One incremental data-point we highlight in the month's review of data relates to US consumption as a percentage of YouTube's global total. We estimate that the US accounts for approximately 15% of total YouTube activity, although the US probably accounts for around half of the service's global revenue, which in turn is probably around half of the world's digital video ad spending outside of China.
Additional detail and data follows in this note.
VALUATION. We value Alphabet on a DCF basis. Our valuation incorporates a long-term 5.5% growth rate, a short-term 8.7% discount rate and a 11.7% long-term discount rate. Our price target on Alphabet remains at $1040 and we continue to rate the stock Hold.
RISKS. Core risks for web publishers relate to: 1) high degree of rivalry in lieu of barriers preventing competition from emerging 2) high and increasing capital needs to remain and 3) government regulations and consumer pushback related to data management and privacy.
FULL REPORT INCLUDING RISKS AND DISCLOSURES CAN BE FOUND HERE: GOOGL 4-11-18.pdf
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