In today's interconnected world, the internet plays a crucial role in communication, information, and entertainment. With the majority of the global population engaged in online activities, it has become an essential tool. So, it may be prudent to keep track of Internet stocks trivago N.V. (TRVG), Pinterest, Inc. (PINS), Angi Inc. (ANGI), and eBay Inc. (EBAY).
With a digital population exceeding 307 million, the United States stands as a global leader in technology and is home to some of the world's top internet companies. Over the past two decades, the country has consistently expanded its online presence. Currently, more than 90 percent of Americans enjoy internet access, with many considering it an indispensable part of daily life.
Moreover, the global internet services market is thriving with the digital revolution in industries like healthcare, travel booking, and entertainment. Wireless technologies are enhancing productivity and reducing costs in this transformation. The global internet services market is expected to grow at a CAGR of 4.4% until 2031.
Anticipated to reach 41% of global retail sales by 2027, up from 18% in 2017, e-commerce demonstrates ongoing expansion. This growth is expected to continue, especially during the holiday season when consumers typically engage in a significant shopping surge.
Yet, a persistent challenge in the Internet service sector lies in the continual requirement to enhance infrastructure and adopt new technologies to meet the rising demand for faster and more dependable Internet connections. Additionally, addressing the escalating sophistication of cyber threats has become a crucial concern.
Considering these trends, let's take a look at the fundamentals of the four Internet stocks, starting with number 4.
Stock #4: trivago N.V. (TRVG)
Headquartered in Düsseldorf, Germany, TRVG operates the leading global hotel search engine that allows users to find and compare lodging options from a variety of sources, such as online travel agencies and hotels. Its platform includes a variety of accommodations, and it provides user convenience by providing localized websites and apps in multiple languages.
Although TRVG’s trailing-12-month EBIT margin of 10.62% is 22% higher than the industry average of 8.70%, its trailing-12-month EBITDA margin of 10.90% is 43.4% lower than the 19.26% industry average.
In the third quarter that ended September 30, 2023, TRVG generated total revenue of €157.86 million ($171.79 million) and adjusted EBITDA of €16 million ($17.41 million). Its referral revenue amounted to €156.10 million ($169.87 million).
However, its net loss rose 172.1% from the prior-year quarter to €182.60 million ($198.71 million)
TRVG’s revenue and EPS are expected to decline 7.6% and 37.5% year-over-year to $530.52 million and $0.89 for the fiscal year ended March 2024.
The stock has soared marginally over the past month to close the last trading session at $2.45.
TRVG’s POWR Ratings reflect this mixed outlook. The stock has an overall rating of C, equating to a Neutral in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted optimally.
TRVG has a C grade for Momentum and Stability. Within the Internet industry, it is ranked #23 among 53 stocks.
To see TRVG’s additional POWR Ratings for Growth, Quality, Value, and Sentiment, click here.
Stock #3: Pinterest, Inc. (PINS)
PINS operates as a visual discovery engine in the United States and internationally. The company’s engine allows people to find ideas and offers organizing and planning tools. It shows organic recommendations and an advertising engine based on pinners’ tastes and preferences, enabling pinners with shoppable product pins.
PIN’s trailing-12-month gross profit margin of 76.53% is 56.1% higher than the 48.02% industry average. However, its negative 9.62% trailing-12-month EBIT margin compares to the industry average of 8.70%.
During the third quarter ended September 30, 2023, PINS’ revenue increased 11.5% year-over-year to $763.20 million. Its non-GAAP net income rose 152.7% over the prior-year quarter to $193.34 million. The company’s adjusted EBITDA increased 138.9% year-over-year to $184.67 million. Yet, its loss from operation stood at $5 million.
Analysts expect PINS’ EPS and revenue for the quarter ending December 2023 to increase 75.5% and 12.7% year-over-year to $0.51 and $988.42 million, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters.
While shares of PIN have soared 41.4% over the past year, they have plummeted 2.3% over the past month to close the last trading session at $36.52.
