The adoption of smart city solutions and increasing digitization is boosting the internet industry. As the industry shows solid potential, fundamentally strong internet stocks Booking Holdings Inc. (BKNG), eBay Inc. (EBAY), and Tripadvisor, Inc. (TRIP) might be worth buying for potential profit.
One of the key factors propelling internet market growth is increasing urbanization and population and the adoption of smart city solutions for the management of resources. According to Fortune Business Insights, the global Internet of Things (IoT) market is projected to reach $3.35 trillion in 2030 at a CAGR of 26.1%.
In addition, government initiatives aiming at developing infrastructure are driving the growth of the wireless internet services market. With growing government initiatives and environmental campaigns taking center stage, technology providers and specialists have actively started simulating creative solutions based on technical modules for the design and growth of urban infrastructure in several regions.
The global wireless internet services market is expected to grow to $921.97 billion in 2027 at a CAGR of 7%.
Let’s discuss the stocks mentioned above in detail:
Booking Holdings Inc. (BKNG)
BKNG provides travel and restaurant online reservation and related services worldwide.
Its trailing-12-month net income margin of 22.14% is 395.3% higher than the 4.47% industry average. Its trailing-12-month gross profit margin of 85.74% is 143.95% higher than the 35.15% industry average.
During the fiscal first quarter ended March 31, 2023, BKNG’s total revenue increased 14.7% year-over-year to $3.78 billion. Its net income came in at $266 million, compared to a loss of $700 million in the previous-year quarter, while its net income applicable to common stockholders per common share came in at $7, compared to negative $17.10 in the previous-year quarter.
BKNG’s revenue is expected to increase 20.4% year-over-year to $5.17 billion for the fiscal second quarter ending June 2023. Its EPS is expected to increase 51% year-over-year to $28.82 for the same quarter. Also, it has surpassed EPS estimates in each of the trailing four quarters, which is impressive.
Shares of BKNG have gained 42.5% over the past year to close the last trading session at $2,765.26.
BKNG’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Quality and a B in Sentiment and Momentum. It is ranked #8 out of 87 stocks in the Internet industry.
Beyond what is stated above, we’ve also rated BKNG for Growth, Value, and Stability. Get all BKNG ratings here.
eBay Inc. (EBAY)
EBAY operates marketplace platforms that connect buyers and sellers in the United States and internationally.
On May 10, EBAY announced the expansion of its Authenticity Guarantee service for trading cards in Canada.
Its trailing-12-month EBITDA margin of 28.22% is 159% higher than the 10.90% industry average. Its trailing-12-month gross profit margin of 72.60% is 106.6% higher than the 35.15% industry average.
EBAY’s net revenues rose 1.1% year-over-year to $2.51 billion in the fiscal first quarter that ended March 31, 2023. Its net income came in at $567 million, compared to a loss of $1.34 billion in the previous-year quarter, while its net income per share came in at $1.05, compared to negative $2.28 in the previous-year quarter.
Street expects EBAY’s revenue for the fiscal second quarter ending June 2023 to increase 3.1% year-over-year to $2.50 billion. Its EPS is expected to increase 0.02% year-over-year to $0.99 for the same quarter.
The stock has gained 4.9% year-to-date to close the last trading session at $43.48.
EBAY’s robust prospects are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
EBAY has an A grade for Quality and a B in Growth and Momentum. It is ranked #9 in the same industry.
Click here to see the additional POWR Ratings for EBAY (Value, Stability, and Sentiment).
Tripadvisor, Inc. (TRIP)
TRIP operates as an online travel company, primarily engages in the provision of travel guidance products and services worldwide. The company operates in three segments: Tripadvisor Core; Viator; and TheFork.
Its trailing-12-month asset turnover ratio of 0.63x is 25.9% higher than the 0.50x industry average. Its trailing-12-month gross profit margin of 92.32% is 85.5% higher than the 49.76% industry average.
TRIP’s revenues increased 41.6% year-over-year to $371 million in the first quarter that ended March 31, 2023.
TRIP’s revenue is expected to increase 13.7% year-over-year to $474.24 million for the fiscal second quarter ending June 2023. The company’s EPS for the same quarter is expected to come to $0.36. Also, it has surpassed revenue estimates in each of the trailing four quarters.
TRIP gained 14.6% over the past month to close its last trading session at $15.88.
TRIP’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
TRIP also has an A grade for Quality and a B for Momentum, Value, and Growth. It is ranked #7 in the same industry.
For additional ratings for TRIP’s Stability and Sentiment, click here.
What To Do Next?
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BKNG shares were unchanged in premarket trading Monday. Year-to-date, BKNG has gained 37.21%, versus a 9.88% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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