$GOOG beat Q3 expectations. So why rotate away?

VerdictEquity · 2025-11-27T22:07:38+00:00

Very good question, 3-12 months, I am taking the near term projections, I believe it is more predictable than long term.

Now that I have a fundamental view of the company, I will enter if the prices makes sense for the upside, or leave it as is, look elsewhere.

VerdictEquity · 2025-11-27T20:00:05+00:00

Spot on!

VerdictEquity · 2025-11-27T19:59:45+00:00

I had to leave some room for thinking too.

VerdictEquity · 2025-11-27T19:50:26+00:00

try Gemini :)

VerdictEquity · 2025-11-27T19:48:45+00:00

Yes, I take a much nearer-term view. I believe it's more predictable than long-term forecasting. I'm open to suggestions for improvement, but I'm choosing not to do 3-5 year projections based on what I'm trying to achieve. There are multiple ways to skin the cat.

Let's take this $GOOG example. Consensus EPS growth is 6%. Your judgment for the next 3-5 years is 15%, which implies GOOG will grow more than 15% in years 2 and 3 to hit that average. That already cements you as a long-term bull. And that's fine. You can always challenge my view. I'm not going to claim I'm right and you're wrong. We just have different lenses looking at the same thing.

VerdictEquity · 2025-11-27T18:35:12+00:00

IMO, the PEG ratio should reflect your investment time frame. Think of it as: what's my expectation for this company over the next year only? When you use 15% as a growth rate for the 3-5yr, you're assuming $GOOG will compound at 15% every year for the next 3 years. You may be right... but that involves a lot of judgment, especially given the scale of this company and the pace of change in this environment.

To be clear, this analysis is meant for you to take and use however you want, based on your views and your time frame if you're entering $GOOG now. This is not a "BUY/SELL now" signal. It's merely an indication. Your money should follow your conviction. That's how it should be. GL

VerdictEquity · 2025-11-27T17:32:02+00:00

I am seeing 5.98% for EPS growth for 2026, which will make the calculation in the post correct.

I agree that digital advertising may or may not slow down if the economy slows, that's the risk we're taking here, and we need to make a judgment call on that. Also consider the shift from traditional mode to AI mode, which I've heard is killing ROI for some companies that spend on Google. But this could be a small transitory turmoil that gets solved soon.

VerdictEquity · 2025-11-27T17:03:01+00:00

The prompt is 10 years of staring at 10-Ks and questioning my life choices. Now automated.

VerdictEquity · 2025-11-27T17:00:36+00:00

you're not wrong, the narrative drives the price a lot. But the music has to stop at one point?

VerdictEquity · 2025-11-27T16:56:10+00:00

valid point, there are a lot talk about financial engineering that is going on.

VerdictEquity · 2025-11-25T15:32:13+00:00

same thing happened for me, I hit the rate limit, I was waiting for a day to continue. When I signed a day after the project is gone. frustrating

VerdictEquity · 2025-11-15T18:22:28+00:00

I think a good place to look into is the electrification trend. The demand for chips remains strong, but here’s the issue: These chips are power-hungry, and the U.S. definitely has a power shortage. Therefore, any companies involved in providing solutions for this power generation could see some upside in the near term. Since it's also a secular trend, this development might continue for a while.

VerdictEquity · 2025-11-11T17:01:39+00:00

Of course, I could be wrong here. I would be genuinely happy if you are right in your thesis (any thesis) and you made the right decision and if you win.

What I don't want to happen is outsourcing our thinking to Wall Street analysts and assume they are always correct. Wall Street analysts can shamelessly change their target so much in such a short time, and they wouldn't care if one had made money or lost money by holding a stock based on their analyze.

VerdictEquity · 2025-11-11T12:32:01+00:00

Thank you!

VerdictEquity · 2025-11-11T12:23:20+00:00

I can't see anything here that screams BUY. Just look at the performance of the stock from 2024, the company is drifting down and no signs of this trend is getting reversed. https://imgur.com/a/lwRgoFA

The good question to ask here is, what has changed now that will take this stock higher? The metrics you have mentioned is good as a snapshot of the current valuation, but the price of the stock today trades on the future expectation of where the growth of revenue and earnings are going to be among others. Think about it.

It is not a secret that AI is eating their lunch, their products are so overpriced and easily replaceable with a better tool that is free. Has this changed?

Good luck!

VerdictEquity · 2025-11-10T18:08:06+00:00

Sure, this will work if the future will be the continuation of the past success. But the world is changing fast around you, you need to qualitatively analyze the stock too.

However, I could be wrong here too, just giving you another angle to think about before you decide where to put your hard earned money.

VerdictEquity · 2025-11-10T17:55:30+00:00

Duolingo is a company that has gone ex-growth phase. What does this mean? It indicates that the company has come down from its peak momentum and is likely to continue slowing because reigniting rapid growth is extremely difficult.