PINS has an overall rating of C, which translates to a Neutral in our proprietary rating system.
It has a C grade for Momentum and Sentiment. It is ranked #22 in the Internet industry.
Click here to see PINS’ Value, Growth, Quality, and Stability ratings.
Stock #2: Angi Inc. (ANGI)
ANGI connects home service professionals with consumers in the United States and internationally. The company’s Ads and Leads connect consumers with service professionals for local services through a nationwide online directory of service professionals in various service categories and provide consumers with valuable tools, services, and content, including verified reviews, to help them research, shop, and hire for local services; and sells term-based website.
ANGI’s trailing-12-month gross profit of 87.08% is 77.6% higher than the industry average of 49.02%. But its trailing-12-month EBITDA margin of 2.70% is 86% lower than the industry average of 19.26%.
In the fiscal third quarter that ended September 30, 2023, ANGI’s revenue came in at $371.80 million. Its adjusted EBITDA increased 13% year-over-year to $25.90 million. Yet its net loss amounted to $5.40 million and $0.01 per share.
While Street expects ANGI’s revenue to decline 30% year-over-year to $309.10 million for the fiscal fourth quarter ended December 2023, its EPS is expected to increase 82.4% year-over-year for the same quarter.
Over the past three months, the stock has surged 37.8% to close the last trading session at $2.37. But it has declined 18% over the past year.
It’s no surprise that ANGI has an overall rating of C, which equates to Neutral in our proprietary rating system.
It has a C grade for Momentum, Growth, Sentiment and Quality. Within the same industry, it is ranked #21.
In addition to the POWR Ratings stated above, one can access ANGI’s ratings for Value and Stability here.
Stock #1: eBay Inc. (EBAY)
EBAY operates marketplace platforms that connect buyers and sellers in the United States and internationally. The company’s marketplace platform includes its online marketplace at eBay.com and the eBay suite of mobile apps. Its platforms enable users to list, buy, and sell various products.
EBAY’s trailing-12-month net income margin of 26.99% is 497% higher than the 4.52% industry average. However, its trailing-12-month asset turnover ratio of 0.50x is 49.8% lower than the industry average of 0.99x.
On January 11, EBAY entered a deferred prosecution agreement with the U.S. Attorney's Office for the District of Massachusetts regarding actions taken in 2019 by former employees against Ina and David Steiner. The agreement holds eBay accountable for the misconduct of its former employees.
The company pays an annual dividend of $1, yielding 2.41% on the prevailing prices, higher than the four-year average yield of 1.57%.
During the fiscal third quarter that ended September 30, 2023, EBAY’s net revenues increased 5% year-over-year to $2.50 billion. Its gross profit rose 3.6% year-over-year to $1.80 billion. Also, its non-GAAP EPS rose 3% over the prior year’s quarter to $1.03.
However, its non-GAAP net income from continuing operations declined 1.3% year-over-year to $545 million.
EBAY’s EPS and revenue are expected to decline 3.8% and marginally year-over-year to $1.03 and $2.51 billion in the fiscal fourth quarter ended December 2023.
However, it has surpassed the consensus EPS and revenue estimate in each of the trailing four quarters.
The stock has gained 1.5% over the past three months to close the last trading session at $41.61. However, it has declined 5% over the past month.
EBAY’s POWR Ratings reflect this uncertain outlook. The stock has an overall rating of C, equating to a Neutral in our proprietary rating system.
EBAY also has a C grade for Value and Stability. It is ranked #19 out of 55 stocks in the same industry.
Beyond the POWR Ratings stated above, we have also given EBAY’s Growth, Sentiment, Momentum and Quality ratings. Get all the EBAY ratings here.
What To Do Next?
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PINS shares were trading at $37.04 per share on Thursday morning, up $0.52 (+1.42%). Year-to-date, PINS has declined 0.00%, versus a 2.61% 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.
4 Internet Stocks to Keep an Eye on for Future Gains StockNews.com
