Aegis top analyst Victor Anthony is confident on Alphabet Inc (NASDAQ:GOOGL) after hosting an investor conference call on Tuesday with search engine marketing firm IgnitionOne delving into search advertising trends on the tech giant so far in the fourth quarter of 2016.
The marketing firm revealed paid search spending from clients saw a 15% year-over-year rise, which marks quite an acceleration from last quarter’s 3.9% year-over-year decline, thanks to 28% in impression growth, 10% in click volume growth, and 5% in CPC growth. Although, the firm notes there also was a 15% dip in click-through-rates.
From Anthony’s standpoint, “The CTR decline was attributed to the jump in impression growth. Mobile was the key driver with spend increasing 69% YoY, desktop increasing 5%, while tablet spend declined 28% YoY (bid modifier effect). The retail and finance verticals were very strong while travel was flat and education spend was down YoY. IgnitionOne is expecting healthy growth in search in 2017.”
Overall, “Both IgnitionOne and RKG reported accelerating growth in search spend in 4Q16, suggesting that Google search growth is very strong this quarter. Add to that, strong growth at YouTube given that app tracking data show a sharp jump in MAUs in 4Q (see our last GOOGL note for details), we see Alphabet reporting strong FX-neutral results,” Anthony concludes.
Following the conference call, the analyst reiterates a Buy rating on GOOGL with a price target of $980, which represents a 21% increase from where the shares last closed.
Victor Anthony has a very good TipRanks score with a 63% success rate and he stands at #78 out of 4,289 analysts. Anthony garners 12.9% in his annual returns. When recommending GOOGL, Anthony earns 8.5% in average profits on the stock.
TipRanks analytics indicate GOOGL as a Strong Buy. Based on 27 analysts polled by TipRanks in the last 3 months, 25 are bullish on Alphabet stock, 1 remains sidelined, and 1 is bearish on the stock. With a return potential of nearly 20%, the stock’s consensus target price stands at $967.50.