Sign InAlphabet Inc.: Fundamental Analysis, Technical Analysis, News Analysis, Predictions, and Evaluation
Summary
Alphabet Inc. (GOOGL) is currently facing a significant decrease in stock price and negative investor sentiment; however, the company remains fundamentally strong and may present a buying opportunity for long-term investors due to its promising long-term uptrend, according to an analysis from October 25, 2023.
Fundamental Analysis
Alphabet Inc., trading under the ticker GOOGL, is currently priced at 125.61 USD. This marks a significant decrease of 13.20 (-9.51%) from the previous close. This is a low point for the company's share price as it stands at the low for the previous trading day at 125.07 while falling well short of the high at 128.2. Over the year, the stock has fluctuated between a low of 83.34 and high of 141.22.
Looking at Alphabet's fundamentals, the company's market capitalization stands at roughly 1.58 trillion USD with a significant trading volume of 83.55 million shares compared to the average volume of 26.27 million shares. The apparent sell-off has pushed the RSI14 to 35, indicating a potentially oversold condition.
Alphabet's EPS stands at 4.76, and the company has a P/E ratio of 26.39. Although the P/E ratio is relatively high, this is not uncommon for technology companies and may be indicative of investors' expectations for future earnings growth. The company has 12.57 billion shares outstanding. Based on Discounted Cash Flow, the price estimation for the shares stands at 127.27 USD.
Taking a look at the analysts' consensus, Alphabet's stock is currently rated as "Buy" with 33 buy recommendations, 2 hold recommendations, and 1 sell recommendation. Furthermore, the target prices defined by analysts range from a low of 59 USD to a high of 210 USD, with a consensus at around 141.26 USD, indicating a potential upside to the current stock price.
Technical Analysis
Alphabet's technical analysis reveals a 50-day moving average of 134.45, marking it above the present market price, suggesting a bearish trend in the short term. The 200-day moving average stands at 116.08, which indicates a bullish trend over the long term. The MACD (3-month) of 2.14 further confirms this short-term bearish trend.
The major point of resistance now sits at 129.27, and there is no clearly defined support, hinting at potential further price drops. The high volatility, indicated by the ATR of 2.94, also leads to the conclusion that the stock might be a riskier asset in the short term.
News Analysis
Alphabet was negatively affected by several recent events. The Company's decision to cut 12,000 jobs, making up 6% of the total workforce, was not received well by the market, leading to a notable sell-off. Supplemented by missed cloud revenue estimates and a downward pressure on tech stocks as signaled by rising treasury yields, the price drop was significant.
Predictions and Evaluation
The current bearish movements are significant and will most likely continue in the short term. Based on the strong bearish momentum and negative investor sentiment, the stock price may drop further in the next trading day, October 26, 2023. However, over the upcoming week, considering the oversold RSI and fundamentally strong nature of Alphabet, a slight correction could be expected.
Given the present scenario, medium to long-term investors might consider this an opportunity to buy as it is a strong company fundamentally and the current price is below the 50-day and 200-day moving averages. However, short-term traders should be cautious due to the high volatility and negative news.
Final Evaluation
Despite the recent woes of Alphabet Inc., the company remains fundamentally solid with a promising long-term uptrend. Considering the current oversold condition, potentially undervalued price according to the DCF, and positive long-term technical indicators, Alphabet Inc. can be classified as a "Buy" for long-term investors. However, short-term traders should keep an eye on the market movements before making decisions.
