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The Zacks Analyst Blog Datadog, Uber Technologies and ACV Auctions
Read MoreHide Full Article
For Immediate Releases
Chicago, IL – August 27, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Datadog Inc. (DDOG - Free Report) , Uber Technologies Inc. (UBER - Free Report) and ACV Auctions Inc. (ACVA - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Buy 3 Internet-Centric Stocks for Stellar Returns in Rate-Cut Scenario
Last week, at the Jackson Hole Symposium, Fed Chairman Jerome Powell finally signaled that the much-awaited interest rate cut is around the corner. Although Powell did not say anything about the timing and magnitude of the rate cut, the CME FedWatch currently shows a 100% probability of 25-basis point cut in the benchmark lending rate in September. The interest rate derivative tool also shows a 65.3% chance of a full 1% rate cut in 2024.
An interest rate cut will benefit growth stocks like technology. Here, we have identified three Internet-centric stocks for investment to strengthen your portfolio. These are Datadog Inc., Uber Technologies Inc. and ACV Auctions Inc.
Tech Stocks to Gain From the Rate Cut
A low market rate of interest always boosts growth stocks like technology. Investment in growth stocks creates wealth over a long period of time. A lower market interest rate will decrease the discount rate, which, in turn, will raise the net present value of investment. Moreover, many of these companies depend on the chip source of credit for their businesses to grow.
Moreover, the Internet Software and Services space is gathering momentum owing to robust IT spending on solutions that support hybrid operating environments. The level of technology adoption by businesses and the proliferation of connected consumer devices, which might help people connect and do business online, is also accelerating the industry’s growth.
At the same time, the Internet-Commerce industry is flourishing in 2024, buoyed by the convenience of online shopping. This particularly holds true for Gen-Z. Many of these buyers have grown up on the Internet and are accustomed to a high level of digitization.
Our Top Picks
We have narrowed our search to three Internet-centric stocks with strong upside potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the past 30 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Datadog Inc.
Datadog is benefiting from new customer additions and increased adoption of its cloud-based monitoring and analytics platform, driven by accelerated digital transformation and cloud migration across organizations. DDOG’s solid adoption of Synthetics and Network Performance Monitoring products is expected to aid customer wins in the near term.
Contributions from a solid cloud partner base, including Google Cloud, Microsoft Azure and Amazon Web Services, remain a key growth driver for DDOG besides an expanding portfolio. Considering the abovementioned factors, we expect 2024 net sales to increase 22% from 2023.
Solid Estimate Revisions of DDOG
Datadog has an expected revenue and earnings growth rate of 23.3% and 22.7%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, current year and the next year in the past 30 days.
Strong Price Upside for DDOG
In the past month, DDOG provided a negative return of 0.6%. However, the average price target of brokerage firms represents an increase of 24.4% from the last closing price of $117.23. The brokerage target price is currently in the range of $98-$160.
Uber Technologies Inc.
Uber Technologies’ Delivery business benefits from rising online order volumes. UBER’s efforts to expand its delivery operations through successive acquisitions are encouraging. Continued recovery in Mobility operations is aiding the company. UBER’s efforts to expand its presence across the globe are impressive.
For third-quarter 2024, Uber expects gross bookings of $40.25 billion-$41.75 billion. Apart from the recovery in Mobility operations and the strong performance of the Delivery unit, UBER’s focus on financial discipline is encouraging as well. For third-quarter 2024, adjusted EBITDA is estimated between $1.58 billion and $1.68 billion.
Solid Estimate Revisions of UBER
Uber Technologies has an expected revenue and earnings growth rate of 16.5% and 19.5%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter and the next quarter, as well as for the current year and the next year in the past 30 days.
Strong Price Upside for UBER
In the past month, UBER provided a return of 16.5%. The average price target of brokerage firms represents an increase of 17.2% from the last closing price of $74.30. The brokerage target price is currently in the range of $61-$102.
ACV Auctions Inc.
ACV Auctions operates a digital marketplace that connects buyers and sellers for the online auction of wholesale vehicles. ACVA’s marketplace platform includes a digital marketplace, which connects buyers and sellers by providing online auction, ACV transportation service to enable buyers to see real-time transportation quotes and status reports of the vehicle, ACV capital, a short-term inventory financing services for buyers to purchase vehicles, and Go Green's seller assurance service for claims related to defects in vehicles.
ACVA also provides remarketing centers, which offers value-added services, such as vehicle reconditioning and storage for dealers and commercial partners. In addition, ACVA offers data services, including a True360 report, which provides cosmetic and structural vehicle assessments integrated into vehicle history reports for dealers to make wholesale and retail transaction decisions on and off the marketplace.
Solid Estimate Revisions of ACVA
ACV Auctions has an expected revenue and earnings growth rate of 29.4% and more than 100%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, current year and the next-year in the past 60 days.
