S&P Capital IQ Analyst: Google Is A 'Pretty Nice' Value Opportunity

Shares of Google Inc (NASDAQ: GOOGL)(NASDAQ: GOOG) opened gap-down Thursday amid back-to-back bad news. Stifel downgraded Google from Buy to Hold and Bloomberg published a report highlighting how the search engine giant is losing its market dominance.

However, not everyone on the Street has given up on Google. Scott Kessler from S&P Capital IQ was on CNBC to discuss what makes Google a great buy right now.

Related Link: Why Google Could Be In 'Danger Of Taking A Major Leg Down'

Ratings Aren't Straight Forward

Kessler began by stating that the situation deserves to be further analyzed, “Well, I think we have to kind of parse that [Stifel’s downgrade].”

“So, in terms of from a company perspective, I think it’s fair to say that Google faces pretty significant challenges and headwinds right now. In terms of the stock, I mean, the shares had a pretty difficult 2014, given that the stock was actually down last year in an up market with a lot of internet stocks performing pretty well,” he continued.

“We actually see Google as a pretty nice value opportunity right here and we have a Strong Buy recommendation on the shares.”

Why Is Google A Buy?

When asked why he sees Google as a buying opportunity right now when the company’s shares underperformed in an up market last year, Kessler replied, “So I was always taught that you buy low and sell high. So, our view at this stage is [...] people are obviously concerned; they have seen a number of these kind of developments or speculative updates.”

“The stock has obviously not reacted well and people now are kind of re-evaluating Google.”

Bottom Line

He continued, “The reality is: you highlighted a couple of hundred basis points narrowing in market share, but Google still -- according to the data you referenced -- has three quarters of the market.”

“This sounds somewhat like a minor issue that’s being exaggerated with a significant decline in the stock right now.”