The consecutive Federal rate hikes have led the tech-heavy NASDAQ Composite to decline 33.4% year-to-date. E-commerce giant Amazon.com, Inc. (AMZN) has gained 5.3% over the past three months. However, it has lost 32.3% year-to-date.
Moreover, the company's net loss came in at $2.03 billion compared to an income of $7.78 billion in the year-ago period, while its loss per share came in at $0.20 compared to an EPS of $0.76 in the prior-year period. Also, analysts expect its EPS to decline 96.9% year-over-year to $0.10 in 2022.
On the other hand, the Internet industry is growing significantly. According to Statista, around 299 million internet users accessed the web in the United States in 2022. In addition, the global Internet of Things market is expected to grow at a CAGR of 16.7% from 2021 to 2026.
So, we think investors looking to invest in internet stocks could consider buying TripAdvisor, Inc. (TRIP) and Yelp Inc. (YELP) instead, which have outperformed AMZN over the past three months.
TripAdvisor, Inc. (TRIP)
TRIP operates as an online travel company in two segments, Hotels, Media & Platform, and Experiences & Dining. Also, the company operates TripAdvisor-branded websites, including tripadvisor.com in the U.S., and localized versions of the website in 40 markets and 20 languages.
On September 20, 2022, TRIP launched its new in-house creative and content studio, Wanderlab. Christine Maguire, Vice President and General Manager, Media at TRIP, said, "Tripadvisor's wealth of traveler insights sits at the heart of Wanderlab."
He added, "We see an opportunity to create a more efficient media marketplace where we connect the right advertisers with the right consumers through inspiring and relevant creative, powered by global insights."
TRIP's total revenue came in at $417 million for the second quarter that ended June 30, 2022, up 77.4% year-over-year. Its non-GAAP net income came in at $54 million, compared to a loss of $10 million in the year-ago period. Also, its non-GAAP EPS came in at $0.37, compared to a loss per share of $0.07 in the previous period.
For 2022, TRIP's revenue and EPS are expected to grow 61.7% and 396.7% year-over-year to $1.46 billion and $0.89, respectively. Over the past three months, the stock has gained 29.2% to close the last trading session at $22.94.
TRIP's POWR Ratings reflect solid prospects. The company has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has an A grade for Growth and Quality. TRIP is ranked #7 out of 63 stocks in the Internet industry. Click here to see the additional POWR Ratings for TRIP (Value, Momentum, Stability, and Sentiment).
Yelp Inc. (YELP)
YELP operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various regional business categories.
On August 4, 2022, Jeremy Stoppelman, YELP's co-founder and CEO, said, "As we continue to invest in our strategic initiatives, I remain confident in our ability to drive profitable growth over the long term."
For the second quarter that ended June 30, 2022, YELP's net revenue came in at $298.88 million, up 16.2% year-over-year. Its net income came in at $8.01 million, up 90.1% year-over-year, while its EPS came in at $0.11, up 120% year-over-year. Moreover, its adjusted EBITDA came in at $67.32 million, up 5.5% year-over-year.
YELP's revenue is expected to come in at $1.20 billion for 2022, representing a 16% year-over-year rise. In addition, the company's EPS is expected to rise 28% year-over-year to $0.64 for the same period. It surpassed the consensus EPS estimates in three of four trailing quarters.
Over the past three months, the stock has gained 26.8% to close the last trading session at $34.69.
It's no surprise that YELP has an overall B rating, which equates to a Buy in our POWR Ratings. The stock has an A grade for Quality and a B grade for Value.
YELP is ranked #2 in the same industry. Click here to see the additional POWR Ratings for YELP (Growth, Momentum, Stability, and Sentiment).
TRIP shares were trading at $22.25 per share on Thursday morning, down $0.69 (-3.01%). Year-to-date, TRIP has declined -18.38%, versus a -25.61% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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