Here's What Wall Street Is Saying About That Big Google Earnings Beat

The stock is soaring

Google Sees Click Growth But Value Falls

After the bell yesterday, Google unveiled earnings that topped analysts’ estimates, sending shares up as much as 14 percent in late trading on investor optimism that the Internet search giant can keep costs in check. As of 7:15 a.m. in New York, the stock is set to open around $650.

The stakes were high this quarter; Google shares have struggled over the past year and it was also Ruth Porat's first earnings report as CFO at the tech giant after she left Morgan Stanley earlier this year.

Google's second-quarter profit before certain items was $6.99 a share, and sales, minus revenue passed on to partners, rose 13 percent to $14.4 billion. Analysts on average projected $6.73 a share in profit on $14.3 billion in sales, according to data compiled by Bloomberg.

As is the case after any large company reports earnings, Wall Street analysts are sending out their thoughts on the earnings report.

Here's a roundup.

Morgan Stanley's Brian Nowak, Benjamin Swinburne, Alicia Tam, and Owen Hyde:

Solid quarter driven by better than expected search and accelerating YouTube growth. We remain on the sidelines as we gauge the sustainability of top and bottom-line beats into the back half and 2016. ... A solid start for new management.

Goldman Sachs's Heather Bellini, Shateel Alam, Nicole Hayashi, and Jack Kilgallen (price target raised to $660 from $580) 

This was new CFO Ruth Porat’s first earnings call and she did not disappoint. She focused on the matters that the market cares about the most, namely the ability to invest with discipline and what appears to be a more pragmatic outlook on its balance sheet.

Deutsche Bank's Ross Sandler, Lloyd Walmsley, Deepak Mathivanan, and Kevin LaBuz

Google has been our top pick in 2015 and the deep over-sold conditions are starting to correct on another solid quarter. We think this could be the dawn of a new era for shareholders. Google is showing investors that its management team (even pre-Ruth Porat) cares deeply about its stock price and talent retention. We’ve long held that innovation is alive and well, and the narratives around irrelevance in mobile or share loss to FB that weighed on the multiple were somewhat misguided. ... Reiterate Buy. 

Cowen and Co.'s John Blackledge, Thomas Champion, and Nick Yako (price target raised to $775 from $693) 

GOOG reported solid 2Q15 results, US revenue growth accelerated driven by Mobile Search, YouTube and Ad Tech, EPS beat expectations. GOOG hit on two key drivers we highlighted pre-print, i) cost discipline as opex declined q/q and ii) capex declined 14% q/q. New CFO Porat was non-commital on capital return, but is off to a great start. 

Barclays's Paul Vogel, Mark Kelley, Michael Urciuoli, and Alex Klein (price target raised to $675 from $620) 

Heading into Google’s 2Q results, we believe investors were looking for three things, solid revenue, improving margins and positive commentary from new CFO Ruth Porat. From our perspective, they beat on all three metrics as revenue exceeded our expectations (up 13.3% on a net basis vs 11.4%), margins were better than expected (33.6% vs 30.8%), and we thought Ruth’s commentary was incrementally positive on top of mind issues such as balance sheet management, expense controls and growth projects.

Piper Jaffray's Gene Munster, Douglas Clinton, and Samuel Kemp (price target raised to $723 from $631)  

Google's Q215 earnings report and commentary leaving us feeling more confident in shares over the next two quarters. Aside from the expense focus largely talked about in the beginning of the week, Google highlighted two other important data points that helped to address previous investor concerns. First, the company noted that mobile CPCs were up and continued to close the gap on desktop. Second, it noted accelerating YouTube usage despite recent media coverage on Facebook Video growth.

Macquarie's Ben Schachter, John Merrick, and Tom White (price target raised to $750 from $570) 

The bottom line is that GOOG delivered better than expected numbers across the board, and the new CFO’s commentary around future cost controls, capex, capital allocation, and future disclosures were all encouraging. While we still have concerns about search disintermediation and AMZN’s competitive positioning, it is clear that GOOG can continue to grow revs in search, YouTube, and programmatic.

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