Google's (NASDAQ: GOOGL) stock has dropped about 5% over the last 12 months due to missing earnings expectations for the last eight out of ten quarters. Investors' concern of increased digital advertising competition from Apple (NASDAQ: AAPL) and Facebook (NASDAQ: FB) have also hindered Google shares, in addition to the uncertainty surrounding Apple renewing its search-engine contract with Google as its default web browser on Apple IOS devices. The contract is expiring this year, and rumors have been circulating that Apple will not renew its contract with Google. This would mark the second time this happened to Google in less than a year as Mozilla Fox Fire ended Google's tenure as its default search engine in November and replaced it with Yahoo, signing a 5-year deal.

Many had also speculated that Google could end up with over $80 billion in cash and marketable securities by the end of 2015, thus beginning a new dividend plan for investors. In response to this, Google's CFO Patrick Pichette stated in the company's fourth quarter 2014 conference call, “Share price does matter. It matters to our board, it matters to all of us, we are all shareholders in the company.” With that said, no new dividend plan was announced and investors fear they will not get cash back at all.

Despite this, a few analysts are still bullish on Google and believe the stock is undervalued.

On March 2nd, Bank of America/Merrill Lynch analyst Justin Post upgraded his rating on Google from Neutral to Buy and raised his price target from $580 to $650. Post noted, “Google is arguably undervalued due to Street concerns on management objectives and spending.” In regards to Google's contract resolution with Apple, the analyst doesn't see a big financial risk with the matter and even believes it could drive Google's stock over the next 12 months. In addition, Post stated that fund flows have started returning back to Google after underperforming Apple, Facebook, and Microsoft which he thinks will help the stock's P/E multiple improve.