of Rapid digital transformation for businesses The increasing digitalization of almost every global industry is driving a significant expansion of the internet services market. Some of the key factors contributing to this growth are the surge in e-commerce, digitalization of healthcare, increasing consumption of online entertainment, and government initiatives on e-government.
The number of people connected to the Internet around the world is increasing. According to Statista, as of July 2024, 5.45 billion internet usersaccounts for 67.1% of the world’s population. Additionally, there are several emerging countries that have the potential to significantly increase their Internet population.
With this background, let’s compare the two internets. Stocks to analyze which internet content stocks are the better buy: Yelp Inc. (Yelp) and Match Group Co., Ltd.MTCH).
case Yelp Inc. stock
With a market capitalization of $2.3 billion Yelp Inc. (Yelp) operates a platform that connects consumers with local businesses in the United States and internationally. The company’s platform covers a wide range of categories, including restaurants, shopping, beauty & fitness, and health, as well as home, neighborhoods, automotive, professionals, pets, events, real estate, and financial services.
On July 23, 2024, YELP announced its Summer Advertising Product Release to deliver even more value to hospitality companies and national advertisers with a series of new features and updates.
The company rolled out features and updates to help multi-location hospitality businesses seamlessly generate and manage highly qualified leads, including branded requests for quotes with a new Leads API, and expanded its YELP guarantee, verified licenses and portfolio to national hospitality businesses.
YELP shares have fallen 19.6% over the past year, closing at $33.82 in the last trading session.
YELP’s Progress EV/EBITDA The 5.88x multiple is 25.4% lower than the industry average of 7.89x. The EV/Sales multiple is 1.37, which is 28.3% lower than the industry average of 1.91.
For the second quarter ended June 30, 2024, YELP’s net revenues increased 5.9% year over year to $357.02 million. YELP’s net income attributable to common shareholders was $38.04 million, or $0.54 per share, up 158.2% and 157.1%, respectively, year over year.
Analysts expect YELP’s third-quarter (ending September 2024) revenue to grow 4.5% year-over-year to $360.54 million. Similarly, EPS is expected to be $0.84 for the quarter. Additionally, the company has beaten consensus estimates in all of the past four quarters, which is great to see.
YELP POWR Rating This reflects the company’s promising outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
This stock receives an A rating for value and quality. YELP ranks 3rd out of 51 stocks with a B rating. internet industry.
In addition to the POWR Ratings we just highlighted, you can also see YELP’s Growth, Momentum, Sentiment, and Stability ratings. here.
case Match Group Co., Ltd. shares
Its market capitalization is $9.08 billion. Match Group Co., Ltd.MTCH) is engaged in the supply of dating services. The company’s brand portfolio includes Tinder, Hinge, Match, Meetic, OkCupid, Pairs, Plenty of Fish, Azar, BLK, Hakuna, and a variety of other brands built to increase the chances of users connecting with other users.
MTCH shares have risen 2.3% over the past month, closing the last trading session at $35.19.
MTCH’s forward EV/EBIT is 14.49x, 3.9% lower than the industry average of 15.08x, however, its forward EV/Sales is 3.45x, 80.7% higher than the industry average of 1.91x.
MTCH’s revenue for the second quarter of its fiscal year ending June 30, 2024 increased 4.2% year over year to $864.07 million. In contrast, net income decreased 2.9% year over year to $133.32 million. Additionally, the company’s net income per share attributable to MTCH was flat at $0.48.
Analysts expect MTCH’s EPS to increase 4.4% year over year to $0.78 for the fiscal year ending September 2024, and revenue for the quarter to increase 2.3% year over year to $901.88 million. The company has beaten Street forecasts in both of its past quarterly revenues.
MTCH’s complex fundamentals are reflected in its POWR Ratings: The stock has an overall rating of C, which translates to Neutral in our proprietary rating system.
MTCH has a grade of C for stability and momentum, ranking 30th out of 51 peers.
click here You can see MTCH’s additional POWR Ratings (Quality, Value, Sentiment, Growth) here:
Yelp Inc. (YELP) vs. Match Group (MTCH): Which Internet Content Stock is the Better Buy?
The global market for internet services has grown dramatically as a result of the increasing adoption of digital technologies such as AI, IoT, cloud computing, data analytics, and social media across various industry sectors.
As leading internet companies, YELP and MTCH both stand to benefit from an optimistic industry outlook, but YELP’s strong financial performance, cheap valuation, and promising near-term outlook suggest it could be the better internet content stock pick.
Our research shows that investing in stocks with overall ratings of “Strong Buy” or “Buy” increases your chances of success. Internet Industry here.
What to do next?
Steve Reitmeister, a 43-year investing veteran, shares his 2024 market outlook, trading plan and top 11 stocks for the coming year.
Stock market outlook for 2024 >
MTCH shares were trading at $36.56 per share on Monday afternoon, up $1.37 (+3.89%). Year-to-date, MTCH is up 0.16%, while the benchmark S&P 500 index is up 18.09% over the same period.
About the Author: Nidhi Agarwal
Nidhi’s passion for capital markets and asset management led her to pursue a career as an investment analyst. She has a bachelor’s degree in finance and marketing and is working towards the CFA program. Her fundamental approach to stock analysis helps investors identify the best investment opportunities. Learn more…
