$Alphabet(GOOG)$ I am lowering

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$Alphabet(GOOG)$ I am lowering my estimates for Google stock. I no longer use a 23x earnings multiple for the advertising business. I now use an 18x earnings multiple, which would value that segment at around $108 per share. That places the fair value estimate at around $160 per share. I note that this low number may be deceiving because I expect Google Cloud to grow revenues at 25% and the advertising business to grow earnings at around 18% over the next few years. That means that at $160 per share, the stock might be priced to deliver 20% annual returns, which is arguably too high of a risk premium given the strong balance sheet.

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