Sign InAlphabet Inc. Stock Analysis: Positive Growth Expected with Potential Short-Term Volatility
Summary
Alphabet Inc. shows positive growth potential with recent strategic steps in the technology sector, but potential short-term volatility should be considered, making a Hold recommendation for Alphabet Inc. stock as of July 5, 2023, while monitoring upcoming earnings announcement and regulatory news for more explicit direction. (July 5, 2023)
Company Overview and Recent Performance
Alphabet Inc. (GOOG) is currently listed on the NASDAQ exchange at a last closing price of $122.63 on July 5, 2023, showing an increase by $2.07 (1.72%) from its previous close. Its daily trading range was between a low price of $120.09 and a high price of $123.37. The company's outstanding shares are approximately 12.45 billion with an average trading volume of 25.62 million shares.
Stock and Market Snapshot
The company reached a year high of $129.55 and year low of $83.45 and is currently presenting a market capitalization of $1.50 trillion. On this particular date, the volume of Alphabet Inc.'s shares traded was 13.33 million, somewhat lower than its average volume. The stock is trading above its 50-day moving average of $118.64, and above the 200-day moving average of $102.60. Meanwhile, the RSI14 is at 46 which signifies a neutral position, being neither overbought nor oversold.
Financial and Fundamental Analysis
Alphabet Inc. has an earnings per share (EPS) of $4.56 and a price to earnings (PE) ratio of 26.49, suggesting a fair valuation compared to the average PE ratio of the market. The Return on Equity (ROE) is not disclosed here, which would have provided a thorough understanding of the company’s efficiency at generating profits.
Technical Indicators
Taking into consideration the MACD (3-month) which stands at -0.848704, the stock does demonstrate a bearish trend in the short term. This might be a cause for concern to potential buyers as negative MACD indicates downward price momentum. Although, the full evaluation of this technical indicator should also include Signal Line and MACD Histogram for a more comprehensive analysis.
Analyst Target Prices
Analysts have provided a high price target of $312 and a low target of $115, with a median target of $145, all substantially higher than the last close price, indicating a possible future increase. The consensus target is at $148.12.
Recent notable developments
Recently, Alphabet has announced a new initiative, Machine Unlearning Challenge. This initiative emphasizes the need for AI-systems to efficiently "forget" irrelevant or redundant information, reflecting Alphabet's proactive approach to addressing contemporary technological challenges. This could potentially position the company as a leader in generating more efficient AI systems, indicating potential future growth.
Outlook and Recommendation
Looking at Alphabet's performance, technical indicators, and its recent strategic steps in the technology sector, some positive growth can be anticipated. However, the MACD signal serves as an alert for potential short-term volatility.
Given the scale and consistency of Alphabet's operations and considering the current price is under most analyst's target price, the recommendation would be to "Hold" Alphabet Inc. stock as of July 5, 2023. Notwithstanding, potential investors are encouraged to closely monitor Alphabet's looming earnings announcement on July 24, 2023, and further regulatory news, which can provide more explicit direction related to the company’s performance.
