The Zacks Internet – Delivery Services participants prefer GoDaddy GDDY, MakeMyTrip MMYT, QuinStreet QNST is Asure program ASUR is at risk of growth due to its efforts to adapt to consumer preferences. High Internet penetration in emerging markets, a growing affluent middle class and the rise of mobile phones are shaping up to be a major player in the Internet – Delivery Services sector. Online delivery continues to expand beyond major metros, with an emphasis on small penetration and key areas for growth. However, long-term economic uncertainty, long-term inflation and high interest rates remain major challenges. Rising labor costs related to hiring new employees, and sales and marketing strategies to capture a larger market share may be disruptive in the near future. Since growth in new markets will take time to generate significant revenue, higher costs in the future can hurt profitability.
Company Description
The Zacks Internet – Delivery Services industry primarily consists of companies that provide services through Internet-based platforms. This includes food delivery, online travel booking, direct marketing and social media services and website hosting, among others. Some companies in this area offer online subscriptions and online subscriptions and sell business-related software and services. A few business partners offer airline and train tickets, holiday packages, hotel reservations, bus tickets and car rental services. Some players offer direct online and social media marketing, including online messaging, email broadcasts, search engine marketing and brand management sites. Companies that are growing in the industry are spending a lot of money on R&D and marketing and sales, which makes it difficult for them to make a profit in the near future.
Trends Shaping the Future of the Internet – Delivery Services Industry
Cell Phones & Internet Access as Essential Amenities: The Internet is everywhere, and the increasing use of mobile phones is changing the delivery landscape. The companies in Zacks Internet – Delivery Services companies are benefiting from the increasing number of Internet users, including the change in Internet access and the rapid implementation of 4G Volte technology. The emergence of 5G technology, which promises faster speeds and releases, is also good for these companies.
Changing Consumer Preferences: Changing consumer preferences, driven by convenience and easy accessibility, are expected to help companies. The rapid shift from online to online food ordering, along with the rise of online travel booking sites, is clearly visible to market players. However, since the growth of consumer spending is the key to the health of the entire industry, any sluggishness in the global economy could be a threat.
Technological Advances: Advances in technology, including route optimization algorithms, GPS tracking and real-time updates, have improved the reliability and reliability of Internet service providers. These technologies improve delivery accuracy and reduce transit time.
Costs Too High to Destroy Profits: Online delivery continues to expand beyond major metros, with an emphasis on small penetration and key areas for growth. However, the high future costs associated with additional processes can erode profitability. Additionally, Amazon’s focus on strengthening its supply chain is a major challenge for market players. We believe that the power distribution systems of the industry are the most likely to threaten those in the industry. Also, search giant Alphabet has entered the food delivery market with its delivery arm, Wings, and a range of food delivery apps, which could increase competition.
Zacks Industry Rankings Show Positive Outlook
Internet companies – Delivery Services are within the Computer and Technology sector. It has a Zacks Industry Rank #26, which places it among the top 10% of the 250 Zacks industries.
The Zacks Industry Rank, which is basically the Zacks average for all member industries, indicates a stable outlook. Our research shows that the top 50% of companies covered by Zacks outperform the bottom 50% by a factor of 2 to 1.
Businesses in the top 50% of companies in the Zacks ranking are due to the positive sentiment they get in the industry at risk.
Before we show you a few stocks that you may want to consider for your investment, let’s take a look at the recent stock market performance and the price picture.
Companies Outperform the S&P 500 by Sector
The Zacks Internet – Delivery Industry has outperformed the S&P 500 and the Zacks Computer and Technology sector over the past year.
The industry is up 90.2% during the period, while the S&P 500 and the broader sector have advanced 38.2% and 45.1%, respectively.
One Year Price Performance
Modern Business Accounting
On the basis of a trailing 12-month price-to-market ratio (P/S), which is widely used to evaluate Internet Delivery stocks, the company is trading at 1.74X compared to the S&P 500’s 5.17X and 6.22X for the sector. .
Over the past five years, the company has traded as high as 1.74X and as low as 0.66X and recorded an average of 1.04X, as the charts below show.
4 Stocks to Watch
MakeMyTrip: It is an online travel company that offers travel products and solutions in India and the United States. The company’s services and products include airline tickets, holiday packages, hotel reservations, train tickets, bus tickets and car rentals. It also facilitates access to travel insurance. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see A complete list of today’s Zacks #1 Rank stocks here.
MakeMyTrip is getting better at managing post-pandemic travel. Regaining demand for hotels due to the rise in short-term vacations, quality travel and clean and safe accommodation is a major challenge. Also, the company is optimistic about its cost-saving measures, MySafety and GoSafe programs, as well as strengthening the hotel business.
The Zacks Consensus Estimate for 2025 earnings has also been revised up 30 cents to $1.66 per share over the past 30 days.
GoDaddy: It is an online subscription and web hosting company that also sells software and business-related services. This Zacks Rank #2 (Buy) company develops and manufactures cloud-based technology products for small businesses, web developers and individuals.
GoDaddy is benefiting from strong growth in the Applications & Commerce business and global growth. Strengths in Build & Growth solutions are helping the Application & Commerce sector grow at the top line. Website marketing, driven by strong customer relationships based on new product launches, is a great help. Powerful updates & registrations and extensions to the GoDaddy Registry are great resources. The increase in bookings, mainly driven by increased customer base and higher prices in various sectors, has been a major contributor.
The Zacks Consensus Estimate for 2024 was unchanged at $6.49 per share over the past 60 days.
Quin Street: It is a provider of online direct marketing and social media services. QuinStreet provides online advertising, email marketing, search engine marketing and brand management services.
QuinStreet is benefiting from the rapid transition from online to online business models in all industries. Advertising spending is expected to continue to grow, driven by the development of the financial environment and business services. The company has the opportunity to bankroll this opportunity and gain new customers and valuable sales.
QuinStreet currently has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for 2025 earnings has been revised down 5 cents to 61 cents over the past 60 days.
Asure Program: This is a software development company that offers clients the ability to automate everything from human capital management (HCM) to time & attendance solutions to payroll and taxes. Asure Software’s strategic plan to become a fully digital HCM company is supporting its growth. The Zacks Rank #3 company’s focus on driving innovation in its HCM solutions is helping to drive growth in the HCM market.
The addition of new customers and a focus on sales of existing customers are driving Asure Software’s revenue. The company’s employee differentiation strategy, scalability and product offering are helping it win new customers.
The Zacks Consensus Estimate for Asure Software’s 2024 earnings was unchanged at 73 cents per share over the past 60 days.
Want the latest thoughts from Zacks Investment Research? Today, you can download the 7 Best Stocks for the Next 30 Days. Click to get this free report
GoDaddy Inc. (GDDY) : Free Stock Analysis Report
MakeMyTrip Limited (MMYT): Free Stock Analysis Report
QuinStreet, Inc. (QNST) : Free Stock Analysis Report
Asure Software Inc (ASUR): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
#Online #Shipping #Services #Benefit #Successful #Companies