The COVID-19-pandemic-led restrictions highlighted the importance of the internet as social-distancing requirements compelled most businesses and schools to operate remotely. But under any circumstances, the Internet of Things (IoT) is believed to be the next big thing because in addition to solving some of the problems wrought by the pandemic, it plays a vital role in building smart communication environments.
The increasing penetration of smartphones and other advanced gadgets and rising investments in cloud-based services are significant factors that should drive the internet industry’s growth. According to a Facts & Factors report, the global Internet of Things (IoT) market is expected to grow at a 24.5% CAGR through 2028
So, we think it could be wise to bet on quality internet stocks Shutterstock, Inc. (SSTK) and Perion Network Ltd. (PERI), which are down more than 6% in price but have solid rebound potential. These stocks are rated ‘Buy’ in our POWR Ratings system.
Shutterstock, Inc. (SSTK)
SSTK is a New York City-based technology company that provides quality content and creative workflow solutions internationally. It offers image services that consist of photographs, vectors, and illustrations used in visual communications. The company offers its services under the Shutterstock, Bigstock, Offset, TurboSquid, and PremiumBeat brand names.
On Jan. 25, 2022, SSTK board of directors declared a cash dividend of $0.24 per share of outstanding common stock, payable on March 17, 2022, to stockholders of record at the close of business on March 3, 2022. This represents an increase of approximately 14% over its previous quarterly dividend of $0.21 per share of outstanding common stock.
SSTK’s revenues have increased 14% year-over-year to $205.80 million for its fiscal fourth quarter, ended Dec. 31, 2021. The company’s subscribers grew 22% year-over-year to 343,000. Also, its total assets came in at $851.71 million, representing a 16.7% year-over-year increase.
Analysts expect SSTK’s EPS to increase 7.5% year-over-year to $3.74 in its fiscal year 2022. It surpassed the consensus EPS estimates in each of the trailing four quarters. Its revenue is expected to be $210.79 million for the quarter ending June 30, 2022, representing a 17.5% year-over-year rise. The stock has declined 19.2% in price year-to-date to close Friday’s trading session at $89.64.
SSTK’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.
The stock has a B grade for Sentiment and Quality. SSTK is ranked #2 out of 34 stocks within the Internet - Services industry. To see SSTK’s ratings for Momentum, Growth, Stability, and Value, click here.
Perion Network Ltd. (PERI)
Headquartered in Holon, Israel, PERI delivers advertising solutions internationally to brands, agencies, and publishers. It provides Wildfire, a content monetization platform; search monetization solutions; an actionable performance monitoring platform; and a cross-channel social software as a service platform that lifts return on ad spend.
PERI’s total revenues increased 34% year-over-year to $158 million for its fiscal fourth quarter, ended Dec. 31, 2021. The company’s adjusted EBITDA grew 89% year-over-year to $28.90 million, while its non-GAAP net income came in at $25.30 million, representing an 83% year-over-year increase. Also, its non-GAAP EPS was $0.62, up 38% year-over-year.
On Feb. 09, 2022, Doron Gerstel, PERI’s CEO, said, "Our unique acquisition strategy behaved exactly as we intended–creating synergistic growth and widening our competitive moat. With $322 million net cash in our balance sheet, we intend to continue that model, adding to our already-strong position in a fast-growing environment."
For the quarter ending March 31, 2022, analysts expect PERI’s EPS and revenue to increase 200% and 32.7%, respectively, year-over-year to $0.27 and $119.18 million. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock has declined 6.1% in price year-to-date to close Friday’s trading session at $22.57.
PERI’s POWR Ratings reflect its solid prospects. The company has an overall B rating, which translates to Buy in our proprietary rating system. It has an A grade for Value and Sentiment and a B grade for Growth and Quality.
Click here to see the additional POWR Ratings for PERI (Stability and Momentum). It is ranked #1 in the Internet - Services industry.
SSTK shares were trading at $89.88 per share on Monday afternoon, up $0.24 (+0.27%). Year-to-date, SSTK has declined -18.94%, versus a -8.80% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
2 Buy-Rated Internet Stocks to Scoop Up Now: Perion Network and Shutterstock StockNews.com
