Sign InAlphabet Inc's Fundamental & Technical Analysis Points to Potential Growth
Summary
Alphabet Inc.'s stock shows potential for growth in the future, indicating a Buy evaluation, as indicated by factors such as the PE ratio, EPS, and DCF, along with an oversold RSI and positive MACD; however, investors should monitor recent news developments regarding the company's AI regulations talks with the EU and adherence to advertising guidelines.
Fundamental Analysis
Alphabet Inc. (NASDAQ: GOOGL) closed on June 27, 2023 at a price of $118.33, slightly down by -0.01%. The company's market capitalization stands at approximately $1.51 trillion, which portrays the size and reliability of the company in the market.
In terms of profitability, Alphabet's Earnings Per Share (EPS) is $4.56 and it operates with a Price to Earnings (PE) ratio of 25.95. Considering the PE ratio, the stock's current price does not seem inflated compared to its earnings. With the EPS in mind, the company does show a strong profitability per share leading to shareholder value.
Notably, Alphabet has handled a significant amount of trading volume – about 36.23 million on the last trading day, which is slightly above its average volume of 33.74 million. This suggests a high level of investor interest in the company.
Regarding Alphabet's future prospects, their next earnings announcement is slated for July 24, 2023. Their discounted cash flow (DCF) is approximately $120.00, suggesting the potential for an upward trend in the coming days.
Technical Analysis
Alphabet's Relative Strength Index (RSI14) stands at 28, suggesting the stock might be in an oversold territory. Thus, it might experience a bounce back in the short term.
The Moving Average Convergence Divergence (MACD) of 0.64 for the last three months represents a bullish trend. Furthermore, Alphabet's stock price stands above both its 50-day moving average (116.26) and 200-day moving average (101.65), signaling an upward trend for the stock.
In terms of the target price, a consensus target of $138.98 was established, with a high estimate of $190 and a low of $114. This offers potential upside from the current trading price.
News Impact
Recent news points towards Google holding productive talks with EU on AI regulations, indicating growth in their cloud services. This development can potentially improve Alphabet's services to their customers. Concurrently, the company reportedly did not fully adhere to its advertising guidelines – an issue that may require immediate resolution to sustain good client relations.
Additionally, Alphabet is making strategic moves by cutting jobs at its mapping app, Waze to consolidate its mapping services. While it may draw some negative press in the short term, in the long run, it could enhance operational efficiency and profitability.
Stock Prediction and Final Evaluation
Combining the technical and fundamental assessments and the recent news, Alphabet's stock shows potential for growth in the future. Investors might anticipate the price going up, potentially reaching the moving average of $120 in the next trading day and going towards the consensus target of $138.98 in the coming week.
Based on these factors, the evaluation for Alphabet's stock would be a "Buy." The potential growth indicated by the PE ratio, EPS and the DCF point towards a bullish trend. Furthermore, the oversold RSI and positive MACD further affirm this prediction.
However, investors are recommended to keep an eye on the impact of the events addressed in recent news, such as the company's dialogues with the EU and how Alphabet handles the advertising guidelines issue.
Remember that markets are subject to a multitude of unpredictable factors; this analysis should form only a part of an informed investment decision.
