The Internet's ruling triumvirate has a big week: Yahoo! reports quarterly earnings Tuesday, eBay reports on Wednesday and Google on Thursday. What should cyber-stock investors expect? Mark Mahaney, Citigroup's Internet research director, and Scott Kessler, the director of Standard & Poor's information technology research group, gave "Morning Call" their views.
According to Mahaney, many Web stocks are undervalued. He says there could be at least 10% upside for eBay and Yahoo! stocks. But the "most interesting" story may be Google: He says the search engine firm could have 20% to 25% upside. Google shares are currently trading close to its growth rate -- at roughly the same "entry point" as eBay last year.
One stock to possibly avoid: the "overvalued" Amazon.com, Mahaney says.
Kessler agrees that Google has "a lot of good things going for them" -- but fears trouble from certain "issues," including massive stock option expenses and questions surrounding Google's YouTube and "other content." Kessler's price target for Google is $525, as compared with Mahaney's $600 target.