Google is undervalued against its peers, the broader market and its own history, according to Jefferies.
Shares of Google parent Alphabet are up about 12% this year compared with the S&P 500's 17% rise. It's also lagging large-cap tech peers Amazon (up 21%), Microsoft (up 36%), Facebook (up 45%) and Apple (up 35%). The stock is trading below its 10-year average.
"We remain positive on GOOGL on attractive valuation and a portfolio of assets waiting to be unlocked," said Jefferies Technology analysts Brent Thill.
Google's market cap sits around $820 billion but runs at a 30% discount to the real total value of the company, the firm estimates, "suggesting the market assigns zero value to all 'other' segments and 'other bets,'" said Thill.
Thill said Google's valuation "reflects pessimism." Investors worry about a recent slowdown in advertising revenue growth, competitive losses to Amazon and Facebook, new initiates with lower margins and heightened regulatory overhang.
The analyst said although these are valid concerns, he remains positive that the stock has "ample value to unlock."
More transparency with investors about new segments and financials, positive sentiment from an increase in share buybacks and a pickup in M&A can all help the "ailing stock," said Thill.
A step in the right direction was the $2.6 billion acquisition of computer software company Looker to help boost Google's cloud business, he said.
The "Looker deal could be the first in a series of deals to help Google Cloud Platform catch up to AWS and Azure," he said.
Jefferies has a buy rating on the stock and a $1,500 price target. Alphabet's stock jumped 2.53% on Thursday.
— with reporting from CNBC's Michael Bloom