Strong Price Upside for ACVA
In the past month, ACVA provided a return of 11.4%. The average price target of brokerage firms represents an increase of 16.8% from the last closing price of $18.96. The brokerage target price is currently in the range of $16-$24.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Datadog, Uber Technologies and ACV Auctions
For Immediate Releases
Chicago, IL – August 27, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Datadog Inc. (DDOG - Free Report) , Uber Technologies Inc. (UBER - Free Report) and ACV Auctions Inc. (ACVA - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Buy 3 Internet-Centric Stocks for Stellar Returns in Rate-Cut Scenario
Last week, at the Jackson Hole Symposium, Fed Chairman Jerome Powell finally signaled that the much-awaited interest rate cut is around the corner. Although Powell did not say anything about the timing and magnitude of the rate cut, the CME FedWatch currently shows a 100% probability of 25-basis point cut in the benchmark lending rate in September. The interest rate derivative tool also shows a 65.3% chance of a full 1% rate cut in 2024.
An interest rate cut will benefit growth stocks like technology. Here, we have identified three Internet-centric stocks for investment to strengthen your portfolio. These are Datadog Inc., Uber Technologies Inc. and ACV Auctions Inc.
Tech Stocks to Gain From the Rate Cut
A low market rate of interest always boosts growth stocks like technology. Investment in growth stocks creates wealth over a long period of time. A lower market interest rate will decrease the discount rate, which, in turn, will raise the net present value of investment. Moreover, many of these companies depend on the chip source of credit for their businesses to grow.
Moreover, the Internet Software and Services space is gathering momentum owing to robust IT spending on solutions that support hybrid operating environments. The level of technology adoption by businesses and the proliferation of connected consumer devices, which might help people connect and do business online, is also accelerating the industry’s growth.
At the same time, the Internet-Commerce industry is flourishing in 2024, buoyed by the convenience of online shopping. This particularly holds true for Gen-Z. Many of these buyers have grown up on the Internet and are accustomed to a high level of digitization.
Our Top Picks
We have narrowed our search to three Internet-centric stocks with strong upside potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the past 30 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Datadog Inc.
Datadog is benefiting from new customer additions and increased adoption of its cloud-based monitoring and analytics platform, driven by accelerated digital transformation and cloud migration across organizations. DDOG’s solid adoption of Synthetics and Network Performance Monitoring products is expected to aid customer wins in the near term.
Contributions from a solid cloud partner base, including Google Cloud, Microsoft Azure and Amazon Web Services, remain a key growth driver for DDOG besides an expanding portfolio. Considering the abovementioned factors, we expect 2024 net sales to increase 22% from 2023.
Solid Estimate Revisions of DDOG
Datadog has an expected revenue and earnings growth rate of 23.3% and 22.7%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, current year and the next year in the past 30 days.
Strong Price Upside for DDOG
In the past month, DDOG provided a negative return of 0.6%. However, the average price target of brokerage firms represents an increase of 24.4% from the last closing price of $117.23. The brokerage target price is currently in the range of $98-$160.
Uber Technologies Inc.
Uber Technologies’ Delivery business benefits from rising online order volumes. UBER’s efforts to expand its delivery operations through successive acquisitions are encouraging. Continued recovery in Mobility operations is aiding the company. UBER’s efforts to expand its presence across the globe are impressive.
For third-quarter 2024, Uber expects gross bookings of $40.25 billion-$41.75 billion. Apart from the recovery in Mobility operations and the strong performance of the Delivery unit, UBER’s focus on financial discipline is encouraging as well. For third-quarter 2024, adjusted EBITDA is estimated between $1.58 billion and $1.68 billion.
Solid Estimate Revisions of UBER
Uber Technologies has an expected revenue and earnings growth rate of 16.5% and 19.5%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter and the next quarter, as well as for the current year and the next year in the past 30 days.
Strong Price Upside for UBER
In the past month, UBER provided a return of 16.5%. The average price target of brokerage firms represents an increase of 17.2% from the last closing price of $74.30. The brokerage target price is currently in the range of $61-$102.
ACV Auctions Inc.
ACV Auctions operates a digital marketplace that connects buyers and sellers for the online auction of wholesale vehicles. ACVA’s marketplace platform includes a digital marketplace, which connects buyers and sellers by providing online auction, ACV transportation service to enable buyers to see real-time transportation quotes and status reports of the vehicle, ACV capital, a short-term inventory financing services for buyers to purchase vehicles, and Go Green's seller assurance service for claims related to defects in vehicles.
ACVA also provides remarketing centers, which offers value-added services, such as vehicle reconditioning and storage for dealers and commercial partners. In addition, ACVA offers data services, including a True360 report, which provides cosmetic and structural vehicle assessments integrated into vehicle history reports for dealers to make wholesale and retail transaction decisions on and off the marketplace.
Solid Estimate Revisions of ACVA
ACV Auctions has an expected revenue and earnings growth rate of 29.4% and more than 100%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, current year and the next-year in the past 60 days.
Strong Price Upside for ACVA
In the past month, ACVA provided a return of 11.4%. The average price target of brokerage firms represents an increase of 16.8% from the last closing price of $18.96. The brokerage target price is currently in the range of $16-$24.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.