You know the drill. Please submit your estimates of:
1) Google’s Q4 NET REVENUE (excluding affiliate payouts),
2) The price at which Google’s stock will open the morning after the earnings announcement, and
3) BONUS: Your logic about both of the above. The more detail the better.
Please submit your bets to the comments section of this post by the market close on Wednesday, January 31st. As usual, the winner will get his/her name (real or alias) in lights in a follow-up post–and will also presumably cash in on an overnight stock trade (although that part is up to you). Note that the sweepstakes test your ability to not only project fundamental performance, but to have a good enough handle on the market consensus that you can anticipate how the market will react to it.
For reference, below is the Street’s printed revenue consensus, which is almost certainly low-balled. If Google hits this number, the stock will almost certainly tank. So the questions are, how much does the market think Google will beat this number by, and how much will it really beat it by? And what will happen to the stock in the morning?
I regret that we can’t use EPS for this game, but the random ways that analysts choose to calculate Google’s EPS make the number nearly meaningless. We could use operating margin, but then we’d still be arguing about whether stock-comp should be included (it should), and so on. And who has time for that…
So submit those revenue bets and let the sweepstakes begin!
Street consensus Google Q4 NET REVENUE estimate (per Yahoo Finance): $2.19 Billion, with a range of $2.05 to $2.31.