Alphabet’s YouTube ‘an under-appreciated asset,’ says MoffettNathanson

MoffettNathanson analyst Michael Nathanson makes the case that Alphabet’s YouTube is “an under-appreciated asset that is sitting in pole position as the media industry continues to be disrupted,” arguing that YouTube is positioned to continue benefitting from consumer and advertiser adoption of short-form video, the growth of virtual virtual multichannel video programming distributors, or vMVPDs, and its “likely emergence as a key gatekeeper” in distributing streaming channels. The firm, which forecasts YouTube revenues to grow at a 17% compound annual growth rate from 2022 to 2026 to reach nearly $73B with “profit margins, perhaps, in the low teens,” thinks the business could be worth over $240B as a stand-alone asset. MoffettNathanson reiterates an Outperform rating and $145 price target on Alphabet shares.