Shares of Google Inc. fell to the lowest levels in over a year, and were within reach of their first bear market in 3 ½ years, on the heels of some downbeat comments from Wall Street analysts.
Google’s Class A stock GOOGL, -0.73% slid 1.3% in afternoon trade Monday, putting it on track for a ninth loss in 10 sessions. The stock has lost 6.9% since the start of the year, and 19.1% since peaking at an all-time closing high of $610.68 on Feb. 26, 2014.
Many technical analysts define a bear market as a decline of 20% or more from a significant high. That means a close at or below $488.54 would trigger a new bear market for Google’s stock.
The last time Google’s stock suffered a bear-market decline was when it dove 21% from July 26, 2011 through Aug. 19, 2011.
Analyst Jay Srivatsa at Chardan Capital Markets listed the Internet search giant as one of the biggest “losers” of the 2015 Consumer Electronics Show in Las Vegas last week. The event had attracted more than 170,000 tech industry professionals, and 3,600 exhibitors, according to the Consumer Electronics Association, but no Google.
“With its Google Glass product simply not materializing [in 2014], Google, which stayed away from this show, may want to pay attention to competing solutions from the likes of Vuzix and major investments on wearables from the likes of Intel,” Srivatsa wrote in a note to clients. “Absent a major product announcement in 2015, Google may have to rely on its search business for a while.”
Separately, Cantor Fitzgerald analyst Youssef Squali said that because more than half of Google’s revenue is derived from its international business, the recent sharp rise in the value of the U.S. dollar has reduced overall fourth-quarter earnings by about 9 cents a share and sales by about $190 million, and could cause 2015 estimates to be lowered. Read more about dollar strength.
Meanwhile, Deutsche Bank analyst Ross Sandler came to Google’s defense, saying the stock remained his top idea among large-capitalization companies. He said the idea that Google is in trouble in the mobile arena was “flawed,” as mobile traffic-acquisition-cost payouts have been growing significantly and as the company has six of the seven apps that have been downloaded over 1 billion times.
Source : Marketwatch