Shares of Internet search giant Googlehave surged 33 percent in the past three months. That’s better than Apple’s18 percent gain.
At least one analyst thinks Google is only just hitting its stride and sees the stock hitting $860 a share, implying another 10 percent upside yet to come.
Ken Sena, Evercore Partners’ Internet analyst, has an “overweight” recommendation on Google and says it’s valuation is “not unreasonable.” The stock trades at about 22 times earnings.
“When you look at product rollouts, Google is hitting its stride,” he toldCNBC’s “Squawk on the Street,” while noting that “the fundamental story within its core search product still shows a fairly big runway.”
“Within product search, they’re requiring small and medium merchants to sign up for Ad Word accounts,” he said. “And that will benefit them in terms of getting more information on merchants and making sure listings are more updated and providing a better overall experience for consumers.”
There’s also opportunity for higher clicks and better pricing.
“Looking at supply shortages that Google currently faces on some of its leading key words, what we argue is that through increasing the amount of clicks on the consumer side, Google can actually optimize better between supply and demand and leave less money on the table with marketers,” Sena said.
Unchallenged in search, Google has also been able to beat back threats from Apple in maps and Facebook in social media.
Mobile has also become more friend than foe for Google. “When they move horizontally toward merchants and toward consumers, as that platform starts to strengthen — and you’re seeing that in the product search category — it will dovetail nicely with what they are doing on the mobile side,” Sena said.
All that leaves Sena “still excited about the stock.”
—By CNBC.com’s Justin Menza
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Sena and Evercore had no reported conflicts.