Improving YouTube Margins Won’t Move Needle for Google
Google (NASDAQ:GOOG) competes with Yahoo (NASDAQ:YHOO), AOL (NYSE:AOL), and Microsoft (NASDAQ:MSFT) in the search advertising market. We currently have a Trefis price estimate of $683 for Google’s stock, about 35% above the current market price of $504.
Trefis members have created forecasts for a key driver of Google’s (NASDAQ:GOOG) stock over the last week: YouTube EBITDA Profit Margin. The members’ forecast suggest that YouTube EBITDA Profit Margin will be roughly in line with the Trefis forecast.
We estimate that YouTube constitutes around 3% of the $683 Trefis price estimate for Google’s stock. Below is the chart showing recent estimates created by Trefis members for YouTube EBITDA Profit Margin in detail.
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1. YouTube EBITDA Profit Margin
The average of forecasts for YouTube EBITDA Profit Margin created by Trefis members indicated a projected increase from -8.5% in 2010 to around 25% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from -10% in 2010 to 20% by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Google’s stock.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Google’s stock to YouTube EBITDA Profit Margin.