even it seems a goo google has problems with algorithm i thought it was only youtubers complaining about the youtube algorithm

But apparently it’s also google themselves okay the cfo was probably referring to the changes youtube made to curb the spread of fernet fake news and conspiracy theories it shows youtube is willing to forego some of the short term ad revenue for long term health of the company which obviously is a very good thing overall but i in my person i wish i wish google broke

Out the you the google search numbers and the youtube numbers to that bet you most of the growth is still coming from youtube products rather than google stores i bet you if anything google search is probably in decline not necessarily because less people use google search but just the experience on mobile which most people use google search now on mobile devices

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I think it’s just you’re you’re much less likely to click on ads and things like that on the mobile products that’s my personal opinion there okay q1 2009 teen summaries results so if we look at this so they did have a fine in the quarter so if you include the fine on a gaap basis they had about six point six billion dollars in that income if you exclude the fine

They did about eight point three billion or about eleven dollars and ninety cents a share of diluted eps versus 950 if you include the fine you know the fine is you know it’s one of those things it’s a one-off type thing just like facebook just had to take a three billion dollar fine they happen sometimes it’s just the cost of doing business as a big business okay

If we look at their overall numbers you know 31 billion for the previous year in the same quarter they did in revenue 36 billion it’s still a nice increase yeah it’s not as good as expected but still five billion plus more dollars year over year is insane okay something on what you guys go ahead and take a look at is look at the number of employees they basically

Ramped up employees by about 18,000 year-over-year that is a big increase in those aren’t like minimum wage employees or something i bet you most of those employees are making anywhere from like 70 grand to like 150 grand okay and then all the other employee you know related costs that go around with hire an employee 18,000 plus employees in a in basically a year

Over year that’s a massive massive increase it’s not quite as big of a number as like say facebook as a percent but need to say still a lot of new employees at it at google so they’re obviously ramping up some things there okay now if we look a little deeper here we see the some monetization metrics i like to look at okay and what we’re going to see paid clicks on

Google properties basically showed a nine percent change negative from q4 to q1 but that is kind of normal because q4 usually just ad rates are really really high cost per click on google properties was down around nineteen percent year-over-year so that’s a little bit of a troubling sign there okay and then cost per impression on google network member properties

Was only up one percent year-over-year very very low number there now if you know me and you know google isle of google’s balance sheet i don’t think you can find a better company in terms of their balance sheet in literally the entire world like i just do not know a one okay google’s sitting with over nineteen billion dollars sitting around in cash and cash

Equivalents you have marketable securities of over ninety four billion and they have long-term debt of about four billion dollars so essentially meaning that’s the best balance sheet in the world that literally you know facebook’s got an amazing balance sheet but i would say google’s is even better apple used to have a super amazing balance sheet but they’ve taken

Out a lot of debt to do buy back since things like that so apples not the winner you know there’s no one in the stock market and my personal opinions got a better balance sheet than google is unbelievable and here’s the thing i love to give value to those cash and those short-term investments yeah this is essentially just money sitting around i always you know i

Always teach us in all my courses and whatnot when i talk about balance sheet i always like to basically take the in cash equivalents plus do you know whatever investments they have subtract the debts from that and then essentially you get a new number in if you if the numbers are a very positive number then you subtract that from the market cap because essentially

It’s like buying a house okay let’s see you were buying a house you’re buying this house and you’re like oh it’s 200 grand well what if i told you it was a hundred thousand dollars buried in the backyard also in that house looks like a lot better deal right because you get a house for 200 grand but there’s a hundred thousand buried in the backyard you get there’s

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The same exactly you know the way you should think about it in regards to buying a company you’re buying into a stock it’s not just about their earnings is about what they have on their balance sheet if they have a massive amount of debt that’s gonna hold your company back they’re gonna have to make a ton of interest payments things like that but if they’re loaded

With cash and investments they can use that money to do buybacks which will obviously help out the earnings per share they can use that money to acquire other companies which will hopefully boost their earnings per share things like that right they can pay that money out to you as a shareholder in the form of dividends there’s a lot of different things you have

To give value to the balance sheet and that’s why i like to do like this and i believe warren buffett does it the same way so if we give actual value to the cash and all those investments on that that balance sheet essentially really the market cap you’re paying for those companies around seventy billion dollars that would take the p/e down to about 22 to 23 cuz

Obviously it’s a much you know less big of a market cap to count against the company and you’re when you’re you know calculating that net income versus the market cap overall and if we look at alphabet once again it’s down eight plus percent over one hundred dollars a share but on a four p basis if you get you if you’re giving value to the balance sheet actually

