$GOOG Stock Update for 2020-09-08

Financials

  • Market return: 3% Month, 5% Quarter, 20% Half year, 27% Year
  • EPClub ARR: 17%
  • Recommend: 1.6
  • PEG: 5.53
  • EPS next 5Y: 6%

 

Summary:

  • Hold
  • 30% drop in net income due to Covid
  • Google cloud revenue growing
  • U.S. Justice Department plans to bring antitrust charges soon

 

Notes:

  • Google today is introducing a new feature for Android phones that will help legitimate businesses reach their customers by phone by having their brand name and reason for calling properly identified. The feature, known as “Verified Calls,” will display the caller’s name, their logo, a reason why they’re calling and a verification symbol that will indicate the call has been verified by Google.
  • Verified Calls is launching first in the U.S., Mexico, Brazil, Spain and India, with more countries to follow.
  • Google already offers a way for consumers to fight incoming spam with its Google Assistant feature, Call Screen. This feature allows the Google Assistant to answer the call on the user’s behalf, then ask them who’s calling and why. A transcript is sent to the phone’s owner, who can then choose to send a suggested response, pick up or hang up.
  • Google saw a sharp 30% drop from the company’s year-ago net income for Q2 2019. Revenue for the quarter was reported at $38.3 billion, marking a decline of 1.7% from the same three-month period a year ago. Alphabet noted in its quarterly filing that advertising revenue was adversely impacted by the continuing COVID-19 health crisis. However, the overall decline in revenue was partly offset by increases in revenue from Google Cloud and other non-advertising revenues.
  • Advertising generated nearly 79% of Google segment revenue for Q2 2020, which was down from 84% of the segment’s revenue in the same quarter a year ago. Google Cloud generated nearly 8% of segment revenue, up from more than 5% in Q2 2019. Other revenue sources, which includes non-advertising revenue from YouTube, comprised about 13% of the segment’s total revenue in Q2 2020, up from less than 11% in the same three-month period a year ago.
  • The U.S. Justice Department plans to bring antitrust charges against tech giant as soon as this month.
    People briefed on internal agency conversations told The New York Times that Attorney General William Barr wants to bring the case quickly.
  • Why It Matters: Alphabet has emerged as a leviathan that spans search, video streaming, advertising and many other areas.
  • The company controls 90% of web searches globally and earns nearly one-third of every dollar spent on online advertising, according to the Times.
  • A grouping of 50 states and territories support anti-trust action against the Sundar Pichai-led company.
  • While there is broad bipartisan agreement on the matter, Democrats are reportedly perceived to be moving slow on the case so that it could be brought under a future Biden administration, while Democrats are accusing the Republicans of rushing it under Trump, the Times noted.

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