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Jsavvy293 , you are not alone - i too missed this one and still regreting it
If you look at charts that show both the price and the volume, the biggest price increases always come with high volume. That indicates that funds are buying.
The P/E may seem high, but if they can maintain the growth that the analysts project, it more than warrants the high P/E. They're projecting something like $2 EPC next year, which gives a forward P/E of about 75. If they can hit $10 EPC and maintain even just a P/E of 40 in five years, that would be a stock price of $400. There's certainly still room to grow from here.
You are not insane. There are just a lot of idiots who don't understand how the stock market works piling in like lambs to the slaughter.
A Google share at this price is no longer an investment, it's a turn of the roulette wheel banking on the bubble effect and it's just a matter of time before the long painful price decline starts.
Anyone who regrets missing the IPO should not be kicking themselves.
>>and maintain even just a P/E of 40 in five years
You are kidding right? What kind of investment is it where you should be pleased to have a 5 year forward PE of 40?
When I invest my money I expect it all back in the following year. That is a 1 year forward PE of 1
Google has an EPS of $0.72 over the past four quarters. That's what a P/E if 200 is based on, but a trailing P/E really doesn't make much sense when a company is growing this fast. People don't buy stocks based on what the company HAS earned in the past, but what they think they WILL earn in the future.
Analysts project an EPS of $2.26 for 2004. At current prices, that's a P/E of about 65.
Analysts project an EPS of $2.80 for 2005. At current prices, that's a P/E of about 50.
Analysts project a 30% annualized growth rate over the next five years. If they can maintain that type of growth, their EPS should be close to $10 in five years. At current prices, that's a P/E of about 15. If their stock appreciates to $300 over the next five years (and their EPS grows to $10), that will be a P/E of 30 five years from now, which is very reasonable.
...That is a 1 year forward PE of 1....
What could possibly give you a PE of 1? Do you go to Vegas and bet it all on Black and then if it hits you got it, but what happens when red comes up?
jsavvy293, gopi: If you missed the IPO, don't worry. I got in and now I feel foolish at having gotten out under $110, but really why cry over spilled milk.
I wouldn't like to buy the stock at this price on the asumption of 5 years down the road, a lot as we all know can happen in that time.
Good move by the founders selling overpriced stock to the same mugs who bought the same type of overpriced stock back in the late 90s.
At its peak (late 1999/early 2000), YHOO was valued at 150 billion and was on a run rate to do about 1 billion in sales and about a quarter billion in earnings. That's a forward P/E of about 600.
Currently, GOOG is valued at about 40 billion and is on a run rate to do about 4 billion in sales and almost a billion in earnings. That's a forward P/E closer to 40.
GOOG would need to be trading about about $2000 to be as outrageously priced as YHOO was during the heyday of the dot com bubble.