The Internet sector has grown significantly due to the expanding consumer base of eHealth platforms and digitization across almost all sectors. Given the positive industry trends, undervalued internet stocks trivago NV (TRVG), CarGurus, Inc. (CARG), and Data Storage Corporation (DTST) could be smart choices.
The digital revolution for businesses in almost every industry is driving significant growth in the Internet services market. Explosive growth in the e-commerce sector, digitization in the healthcare sector, increasing online entertainment consumption, and e-government activities of governments are some of the key drivers of the global broadband services market.
The global internet services market is expected to grow at a CAGR of 4.4% until 2031.
Additionally, increasing usage of satellite services by police, fire department, and other legal and government agencies, and improvement in international wireless communications are the key factors influencing the growth of the global satellite internet market. Additionally, increasing government attempts to integrate satellite broadband communication services will benefit the satellite internet market value.
Therefore, the global satellite internet market is estimated to grow at a CAGR of 18.2% by 2030.
Additionally, the growing demand for affordable smart wireless devices is expected to drive the growth of the wireless Internet industry. According to ReportLinker’s report, the global wireless internet services market is estimated to reach $921.97 billion by 2027 and grow at a CAGR of 7%.
With these positive trends in mind, let’s take a look at the fundamentals of three internet stocks, starting with No. 3.
Stock #3: trivago NV (TRVG)
TRVG is headquartered in Düsseldorf, Germany and operates a hotel and accommodation search platform in the United States, Germany, the United Kingdom and internationally. Provides online metasearch for hotels and accommodations through online travel agencies, hotel chains, and independent hotels.
TRVG’s future EV/Sales of 0.15x is 91.9% lower than the industry average of 1.91x. The company’s forward EV/EBIT multiple is 1.88, which is 87.9% lower than the industry average of 15.60.
TRVG’s revenue for the fourth quarter ended December 31, 2023 was €91.7 million ($98.26 million). Operating profit was 4.41 million euros ($4.73 million), and net income was 2.5 million euros ($2.68 million). Adjusted EBITDA was 7.3 million euros ($7.82 million).
Analysts expect TRVG to report sales of $113.63 million for the year ending March 2024.
Shares rose 6.7% over the past month, closing at $2.55.
TRVG’s POWR rating reflects its promising outlook. The stock has an overall rating of “B”, which equates to a “buy” according to our proprietary rating system. POWR ratings are calculated by considering 118 different factors, each factor being weighted to the best degree.
Stock quality is A grade and quality is B. Ranked 14th out of 52 stocks. internet industry.
Click here to see other ratings (Growth, Momentum, Stability, Sentiment) for TRVG.
Inventory #2: CarGurus, Inc. (Karg)
CAGR operates an online automotive marketplace that connects buyers and sellers of new and used vehicles in the United States and internationally. It operates through his two segments: US Marketplace and Digital Wholesale. The Company provides consumers with an online car marketplace where they can search new and used car listings from dealers and sell their cars to dealers and other consumers.
On January 29, 2024, CARG announced the addition of Chase to its multi-finance lending platform, expanding options for consumers looking to pre-qualify for auto financing from the comfort of their home.
CARG’s non-GAAP forward PEG is 1.09x, which is 31.6% lower than the industry average of 1.59x. The company’s forward EV/EBIT multiple is 14.20, which is 9.9% lower than the industry average of 15.76.
CARG’s total revenue for the fiscal third quarter ended September 30, 2023 was $219.42 million. Non-GAAP net income attributable to common stockholders increased 40.3% year over year to $38.32 million, and non-GAAP net income per share increased 47.8% year over year to $0.34.
Consensus revenue estimate for the current quarter, for the fiscal year ending March 2024, is $238.43 million, representing a year-over-year increase of 2.8%. EPS for the quarter is expected to be $0.31, up 19.9% year-over-year. Also, the company has surpassed consensus EPS and revenue estimates in each of his trailing four quarters, which is great.
Shares have increased 28.3% over the past six months, closing at $23.20.
CARG’s strong fundamentals are reflected in its POWR Rating. The overall rating is B, which equates to a “buy” in our own rating system.
A grade for quality, B grade for value. It ranks 13th in the industry.
In addition to the above, we also evaluated CARG for momentum, growth, sentiment, and stability. Get all CARG ratings here.
Stock #1: Data Storage Co., Ltd. (DTST)
DTST provides multicloud information technology solutions primarily in the United States. The company provides data protection and disaster recovery solutions. High availability, data storage, retention, infrastructure as a service, standby servers, support and maintenance, internet solutions. It also provides cybersecurity solutions and voice and data solutions such as VoIP and data services.
On January 24, 2024, the company announced that it had signed a six-figure contract with a multinational telecommunications company to replace and maintain its aging tape library with new, advanced backup technology.
DTST’s revenue for the third quarter of the fiscal year ended September 30, 2023 was $5.99 million, an increase of 35.5% from the same period last year. The operating profit amounted to 14.14 thousand dollars, while the operating loss in the same period last year was 223.22 thousand dollars. Net income attributable to DTST was $179.01 thousand, compared to net loss attributable to DTST in the prior year period of $245.62 thousand. EPS was $0.02, compared to loss per share of $0.04 in the prior year period.
Shares have increased 99% over the past nine months, closing the last trade at $3.80.
It’s no surprise that DTST has an overall rating of B, which equates to a Buy, in our proprietary rating system.
Emotions and growth are rated B. It ranks 12th in the industry.
In addition to the POWR Rating above, you can access DTST’s ratings for Momentum, Value, Quality and Stability here.
What’s next?
Discover 10 widely held stocks that our proprietary model shows has big downside potential. Make sure it’s not one of these. ”death trapThe following stocks are lurking in your portfolio:
10 stocks to sell right now! >
TRVG stock was trading at $2.49 per share on Thursday afternoon, down $0.06 (-2.35%). Year-to-date, TRVG has increased his 2.05%. In comparison, the benchmark S&P 500 index rose 5.24% in the same period.
About the author: Nidhi Agarwal
Nidhi has a passion for capital markets and asset management, which led her to pursue a career as an investment analyst. She has a bachelor’s degree in finance and marketing and is in the CFA program. Her fundamental approach to stock analysis helps investors identify the best investment opportunities. more…
