In a research report sent to investors today, Cantor analyst Youssef Squali maintained a Buy rating on Google (NASDAQ:GOOGL) with a $620 price target, as the company is heading into fourth-quarter earnings results on Thursday, January 29. 

Squali noted, “We expect Google to report solid 4Q:14 results, driven by solid Search and Display results on O&O sites, particularly in the U.S., with tailwinds from Enhanced Campaigns, PLAs, programmatic and video. Capital intensity and margin deterioration remain long-term concerns, however.”

The analyst continued, “Our 4Q:14 consolidated net revenue and EBITDA estimates are roughly in-line with consensus at $14,798.4M (+19.4% Y/Y) and $7,011.0M (47.4% margin), respectively, vs. the Street (FactSet) at $14,756.7M and $7,265.8M. Our margins are below Street’s forecast largely on our expectations for continued high investments/expenses levels this quarter.”

Furthermore, “Capex has been hovering at ~15-17% of gross sales, growing materially faster than revenues. 4Q:14 will give us another hint of how lumpy this spend is, begging the question of whether the business has become more capital intensive and therefore prone to higher risk/margin erosion over time.”