Alphabet Inc. (GOOGL) Shows Strong Technical and Fundamental Growth Amid Legal Challenges, 1 month ago

Google Technical Analysis

Alphabet Inc. (GOOGL) closed at $173.79 on June 04, 2024, reflecting a 0.36% increase. The stock experienced a daily low of $171.89 and a high of $173.85. Notably, GOOGL is nearing its yearly high of $178.77 and is well above the yearly low of $115.35, underscoring strong incremental growth.

The Relative Strength Index (RSI14) stands at 58, which suggests the stock is neither overbought nor oversold. The 50-day and 200-day moving averages are $163.83 and $143.90, respectively, indicating a solid upward trend, further evidenced by the positive Moving Average Convergence Divergence (MACD) of 4.67. The Average True Range (ATR) at approximately 1.93 highlights moderate volatility. Support and resistance levels are identified at $171.95 and $174.18, respectively. With high recent trading volumes mirroring its robust average volume, it appears the market holds sustain interest in GOOGL.

Fundamental Analysis

At a current Price-to-Earnings (PE) ratio of 26.77 and an Earnings Per Share (EPS) of 6.52, Alphabet's valuation reflects healthy earnings relative to its share price. The company's market capitalization stands at $2.16 trillion, showcasing its dominant industry positioning.

Despite the recent legal challenges, including a £13.6 billion ($17.2 billion) lawsuit over advertising practices in the UK, Alphabet's strategic leadership changes could enhance its financial oversight and potentially augment its technological and market innovations. The recent appointment of Anat Ashkenazi as CFO from Eli Lilly exemplifies the company’s proactive stance in acquiring top-tier talent.

The Discounted Cash Flow (DCF) valuation places the intrinsic value at $199.40, suggesting the stock may currently be undervalued at its closing price. Analysts' consensus reflects robust optimism, predominantly placing the stock as a 'Buy', with one strong buy, 33 buy, five hold, zero sell, and zero strong sell ratings.

Google Short-term Performance Prediction (Next Trading Day and Upcoming Week)

For the next trading day (June 05, 2024), GOOGL may exhibit slight upward momentum driven by recent positive changes in management. The ATR suggests a potential daily fluctuation range of approximately $1.93.

Over the upcoming week, market reactions to ongoing legal news could bring uncertainty; however, the appointment of a new CFO and strong market positioning in AI could anchor the stock’s stability and marginally increase investor sentiment.

Intrinsic Value and Long-term Investment Potential

GOOGL's DCF-derived intrinsic value of $199.40 indicates significant long-term upside potential from the current price. Its pioneering role in AI and search technology, coupled with a robust financial base and strategic expansion, positions Alphabet for sustained growth over the long term.

Overall Evaluation

Categorizing GOOGL as a 'Buy' candidate is substantiated by the stock's strong upward trend, favorable analyst consensus, and intrinsic valuation exceeding current market price. Alphabet's resilience amidst legal scrutiny, alongside forward-looking management appointments and a commanding market footprint in AI and search technology, bolster its long-term growth trajectory.

Check full Google forecast and analysis here.