) posted $1.19 second-quarter (GAAP) earnings per share on a sharp revenue rise. First Albany raised estimates and kept a buy recommendation on the stock.
Analyst Jason Avilio says he thinks the market is disappointed by lower second-quarter margins and commentary on seasonality. He expects the company to make aggressive investment decisions; thus, margins may compress further, particularly in quarters when revenue growth slows. He views this investment decision as prudent, given its growth opportunity. He also notes that seasonality is no surprise, particularly in Europe.
Avilio says he would be a buyer of Google shares on weakness, as he believes the company's accelerating revenue growth and strong profit metrics make it the stock to own in the second half of 2005.
He increased his $5.33 2005 EPS estimate to $5.50, and $6.22 for 2006 to $7.43.