Watch Google (GOOG) Go To $250

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Google (GOOG) hit another 52-week low today bottoming at $348.23. So far this year, shares in the big search company are off 45%. By contrast, Time Warner (TWX) is down a little more than 30%. So is Yahoo! (YHOO). Google should be doing better than an "old media’ shop that owns AOL and a failing portal run by a disgraced CEO.

Google is going lower, perhaps by a lot. Analysts’ estimates from First Call have the search company’s earnings at $4.82 for this quarter and $5.26 in Q4. Both quarters assume revenue growth of well over 30% Analysts also expect sales growth of 25% in 2009.

If Google misses it Q3 numbers, which the current advertising and economic climate could certainly cause, Wall St. is going to chop the future numbers down. Even with concerns mounting about Google’s ability to grow at breakneck speed, the average price target of 29 analysts who cover the stock is $600.

Google still has a rich price-to-sales ratio of 6x. It is a premium based on the belief that the company will continue hypergrowth even as its revenue gets larger. Yahoo!’s price-to-sales number is below 3x. At most large tradition media companies, the figure is below 1x sales.

Google does not have to fall far enough to match Yahoo!’s valuation. If it simply falls to 5x sales, the stock is below $290. Investor despair will drop it further.

Douglas A. McIntyre