Google Comp Values Facebook as $100 Stock: Nowack

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July 24 (Bloomberg) -- Brian Nowack, senior analyst at Susquehanna Financial, talks with Alix Steel about second-quarter results from Facebook, their growing ad dollar base and offers his thoughts on the company’s valuation and rising stock price. He speaks on “In The Loop.”

Financial group increased his price target on facebook to $84 a share.

We know the headlines.

The big number for facebook was the adjusted margins up to almost 68%. what makes you think they are sustainable?

Good morning, alix.

The advantage that facebook has is they continue to get a bigger share of advertising budgets from brands, small, medium sized businesses, direct response advertisers, and through their app installs.

What percentage of advertising dollar that flows through the ebitda are typically over 86% and that is what the company is benefiting from.

The company has a lot to integrate going forward based on acquisitions.

Does that put pressure on their bottom line margins?

It pressures them a bit, but as the advertising budget gets bigger, they can focus and still put up growth.

Who is facebook stealing advertising dollars from.

Google is still the master.

Is it google?

I do not think there are a lot of dollars moving out of google to facebook.

The other bases you see losses are from smaller online display players.

There are more dollars coming off line from print, moving to facebook.

There are some dollars on the margin moving out of television, but it is very small and most of it is this play and -- display and print.

The price-to-earnings ratio is almost double the industry average, but you made two upgrades, one in july, and one this morning.

Why do you think it is worth the price?

Ebitda is a cleaner number to value the company on an earnings at this point, and when you step back and say what kind of multiple should this company trade at, it is still growing topline at 60%. if you look at what google traded at when it was the size and growing this fast, it traded at 22 times ebitda.

If you really think that facebook should trade at the same people that google did at that point and its length, you would actually argue that it is a $100 stock.

That parallel to google gives people confidence there is still more runway for facebook.

Thank you.

A lot of jargon there with ebitda, but thank you to brian nowak.

U.s. carriers are resuming flights to israel after the faa lifted and almost two-day ban.

Let's get the details from elliott gotkine in tel aviv.

What will it take for airlines to fully implement their airline schedules to tel aviv?

Alix, we have heard from the american airlines in the last few minutes saying they are looking at the safety and

This text has been automatically generated. It may not be 100% accurate.


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