Google Stock Forecast 2023: Is it the Right Time to Buy?

Google Stock Forecast 2023: Is it the Right Time to Buy?

Google Stock Forecast: For the next 24 hours the momentum is Bullish and the recommendation is BUY.

Google Stock Forecast 2023: Google Stock Forecast for the next 12 months is $129


Latest Google Stock Price

The current macroeconomic scenario is in a bit of turmoil causing decreased demand for advertising. In this situation, Google is moving forward with its core goals to improve Search, Youtube, Hardware, AI, and Google Cloud as they want to be sure they are ready to tackle future obstacles. Right now, advertising revenues continue to contribute around 80% of Google revenues which can be a concern looking at the falling advertising demand.

Google Stock Forecast: Factors to look out for in 2023

  • Advertising Revenues: Advertising is at the core of all Google revenues which in turn makes it a safe investment till the time this monopoly is untouched. Google uses this revenue to invest in projects that can turn into a future profit source. It enables the business to assume enormous risks that other businesses in the world cannot even think about.
    • Google has struggled t this year as firms are very cutting down on advertising spending in this uncertain environment.
    • With the continuously rising interest rates, we are likely to see even softer ad demand in the coming future
    • YouTube Shorts monetization appears to be accelerating. YouTube Shorts have been monetized since September, and the creator income share scheme will begin in 2023. More than 700 million hours of YouTube material are seen every day, and the platform continues to overtake linear TV in popularity.
  • Google Cloud: The long-term trend of cloud adoption is something that Google is capitalizing on now with its Google Cloud services showing  38% of year-on-year growth after recovering from the last quarter. In Q3 of 2022, it accounted for $7B in revenues for Google. Google also announced many products in Google Cloud Next 2022 and partnered with Coinbase, Toyota, etc even better. Since other major cloud providers like Microsoft and Amazon faltered in the most recent quarter, Google Cloud’s strong momentum demonstrates the company is moving in the right direction.
  • Search Engines being replaced by Mobile Applications: The majority of Google’s ad revenue is produced through conventional search engines or the old-fashioned web browser. Google loses out every time a mobile user chooses to utilize an app over a search engine. Smartphones can search for restaurants, travel, and other services without using Google.com. Previously, Google served as the gatekeeper, but now mobile users can enter through a large new entrance.
  • Android OS: Although it can compete, Google does not have the same lopsided edge against Apple and Facebook as it did over Yahoo or Bing. If Google cannot generate additional sources of revenue, stockholders will soon feel this stress.

Google Stock Forecast: Technical Analysis

Looking at the 4-hour charts of GOOG, we can see that Google’s stock price created a double high at $102.53 and both time retreated.

On the chart below it is clear that the 200-day moving average (Red line) crossed the 30-day moving average (blue lune) from above and the price retreat happened as Google entered the bearish zone. The stock has seen a good rejection from its Daily 200 Moving Average at $101.52.

Google’s stock price is currently trading below the 200-day moving average and above the 30-day moving average. The first level of support for Google stock lies at $95.66 and the resistance is at $105.03. If Google breaches this support level the price may rise over $110 facing resistance at $113.02.

The pivot is at $113.82 and for Google’s stock price to enter the bullish zone, it will have to break above this pivot.

Buyers and long-term investors can only get interested after the break of the trendline on the upside with the crossing of the 200 Moving Average which can trigger a bull run in the stock.

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Google Stock Technical Analysis (RSI)

The RSI below shows that Google is following the bullish trend and is predicted to remain bullish. The 7 hour RSI is higher than the 30-day moving average.

The stock is oversold and price will remain bullish before it reaches the saturation and fall started.

The current momentum is bullish and our recommendation is BUY.

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Other than that, sellers can short the stock right on the trendline with a small stop loss to continue trailing the stock or enter on the break of $83. So far down from the highs, RSI still indicates normal behavior for the stock which is a bit concerning and bearish.