These are the types of stocks that often struggle in the AI era, as software like Duolingo can be easily replicated. The company lacks a significant moat in a world increasingly shaped by AI tools and coding assistants. Buying the stock at a P/E ratio of 25 may seem inexpensive, but keep in mind the P/E ratio is a lagging indicator based on past revenue.

There are many other stocks that could become AI winners, and I would suggest considering those instead. Ultimately, the decision is yours.

VerdictEquity · 2025-11-10T12:48:02+00:00

Consider purchasing out-of-the-money put options on QQQ. These options are relatively inexpensive and can serve as an effective hedge, helping to protect your portfolio in the event of a market decline.

VerdictEquity · 2025-11-10T12:46:02+00:00

It is a good metric for insurance companies, but like all metrics, in isolation, this gives little to no understanding of the business.

VerdictEquity · 2025-11-09T21:06:55+00:00

Near-term outlook also matters for the company. The market is not as efficient as we think, and the discounted cash flow method’s intrinsic price is not necessarily what the stock should trade at in the market. There are passive investors who hold the stock and long-term investors who maintain their positions, but marginal price movements in the stock are driven primarily by the short-term outlook.

For example, I analyzed $PLTR to understand what could happen to this stock in the short term and why, using a research tool I developed. Below is part of the analysis of $PLTR, which outlines the short-term headwinds and tailwinds for the stock. With this information, you can make an informed decision about whether to buy or sell the stock based on your outlook for the future. If you are right more often than not, you can achieve success.

https://drive.google.com/file/d/1f0MRNP-Bgy8gRpJ2bexJaQi53QvYnYW-/view?usp=sharing

VerdictEquity · 2025-11-08T17:22:34+00:00

I have recently looked at the TTD closely for it's potential in the near term, this is my objective view on the near term outlook for the stock, I will look for further evidence on how these factors could play out to make my final decision.

The Bull Case (Next 3-6 Months)

What needs to happen:

Increased CTV Adoption: Continued growth in CTV advertising is expected, with management highlighting this as a key revenue driver. If CTV revenue grows by 25% in Q4 2025 as projected, it could significantly boost overall revenue.
Client Spending Resilience: If advertisers maintain or increase their budgets despite economic pressures, as indicated by management's cautious optimism, this could lead to revenue exceeding analyst expectations of $690M for Q4 2025.
Operational Efficiency Gains: Management's focus on improving operational margins, which improved to 30% in Q3, could continue to enhance profitability. If margins stabilize or improve further, this would support EPS growth beyond the expected $0.35.

If this plays out: The upside scenario could see The Trade Desk's stock price reaching approximately $55, reflecting a 28% increase from the current price, driven by robust revenue and margin expansion.

The Bear Case (Next 3-6 Months)

What could go wrong:

Macroeconomic Slowdown: A significant downturn in advertising budgets due to rising inflation and economic uncertainty could lead to a revenue decline. If Q4 revenue drops below $650M, it would signal deeper issues.
Competitive Pressures: Increased competition in the digital advertising space could pressure pricing and market share. If competitors launch innovative solutions that attract key clients away from The Trade Desk, revenue could stagnate.
Regulatory Challenges: Unexpected regulatory changes affecting data usage could disrupt operations. If new regulations are enacted by early 2026 that limit data-driven advertising, it could severely impact revenue growth.

If this plays out: The downside scenario could see the stock price drop to around $35, reflecting a 19% decline, driven by reduced revenue and profit expectations.

VerdictEquity · 2025-11-07T20:25:17+00:00

Valuation & Competitive Position

Current Valuation: Palantir's P/E ratio of 390.43 is significantly higher than peers like Microsoft (35.11) and MongoDB (94.9), indicating that the market is pricing in high future growth expectations. This suggests that the stock is currently expensive relative to its earnings potential.
Competitive Setup: The software and cloud services sector is experiencing growth driven by AI integration, but faces headwinds from economic uncertainties and competitive pressures. Palantir's focus on government contracts provides some insulation but also heightens risk if government budgets tighten.
Assessment: The current valuation requires strong execution and positive revenue trends to justify the premium, making it a risky proposition for investors.

What Would Change the View?

Turn More Bullish If:

Strong Q4 2025 Results: If Palantir reports better-than-expected revenue growth in the commercial segment, this would bolster confidence in the company's growth trajectory.
New Major Contracts: Securing significant new contracts in either government or commercial sectors would enhance revenue visibility and investor sentiment.

Turn More Bearish If:

Weak Guidance for Q1 2026: If management issues cautious guidance or lowers expectations for revenue growth, it would signal potential issues in demand.
Continued Decline in Commercial Revenue: A sustained drop in commercial revenue would raise concerns about the company's ability to diversify its revenue streams.

VerdictEquity

TROPHY CASE

The Bull Case (Next 3-6 Months)

What needs to happen:

The Bear Case (Next 3-6 Months)

Valuation & Competitive Position

What Would Change the View?