With the COVID-19 omicron variant causing people to resume remote lifestyles, the internet content & information industry is expected to see solid growth. That is because businesses are expected to spend more on digital marketing to improve their access to consumers that are spending more time on digital content platforms.
Furthermore, manufacturers’ and software developers’ increasing technological breakthroughs and product upgrades to merge hardware with digital content software applications will likely offer significant expansion opportunities to existing players. The global digital content market is expected to reach $38.2 billion by 2030, registering a 12% CAGR.
Given this backdrop, we think industry participants Alphabet Inc. (GOOGL), Shutterstock, Inc. (SSTK), Yelp Inc. (YELP), and trivago N.V. (TRVG), which have recently suffered price dips, could be solid bets now. They have solid growth attributes and are expected to soar in price in the coming months.
Alphabet Inc. (GOOGL)
With a $1.88 trillion market cap, tech giant GOOGL is one of the world’s most valuable companies. The Mountain View, Calif.-based company operates through Google services; Google Cloud; and Other Bets segments. Created through a restructuring in 2015, it is the world’s leader in digital ad revenue.
In Oct. 2021, GOOGL launched its Phone App features, Wait Times, and Direct My Call features on Pixel 6 and Pixel 6 pro devices in the U.S. This feature should help businesses make calling easier and allow the devices to decide to receive, avoid, and call later based on users’ choices.
GOOGL’s revenue increased 41% year-over-year to $65.12 billion for the third quarter, ended Sept. 30, 2021. The company’s income from operations grew 87.6% from their year-ago value to $21.03 billion. Its net income rose 68.4% from the prior-year quarter to $18.94 billion. Also, the company’s EPS increased 70.7% year-over-year to $27.99.
Analysts expect GOOGL’s revenue for its fiscal year 2022 to be $296.98 billion, representing 16.9% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 85% in fiscal 2021 and 3.7% in fiscal 2022. Its stock price has increased 62.8% over the past year. Also, it is currently trading 6.3% below its 52-week high of $3,019.33, which it hit on Nov. 19, 2021.
GOOGL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has an A grade for Sentiment and a B grade for Quality. We have also graded GOOGL for Momentum, Stability, Value, and Growth. Click here to access all GOOGL’s ratings. GOOGL is ranked #3 of 77 stocks in the Internet industry.
Shutterstock, Inc. (SSTK)
New York City-based SSTK is a technology company that offers full-service solutions, content, and tools for brands, businesses, and media companies in North America, Europe, and internationally. The company provides its services under the Shutterstock, Bigstock, Offset, Shutterstock Select, Shutterstock Custom, Shutterstock Editorial, Offset, PremiumBeat brand names.
Last November, SSTK partnered with Staples US Retail, which serves small owners across the country. Through this partnership, customers should get direct access to SSTK’s images and editing tools and can easily find inspiration, customize beautiful content, and manage their creative projects, all in one place.
During the third quarter, ended Sept. 30, 2021, SSTK’s revenue increased 17.7% year-over-year to $194.44 million. The company’s income from operations came in at $22.17 million. And its net income amounted to $16.03 million. Also, the company’s EPS came in at $0.43.
SSTK’s revenue is expected to increase 8.9% year-over-year to $838.23 million in its fiscal year 2022. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to increase 21.8% in fiscal 2021 and 10.7% in fiscal 2022. Furthermore, the stock has gained 5.4% in price over the past nine months and 39.8% over the past year. Also, it is currently trading 23.4% below its 52-week high of $128.36, which it hit on Oct. 19, 2021.
SSTK’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has a B grade for Sentiment and Quality.
In addition to the POWR Ratings grades I’ve just highlighted, one can see SSTK’s ratings for Growth, Stability, Momentum, and Value here. SSTK is ranked #3 of 35 stocks in the Internet – Services industry.
Yelp Inc. (YELP)
YELP’s platform connects people with local businesses, such as hotels, restaurants, automotive, home services, salons, and other businesses and publishes crowd-sourced reviews about businesses. In addition, the San Francisco company develops, hosts, and markets the Yelp.com website and the Yelp mobile app and operates a table reservation service, Yelp Reservations.
YELP’s net sales increased 21.9% year-over-year to $269.16 million for the third quarter, ended Sept.30, 2021. The company’s income from operations grew 132.1% from its year-ago value to $21.65 million. Its net income came in at $18.07 million, compared to a $1.02 million net loss in the prior-year quarter. Also, the company’s EPS amounted to $0.23, compared to a $0.01 loss per share in the third quarter of 2020.
YELP’s revenue for its fiscal year 2022 is expected to be $1.16 billion, representing 12.4% year-over-year growth. The company has surpassed the consensus EPS in each of the trailing four quarters. Its EPS is expected to increase 233.3% in its fiscal 2021 and 80.6% next year. YELP’s stock price has surged 11.9% in price over the past year. Also, it is currently trading 18.5% below its 52-week high of $43.86, which it hit on March 17, 2021.
It is no surprise that YELP has an overall B rating, which equates to a Buy in our POWR Ratings system. Also, the stock has an A grade for Quality and Value.
trivago N.V. (TRVG)
TRVG is a Germany-based company that operates a hotel and accommodation search platform in the United States, Germany, the United Kingdom, Brazil, and internationally. The company offered access to approximately 5 million hotels as of Dec. 31, 2020, and other types of accommodation, including vacation rentals and private apartments in over 190 countries.
Last October , TRVG partnered with HUAWEI, a mobile devices and technology company, to bring new travel solutions to its customers. Through this partnership, TRVG should launch Petal Search and Petal Maps apps on HUAWEI’s AppGallery and allow TRVG to develop new travel solutions.
TRVG’s total revenue increased 128.6% year-over-year to €138.64 million ($157.99 million) for the third quarter, ended Sept. 30, 2021. The company’s operating income came in at €8.58 million ($9.78 million), compared to a €1.35 million ($1.53) operating loss in the prior-year quarter. Its net income amounted to €5.53 million ($6.3 million), compared to a €2.31 million ($2.64 million) net loss in the year-ago quarter. Also, the company’s EPS was €0.02 ($0.02), versus a €0.01 ($0.01) loss per share in the third quarter of 2020.
Analysts expect TRVG’s revenue for its fiscal year 2022 to be $704.67 million, representing 71.6% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. Also, its EPS is expected to grow 96.3% in its fiscal 2021 and 166.7% next year. Its stock price has increased 5.5% over the past month. Also, it is currently trading 60.7% below its 52-week high of $5.88, which it hit on March 17, 2021.
TRVG’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has a B grade for Growth, Sentiment, and Quality.
In addition to the POWR Rating grades I have just highlighted, one can see TRVG’s ratings for Value, Stability, and Momentum here. TRVG is ranked #4 in the Internet industry.
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GOOGL shares were trading at $2,833.08 per share on Thursday morning, up $4.47 (+0.16%). Year-to-date, GOOGL has declined -2.21%, versus a -0.84% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...
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|YELP||Get Rating||Get Rating||Get Rating|
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