Google Stock Forecast: Analyst Ratings for the next 12 months 

Average GOOG Stock Forecast for the next 12 Months$129
JP Morgan Chase & Co.$115
Credit Suisse Group$128
Cowen$135
Barclays$150
Raymond James$120

Google Stock Forecast: Q3 2022 Results

  • The total revenue of the company stands at $68.45B with a YoY of 5.22%. This has been the case since the last two quarters for google where the revenue has struggled to increase significantly.
  • The Earnings per Share stood at 1.07 with a YoY of -24.86%. The YoY rate of EPS has been falling for google for the last three quarters with revenues for this quarter at record lows since 2021.
  • The Free Cash flows for the company stand at $16.08B with a YoY of -14.18%. This has been the case since the start of the 2022 fiscal that Google is trying to save up more cash for the upcoming times and are increasing its cash balances.
  • The segment revenue details show that Google Advertising (Google Search, Youtube Ads, Google Network) contributed to 80% of the revenues of Google at $54.4B. Google Cloud contributed $7B to the revenues which is an increase of $2B YoY.
  • The reliance on Advertising is nowhere near to slowing down for google which could pose some serious problems far in the future.

Google Stock Forecast: Valuations

Google has the highest P/S ratio of 4.0x when compared to Meta Platforms and Amazon, which are both search titans in their own right. Currently, Google is at a PE of 19.3 with an EPS of 4.7 which translates to a price of $91 as compared to where Google is right now i.e, $98. Google is also anticipated to produce $5.43 in EPS during the fiscal year 2023, translating to a P/E ratio of 17.7 X. Depending on how harsh the upcoming recession can be, Google’s earnings are at risk.

Due to those factors, Google’s stock may see short-term pressure and retest its most recent low of $83.45.Investors will be willing to pay a 13-14x P/E ratio for GOOG, which translates to a price range of $70-76 which is when the advertising demands would bottom out. This means that Google revenues will be at their lowest and the stock will be undervalued then and hence would be a great buy.

Google Stock Forecast: Ratios

  • P/E ratio –  19.32

This ratio compares a company’s share price to its earnings per share. This PE is at an all-time low for Google since 2015 which means that the company is undervalued right now. The forward PE of google is around 18 which means that the company is going to get more undervalued in the coming times which can create a good buying price for the stock.

  • Price to Cashflow – 14.47

It compares a company’s market value to its operating cash flow and the lower it is, the more undervalued a stock is. Looking at the historical ratio of Google in Price to cash flow, we can say that right now it is very low as compared to where it was in 2021 (19.3).

  • Price to book ratio – 4.92

It is used to compare a firm’s market capitalisation to its book value. P/B ratios under 1 are the ones that attract most of the value investors. There is also some gap between ROE (26.89%) and this ratio for Google which is going in line with how both these ratios are coming down along with the price.

  • EV/EBITDA – 13.48

This measure is used to determine the value of a company. The best use of this ratio happens when it is compared with the industry average. It values the company, debt included, to the company’s cash earnings less non-cash expenses. Here the IT sector has a ratio of 15 and Google is at 13.48 which means it is not exactly as undervalued as the price tells us.

  • Return on Capital Employed – 24.33%

This percentage is used to check the company’s capital efficiency and profitability. It can simply be interpreted as a higher value means higher the company’s profitability. In this case, Google’s ROCE has kept on decreasing since 2021 but has not taken that major a hit.

Google Stock Forecast Today

Overall OutlookPartially Positive
1. Market's WisdomPositive
1a. Market DataPartially Positive
1b. Technical RecommendationBuy
2. Crowd's WisdomNeutral
2a. Social Media BuzzNeutral
2b. Social Media SentimentNeutral

Google Stock Forecast: Conclusion

The company will have to maintain strong fundamentals in this environment and invest in artificial intelligence and machine learning skills so as to continue to maintain the finest position in the Internet industry. This brings us to the point that Google will be at its best price on the day when the advertising demands in the globe bottom out which will directly imply Google revenues bottoming out. This will bring out the best value of Google for investors. Right now, platforms like Meta, TikTok, and Twitch are gathering a lot of consumers’ attention which might bring a shift in where the advertising market will go to in the coming future if google remains stringent in bringing any improvisation in its own platform.

However, because of the dominance of its search business and substantial cash holdings, the company continues to be wary of the uncertain macroeconomic times which will affect them and hence is trying to be ready to face them which makes Google a safe bet in the current scenario.

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

Mayank Kumar

Mayank Kumar

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