Excluding Cash, Google Is Now More Valuable Than Apple

Ashraf Eassa:

To put this in perspective, Apple trades at 7.7× EV/FCF while Google trades at 30.3× EV/FCF. Now, Google and Apple aren’t exactly operating in the same businesses, and frankly, Google’s business is “safer” than Apple’s, but this valuation gap is pretty ridiculous and indicative of one thing: the market expects Google’s free cash flow to grow “to da moon” and Apple’s to, at some point, crater as a result of competitive pressures of secular headwinds.

I don’t know that anyone’s business is ever “safe” in technology. And Google isn’t making nearly as much from mobile advertising as they do from desktop browsers. I think the market has this wrong.

★ Thursday, 13 February 2014