I love the phrase "trading at a not-preposterous 55x earnings"
Let's look at P/E ratios of their competition at the top:
XON 13
GE 18
MSFT 24
AT&T 30
Citigroup 8
Let's look at some other big web/software firms:
Oracle 26
Adobe 42
Yahoo 60 (40B market cap)
Amazon 100 (but only a 30B market cap)
Google's Market Cap is 220B. The older big software companies (Oracle, Adobe, MSFT) seem to have been stuck between 20 and 40 for a while now. I conclude based on this rigorous analysis that Google's eventual ideal P/E is around 30, and that investor hype has inflated its value by around $110B, or about 1% of US annual GDP.
Let's look at P/E ratios of their competition at the top:
XON 13
GE 18
MSFT 24
AT&T 30
Citigroup 8
Let's look at some other big web/software firms:
Oracle 26
Adobe 42
Yahoo 60 (40B market cap)
Amazon 100 (but only a 30B market cap)
Google's Market Cap is 220B. The older big software companies (Oracle, Adobe, MSFT) seem to have been stuck between 20 and 40 for a while now. I conclude based on this rigorous analysis that Google's eventual ideal P/E is around 30, and that investor hype has inflated its value by around $110B, or about 1% of US annual GDP.