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Despite economic constraints, the technology sector is poised to grow amid digital transformation across industries and government initiatives. So investors might consider buying internet stocks that are basically doing well, such as Expedia Group (EXPE), Carguls (CARG) and Despegger.com (DESP). read.
While macroeconomic challenges may impede near-term growth, the long-term outlook for the tech industry is bright on the back of government initiatives, increasing digitization and increasing reliance on technology in everyday life. It looks like Investors are therefore essentially buying internet stocks like Expedia Group (Exp), CarGurus Inc. (Kaag), and Despegar.com, Corp. (DESP).
The U.S. Treasury has approved funding from the federal government. Multipurpose community facility business and broadband infrastructure business Located in Delaware and Idaho under the American Rescue Plan’s Capital Project Fund (CPF).
In addition to bringing affordable high-speed Internet to American homes, the CPF program is focused on expanding economic opportunities and providing Internet connectivity to underserved communities. The funding is part of President Biden’s plan to invest in America.
Furthermore, the IoT (Internet of Things) market is expected to grow CAGR 10.5% IoT is the key to powering digital transformation and increasing operational efficiency. Increasing IoT adoption across end-user industries such as manufacturing, automotive, and healthcare is driving the market growth.
Moreover, the global wireless internet services market is expected to grow rapidly. CAGR 7% Until 2027.
Let’s dig deeper into the fundamentals of the above stocks.
Expedia Group Inc. (Exp)
EXPE is an online travel agency operating in the United States and internationally. The company operates through retail. B2B; and trivago segments. In addition, we serve a wide range of travel and non-travel sectors including corporate travel management, airlines, travel agencies, online retailers and financial institutions.
In terms of price/cash flow multiple over the last 12 months, EXPE is trading at 4.78, 43.9% lower than the industry average of 8.53. Additionally, EXPE’s 12-month EV/EBITDA of 5.52x is 39.7% lower than the industry average of 9.16x.
Last 12 months of EXPE Gross profit margin 85.93% is 144.4% higher than the industry average of 35.16%. The company’s Last 12 Months Leveraged FCF Margin of 21.35% is 640.8% higher than the industry average of 2.88%.
In the first quarter ended March 31, 2023, EXPE revenue increased 18.5% year-on-year to $2.67 billion. Adjusted EBITDA increased 6.9% year-on-year to $185 million.
The Company’s total current assets and cash and cash equivalents were $11.15 billion and $5.55 billion, respectively, for the period ended March 31, 2022 compared with the period ended March 31, 2023 In 2014, it was $12.13 billion and $5.95 billion.
Consensus revenue forecast for the year ending December 2023 is $12.93 billion, representing a 10.8% year-over-year increase. EPS for the same period is expected to rise 38.4% year-on-year to $9.40. Shares of EXPE have risen slightly over the past month, closing at $92.71.
of EXPE power rating reflects this promising outlook. This stock has an overall rating of B, which corresponds to a ‘Buy’ on our proprietary rating system. POWR Ratings values stocks by 118 different factors, each with its own weighting.
EXPE has an A grade for value and quality and a B grade for growth and momentum.Within the internet In the industry, it is ranked 5th out of 56 stocks. click here For additional stability POWR ratings and EXPE sentiment.
CarGurus Inc. (Kaag)
CARG operates an online automotive marketplace that connects buyers and sellers of new and used vehicles in the United States and abroad. It operates through his two segments, US Marketplace and Digital Wholesale.
CARG’s 12-month EV/sales multiple of 1.36 is 26.1% lower than the industry average of 1.84.
Our 12-month ROCE of 46.87x is well above the industry average of 3.24x. ROTA over the past 12 months is 25.87%, well above the industry average of 1.38%.
CARG’s marketplace revenue increased 2.4% year-over-year to $167.13 million in the first quarter of the fiscal year ended March 31, 2023. The company posted net income and EPS of $16.13 million and $10, compared with a net loss of $62.09 million, or a loss per share of $0.53, in the year-ago quarter.
Analysts expect CARG’s revenue to grow 17.1% to $1.1 billion in 2024. 2024 EPS is expected to grow 12.3% to $1.02. Exceeded EPS expectations in three of the following four quarters. Shares have surged 37.7% over the past six months to close at $19.23.
It’s no surprise that CARG has an overall B rating, which equates to a “buy” in the POWR rating system. The quality grade is A and the value grade is B. It ranks 6th in the industry.
In addition to the above, we also evaluated CARG on growth, stability, sentiment, and momentum. Get all CARG ratings here.
Despegger.com Inc. (DESP)
DESP is an Argentina-based online travel agency that offers a wide range of travel products including air tickets, travel packages, hotel reservations and other travel products through its website and mobile applications. The company operates in his two segments, Aviation Business and Aviation Business. and packages, hotels and other travel products.
DESP’s trailing 12-month EV/sales multiple of 0.58 is 47.8% lower than the industry average of 1.11. The 12-month price-to-sales multiple of 0.55 is 33.2% lower than the industry average of 0.82.
DESP’s last 12-month gross margin of 66x is 87.7% higher than the industry average of 35.16x. Leveraged FCF margin for the last 12 months was 12.58%, 336.5% above the industry average of 2.88%.
DESP had revenue of $145.54 million for the fourth quarter of the fiscal year ended December 31, 2022, an increase of 16.8% year over year. Gross profit increased 42.1% year-on-year to $100.65 million. Operating income was $3.1 million, compared with an operating loss of $1.65 million in the year-ago quarter. Adjusted EBITDA was $12.52 million, up 39.1% year-over-year.
Street expects DESP’s revenue to grow 20.6% year-on-year to $648.91 million in 2023. EPS is expected to be $0.12 in 2023. DESP’s stock fell slightly during the day, closing at $5.36.
DESP’s POWR rating reflects its solid outlook. This stock has an overall B rating, which is equivalent to a “buy” in our own rating system.
There is also an A grade for value and a B grade for growth and momentum. It ranks 8th in the industry. click here Check for additional DESP (Stability, Sentiment, Quality) ratings.
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EXPE shares were trading at $92.65 a share Wednesday morning, down $0.06 (-0.06%). YTD EXPE is up 5.76% compared to the benchmark S&P 500 index up 8.05% over the same period.
About the Author: Rashmi Kumari
Rashmi’s passion for capital markets, wealth management and financial regulatory issues inspired her to pursue a career as an investment analyst. With her Master of Commerce degree, she wants to make complex financial matters easier for individual investors to understand and help them make sound investment decisions.
post 3 must-have tech stocks first appeared in stocknews.com