Internet adoption has increased rapidly over the past few years. With about five billion people using the Internet, the global internet penetration rate stands at about 63% in 2022. The number of devices connected to the Internet is expected to hit 500 billion by 2030.  

The Internet industry has received a significant boost from the pandemic-driven remote lifestyles and emergence of advanced technologies, such as Internet of Things (IoT). The global IoT market is forecasted to reach $2.47 trillion by 2029, growing at a 26.4% CAGR. Furthermore, the global internet services market is expected to reach $644.87 billion by 2028, growing at a CAGR of 4.4%.

Thus, we believe fundamentally strong internet stocks Booking Holdings Inc. (BKNG), Yelp Inc. (YELP), and Data Storage Corporation (DTST) might be worth adding to your portfolio.    

Booking Holdings Inc. (BKNG) 

BKNG provides travel and restaurant online reservations and related services worldwide. The company operates Booking.com, Rentalcars.com, and Priceline. It also operates Agoda, which provides an online accommodation reservation service. 

On September 28, BKNG’s Priceline introduced Priceline Experiences, enabling consumers to quickly discover and book activities in several countries. The new launch is expected to help the company expand its booking capabilities into ticketed activities and excursions.  

On September 21, Priceline and Credit One Bank, a credit card provider, announced that they had partnered to launch a dedicated travel booking engine for Wander Card members. The new launch aims to make travel even more rewarding for the Credit One bank’s card members.

In the second quarter that ended June 30, BKNG’s total revenues increased 98.8% year-over-year to $4.29 billion. Its adjusted EBITDA rose 2,162.5% from the year-ago value to $1.09 billion. The company’s non-GAAP net income grew 839% year-over-year to $776 million, while its non-GAAP EPS was up 848.2% from the prior-year quarter to $19.08. 

Analysts expect BKNG’s revenue to grow 31.5% year-over-year to $3.92 billion for the fiscal fourth quarter ending December 2022. Its EPS is estimated to increase 49.8% year-over-year to $23.71 for the same quarter. 

BKNG’s stock has gained 2.5% intraday to close its last trading session at $1,675.62.  

BKNG’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

BKNG has a B grade for Growth, Sentiment, and Quality. Among the 63 stocks in the Internet industry, it is ranked #4. 

Click here to access the additional POWR Ratings for BKNG for Stability, Value, and Momentum. 

Yelp Inc. (YELP) 

YELP operates a platform that connects consumers with local businesses internationally. The company’s platform covers various local business categories and provides businesses with free and paid advertising products.  

YELP’s net revenue increased 16.2% year-over-year to $298.88 million in the second quarter that ended June 30. Its adjusted EBITDA grew 40% from the year-ago value to $67.32 million, while its net income attributable to common stockholders improved 90.1% year-over-year to $8.01 million. The company’s net earnings per common share increased 120% from its year-ago value to $0.11.  

The consensus EPS estimate of $0.78 for the fourth fiscal quarter ending December 2022 indicates an 8% improvement year-over-year. The consensus revenue estimate of $314.11 million for the same quarter represents a 14.9% increase from the same period last year.  

The stock has gained 26.8% over the past three months to close its last trading session at $34.69.  

YELP’s strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, which translates to Buy in our proprietary rating system. The stock also rated an A in Quality and a B in Value. Within the same industry, it is ranked #2.  

To see additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for YELP, click here. 

Data Storage Corporation (DTST) 

DTST provides multi-cloud information technology solutions. The company offers data protection and disaster recovery solutions, support and maintenance, and internet solutions. It also provides cybersecurity solutions.  

DTST’s sales came in at $4.83 million for the second quarter that ended June 30, representing a 36.8% year-over-year growth. Its adjusted EBITDA amounted to $32.88 thousand, while its gross profit rose 22.8% from the same period last year to $1.85 million.  

Analysts expect DTST’s revenue for the quarter that ended September to be $5.50 million, indicating a 42.5% year-over-year growth.  

DTST has gained marginally intraday to close its last trading session at $2.01. 

It is no surprise that DTST has an overall B rating, which translates to Buy in our POWR Rating system. In addition, the stock has an A grade for Sentiment and a B for Value and Quality. It is ranked #6 in the same industry. 

Beyond what we’ve stated above, we have also given DTST grades for Growth, Momentum, and Stability. Get all DTST ratings here.

BKNG shares were trading at $1,686.66 per share on Thursday afternoon, up $11.04 (+0.66%). Year-to-date, BKNG has declined -29.70%, versus a -22.56% 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. More...

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