Google Inc (GOOG): Is It Undervalued?

Google Inc (GOOG): Is It Undervalued?
<a href="">WDnetStudio</a> / Pixabay

Google is one of the most trusted companies and has always been so, but still it is undervalued, says a report from Forbes by Gene Marcial. It is the largest internet company dealing in search and advertising and often known as a tech wonder. However, investors have lately become reluctant to invest in the technology sector, including in tech leaders Apple, Facebook, Amazon and Google.

Opportunity for investors

Despite being ignored by many, the fact remains that these four tech stocks are among the most traded. Among the four, Google is the one facing maximum dissatisfaction from investors as the EC reprimands its alleged antitrust violations. The internet giant is dropping due to such concerns, and as a result is becoming even more attractive for investors waiting for some correction to make an entry at the right point, says the report.

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As per Marcial, bears are now sensing an opportunity in Google as it is facing many challenges such as Europe’s decision of restricting Google’s service, currency impacts on revenue, and earnings growth, increasing competition and rising capital spending. However, there are analysts who believe that previously Google resolved the antitrust issues and will again respond to them aptly.

Analysts bullish on Google

“Google remains one of the more attractive investment opportunities in the technology sector,” says Morningstar’s analyst Rick Summer. The analyst is valuing Google at $175 per share, which is the fair value at this time. Summer mentioned in his report that Google has launched the Project Fi, a new wireless service in the U.S. that will offer mobile voice, messaging and data services. He noted that although the service is unavailable to the masses, it could increase consumer expectations for pervasive broadband connectivity and cheaper pricing. This will move forward mobile data usage where Google and large ad-supported internet players could benefit, noted the analyst.

Kerry Rice, Internet and digital media analyst at investment firm Needham, maintained a Buy rating on the stock, suggesting that other than the foreign exchange problem, the company exhibits a strong core website business which is increasing on the back of mobile search, display and the Play Store.

On Wednesday, Google shares closed down 0.53% at $561.39.

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