You’re getting really like a four p of 17 to 18 even if you’re not giving value to the balance sheet you’re still getting a 21 21 and a half roughly there so needless to say in my opinion if you buy google stock let’s say i go buy google stock today will it make money in five to ten years i almost say almost a hundred percent with certainty okay there’s almost no

Question in my mind if i go buy some google shares today that those shares won’t be significantly higher fifty percent higher maybe a hundred percent higher in five to ten years than today it’s what i call an easy money stock there are certain stocks in the stock market that i call easy money stocks google is one of them facebook’s one of them apple’s one of those

Types of stocks like you you buy them you for the next five to ten years it’s almost you know nothing’s 100% certain but it’s almost 100% sir you will make money over the next five to ten years because it’s just like look at their businesses okay even if they slow down and they’re still gonna be increasing those businesses and they’re look like fundamental pillars

In the overall economy okay so here’s a question okay i’m thinking it’s about time for google to start a buyback especially if that stock falls a little more i think google should do a big buyback in my personal opinion they’re loaded up on cash or load up and invest in go ahead and knock out a twenty billion dollar buyback a forty billion dollar mark buyback you

Still have an amazing balance sheet over there at google but you’ll go ahead and you know buy some shares back you know go ahead and then you know bring down that p look big because that eps should rise and rise not just because the company should be more profitable but because they’ll buy back more shares they’ll take less shares off the market obviously i think

It would be a good thing for google overall to just you know go ahead and say hey we’re gonna do a twenty billion dollar buyback a thirty billion dollar forty billion dollars it’s not the end of the world for them like they would still have massive amounts of money on that balance sheet okay and then the other thing is so if we look at the add beasts out there

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There’s google and there’s facebook okay amazon is coming up in the in the advertising game but still google and facebook at the end of the day or kind of the the beast of you know advertising it’s kind of like the monopoly of advertising right so if i’m looking at these two star i’m still wanting my money personally in facebook and here’s kind of the reason i like

Facebook’s valuation better than i like google not only that when i look at facebook i kind of think of it as like a younger google a little bit of a younger google in the way i imagine is like the facebook platform it’s kind of like google search okay there’s a facebook platform you know what the facebook platform represents to facebook the company it’s similar

To what google search represents to the you know google the company right do the legacy products that will really built the company and then if i kind of look at instagram i kind of imagine that it’s like youtube that’s the big growth that’s you know where they’re getting a ton of monetization from and that’s where they’re getting a ton of engagement from and

That’s kind of the new frontier for those companies and then if you kind of look at google’s rest of their businesses they kind of have all these other things going on that they’re you know trying to generate into big businesses and that’s kind of like facebook in regards to like oculus which is their virtual reality and then you kind of think of like whatsapp

And you think about facebook messenger those type of products are kind of like you know there are other bets like google has right google has these other things going on that they’re trying to build these other businesses that’s the same thing with facebook where they have these other things going on these haven’t really built them into big moneymakers yet but

That’s probably coming down the road so if i’m looking at facebook i’m just looking at a younger google in my personal opinion i you know i i so i do prefer facebook but i wouldn’t mind owning google as well because if you own both them you there’s kind of like advertisers are spending money on one of the other okay they’re either spending money in through google

Or they’re spending money on facebook that’s like where people are and that’s where you kind of got to spend money if you’re an advertiser out there if you’re a small company big company mid-sized company it really doesn’t matter across the board you’ve got to spend money with you know one of those two platforms essentially at the end of the day and so i love both

The companies i just personally prefer facebook at this point in time and i think i’ll make a better return on investment over that say the next five years seven years through facebook stock and i actually will through google stock at this point time but like i said i love both these stocks i wouldn’t i wouldn’t be surprised if i pick up some some google stock at

Some point in time guys there’s because that company is very well-run they’re beasts they got no future businesses that are gonna continue to grow they got their cash cow business which is still google search they got youtube which is expanding and they have a fortress and absolute fortress for a balance sheet at that company guys so it google’s another easy money

Stock hold that stock for 5-10 years it’s almost impossible to make putting you guys in that stock okay so anyways i hope you guys enjoyed this as always let me know your opinion on google stock down there in that comment section also if you have an opinion on google versus facebook i want to hear from you guys in that comment section as always make sure you smash

That thumbs up button thank you for watching and have a great day

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Google Stock Crashes On Earnings! Buy Google Alphabet Stock Now?! By Financial Education

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