Subject: Re: GOOG
With the capex program that they are looking at the net margins may be on a downtrend, so a move to valuing on a multiple of earnings (or smoothed earnings) may start to work better. This was always going to be the endpoint of their growth journey, so it's a matter of deciding if now is the time to make the switch.

Actually this is why I tend to use a "smoothed" average of Price to Earnings and Price to Sales, they seem to be able (historically) adjust margins almost at will, and when they are in heavy CapEx mode the stock will look expensive on a PE basis (but stable on a PS basis).

tecmo
...