Wednesday's IBD 50 Stocks To Watch pick, AI stock leader Perion Networks, is one of the best stocks to buy and watch right now, as it nears a new buy point in today's stock market action. PERI stock traded up as much as 3% Wednesday, but reversed lower despite the company's strong earnings results.
Israel-based Perion offers publishers a platform for digital advertising integrated with Meta Platforms' Facebook and other social media outlets. Its technology also works with TV-connected streaming devices such as those from Roku, Amazon's Fire TV and Apple TV.
Its AI and machine-learning algorithms optimize content and advertisements based on user preferences. The company's technology-enabled content capture seeks to improve engagement through personalized layouts and content.
Early Wednesday, Perion Networks reported better-than-expected second-quarter earnings and revenue. The company's earnings jumped 65% to 84 cents a share vs. the year-ago period. Sales grew 19% to $175 million.
"Our business results demonstrate, once again, our consistent ability to outperform the industry. We accomplish that through focusing on profitability and margin expansion, driven by efficiency and innovation," commented CEO Tal Jacobson in the news release.
Jacobson continued, "Our growth in second-quarter revenue and adjusted EBITDA, up 22% and 45% respectively, highlights our ability to identify and seize lucrative market segments with agility. Our diversification strategy, powered by exceptional execution and investment in technology, has formed the foundation of a business model built for growth."
AI Stock Leader's IBD Ratings
Boasting a strong long-term fundamental track record and big double-digit earnings growth in recent quarters, PERI stock shows a near-perfect 98 Earnings Per Share Rating, according to IBD Stock Checkup. This rating takes into account EPS growth and stability of earnings over the past three years. The two most recent quarters are weighted more heavily.
PERI stock displays a 92 out of a perfect 99 IBD Composite Rating, with strong fundamentals in the latest quarters offset by sharp stock price underperformance since mid-April. The IBD Composite Rating is designed to help investors easily gauge the quality of a stock's fundamental and technical metrics.
AI Leader Is One Of Best Stocks To Buy And Watch
AI stock Perion is building a cup base that has an early entry at 36.70, per IBD MarketSmith chart analysis. The cup base has a conventional buy point at 42.75, but keep an eye out for a potential handle to offer another entry. Correct handles are at least 1 week, or five days long.
Midday Wednesday, shares rallied as much as 3% before reversing 1% lower. The stock is about 4% away from its latest entry.
A key technical indicator to watch is the relative strength line. Currently, the RS line is lagging pretty far from its old highs, a sign that the S&P 500 is outperforming the AI stock leader since mid-April. The RS line measures a stock's price performance vs. the S&P 500 and is the blue line plotted on every IBD chart. It should hit a new high on the breakout day or shortly thereafter.
Strong fundamentals, along with the recent price recovery, make PERI one of the best stocks to buy and watch in today's stock market.
With the stock market in a confirmed uptrend, investors should be on the lookout for top stocks breaking out of basing patterns. Amid the latest stock market pullback, IBD recommends exposure in stocks at 80% to 100% of your portfolio, according to IBD's The Big Picture.
Best Stocks To Buy And Watch
Three recent IBD 50 Stocks To Watch picks, which are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Shift4 Payments | 76.40 | Consolidation | |
| United Rentals | 471.82 | Cup with handle | |
| Zscaler | 162.67 | Consolidation |
Source: IBD Data As Of Aug. 2, 2023
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
