The internet market is expanding rapidly due to heightened mobile network coverage and escalating internet penetration worldwide. These developments boost connectivity and accessibility to online services, fueling market growth and fostering innovation in the digital economy.
Amid this backdrop, investors could consider investing in top-tier internet stocks Jamf Holding Corp. (JAMF), 1-800-FLOWERS.COM, Inc. (FLWS), and Expedia Group, Inc. (EXPE) for sustained long-term growth.
In 2024, the internet industry is well-poised for significant growth driven by increasing digital ad spending and expanding online marketplaces. Cost-cutting measures and improved ad targeting capabilities are expected to support margin expansion for internet companies, contributing to overall profitability.
Besides, in the U.S., nearly 94% of the population has internet access, making it the third-largest online market globally, with over 311 million users. Mobile internet usage has surged, with over 295 million users in 2023, driving over 45% of web traffic, while social media usage is projected to exceed 342 million users by 2029, with Facebook leading in market share.
The Affordable Connectivity Program (ACP) has assisted around 23 million US households, benefiting 59 million low-income individuals, including veterans and students. Efforts to extend the program with bipartisan support aim to secure funding of $6 billion to $7 billion, with 216 co-sponsors in the House and support from Republican Senators, which should boost the internet sector.
Further, rapid digital transformation across industries and increased online activities boost global demand for broadband services. The pandemic has further accelerated this trend, highlighting the need for high-speed internet connections for remote work, education, and entertainment, driving market growth.
The global broadband services market is expected to grow at a CAGR of 9.7% by 2030.
Considering these favorable market trends, let’s discuss the fundamentals of three top Internet stock picks: JAMF, FLWS, and EXPE.
Stock #3: Jamf Holding Corp. (JAMF)
JAMF offers cloud-based Apple device management and security solutions, catering to businesses and educational institutions worldwide. Its suite of products simplifies device deployment, management, and security within the Apple ecosystem through subscription-based models and direct sales channels.
On March 7, 2024, JAMF and FTI Consulting, Inc. (FCN) forged a strategic alliance to enhance incident response capabilities for mobile device threats, leveraging JAMF Executive Threat Protection. Through this collaboration, FCN integrates JAMF’s advanced security product to expedite response times and mitigate cyber risks for high-risk users worldwide.
On the same day, JAMF announced same-day support for visionOS 1.1, enabling enterprise-ready mobile device management for Apple Vision Pro, ensuring secure access to company resources. This support aligns with JAMF's commitment to seamless integration with Apple technology, including compliance with regulatory changes like those introduced in iOS 17.4.
JAMF’s revenue has grown at a CAGR of 27.7% over the past three years. Over the same period, the company’s levered FCF has increased at a CAGR of 33.6%.
In the fourth quarter that ended December 31, 2023, JAMF’s total revenue increased 15.6% year-over-year to $150.65 million. The company's non-GAAP operating and net income grew 142.5% and 131.6% from the year-ago quarter to $21.08 million and $18.12 million, respectively. Also, its adjusted EBITDA increased 118.4% from the previous year’s quarter to $22.91 million.
For the first quarter of 2024, JAMF anticipates total revenue of $148 million to $150 million and non-GAAP operating income of $19 million to $20 million.
Analysts expect JAMF’s revenue and EPS to grow 10.2% and 75.7% year-over-year to $617.46 million and $0.54 for the fiscal year ending December 2024. Moreover, the company surpassed consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.
JAMF’s shares have surged 1.4% intraday and 6.6% over the past three months to close the last trading session at $17.84.
JAMF’s POWR Ratings reflect this strong outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted optimally.
The stock has a B grade for Growth. In the B-rated Internet industry, JAMF is ranked #20 out of 53 stocks.
To access additional ratings for JAMF’s Value, Momentum, Stability, Sentiment, and Quality, click here.
Stock #2: 1-800-FLOWERS.COM, Inc. (FLWS)
FLWS provides gifts for various occasions globally, operating through three key segments. Its offerings include fresh flowers, gourmet foods, personalized items, and more, available through online platforms under different brand names.
On January 25, Cheryl's Cookies, a brand of FLWS, expanded its dessert offerings with a strategic entry into the ice cream market, offering four delectable flavors inspired by its popular cookie varieties. The brand's gourmet ice cream collection aims to elevate the dessert experience, accompanied by a unique Cookie & Ice Cream Sandwich Making Kit for personalized at-home treats.
FLWS’ revenue has grown at a CAGR of 9.5% over the past five years. Over the same timeframe, the company’s levered FCF has grown at a CAGR of 20.2%.
FLWS reported adjusted net revenues of $822.05 million in the second quarter that ended December 31, 2023. The company posted adjusted net income of $82.67 million and $1.27 per common share, respectively. As of December 31, 2023, its total assets amounted to $1.19 billion, compared to its total assets of $1.05 billion as of July 2, 2023.
For the fiscal year 2024, the company anticipates its adjusted EBITDA to be in the range of $95 million to $100 million, along with free cash flow expected to fall between $60 million to $65 million.
Street anticipates FLWS to report revenue and EPS of $1.85 billion and $0.16 for the fiscal year ending June 2024. Further, the company surpassed consensus EPS estimates in each of the trailing four quarters.
Shares of FLWS have gained 41.4% over the past six months to close the last trading session at $9.80.
FLWS’ sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has an A grade for Quality and a B for Growth. Within the same industry, FLWS is ranked #19.
In addition to the POWR Ratings I have stated above, access FLWS’ Value, Momentum, Stability, and Sentiment ratings here.
Stock #1: Expedia Group, Inc. (EXPE)
EXPE is a leading global online travel company offering diverse travel products and services through its B2C and B2B segments. Its brands include Brand Expedia, Hotels.com, Vrbo, and Orbitz, catering to travelers' needs while providing travel technology solutions to industry partners.
On March 13, EXPE expanded its global travel ecosystem with new partnerships, offering travelers enhanced choices and perks while enabling businesses to access broader markets and capitalize on rising demand. These collaborations aim to provide seamless booking experiences and showcase destinations worldwide, driving interest and demand on a global scale.
EXPE’s revenue has grown at a CAGR of 2.7% over the past five years. Over the same period, the company’s EBIT has increased at a CAGR of 13.4%, while its net income and EPS have improved at CAGRs of 14.4% and 14.9%, respectively.
During the fourth quarter, which ended December 31, 2023, EXPE reported revenue of $2.89 billion, a 10.3% increase year-over-year. Its adjusted EBITDA grew 18.5% from the year-ago quarter to $532 million. Also, adjusted net income and EPS attributable to EXPE rose 23.5% and 36.5% from the prior-year quarter to $242 million and $1.72, respectively.
For the fiscal year ending December 2024, analysts expect EXPE’s revenue and EPS to grow 9.2% and 27.7% year-over-year to $14.02 billion and $12.37, respectively. The company surpassed consensus revenue and EPS estimates in three of the trailing four quarters.
EXPE’s shares have soared 32.2% over the past six months and 37.3% over the past year to close the last trading session at $130.56.
EXPE’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
EXPE has an A grade for Quality and a B for Growth and Value. Within the same industry, the stock is ranked #6.
Click here for EXPE’s additional Momentum, Stability, and Sentiment ratings.
What To Do Next?
Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:
EXPE shares were trading at $132.91 per share on Thursday morning, up $2.35 (+1.80%). Year-to-date, EXPE has declined -12.44%, versus a 10.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
3 Internet Leaders Positioning for Long-Term Growth StockNews.com
