Subject: Re: Earnings Preview
Hi Tecmo! Your name reminds me of Tecmo Superbowl on Nintendo. :) Fun game

Indeed!

A quick thought on your valuation comments: if growth stays so anemic as this hypothetical, then I think we'll see that multiplier come down below the 4.5x level instead of climbing back to 5.

One thing to remember is that GOOG has tremendous margins, and can swing them by reducing "other bets" investments. I think this essentially puts a floor of 4x on the revenue multiple. On the EPS side there is line of sight to $7.00 and even a multiple of 20x would get us to $140 / share.

That said, in the past both MSFT and AAPL have traded at very low valuations - so anything can happen.
tecmo
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