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Twilio and 4 Internet Stocks to Buy with Strong Momentum
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Twilio Inc. (TWLO - Free Report) has gained a whopping 259% since its Jun 23 debut on the stock market at $15 a share. The company, which offers a cloud-based API that enables software developers to include communications features (voice and video calls, text messages, etc) in their apps at much lower costs is clearly benefiting from the tremendous growth prospects in the Internet Software industry, driven by a massive rise in worldwide online spending.
According to eMarketer, a market research firm, online purchases will likely double to $3.578 trillion or 12.8% of the total retail sales of $28 trillion by 2019, as online shopping continue to gain popularity. Additionally, demand for smartphones in the U.S., China, India and Russia is projected to remain strong through 2018, thereby leading to increased Internet transactions.
At the same time, technological advancements have been leading to a change in recreational habits, as confirmed by the growing popularity of online books, TV (on-demand video) and games. This is equally responsible for growth in this space. These trends indicate that now is the perfect time to invest in Internet stocks.
Some of the optimism surrounding Twilio stock can be attributable to its better-than-expected results for the second quarter of 2016. For the second quarter, Twilio reported a loss of 19 cents per share, narrower than the Zacks Consensus Estimate of a loss of 29 cents. Moreover, the company’s total revenue of $64.5 million surged 70% on a year-over-year basis and beat the Zacks Consensus Estimate of $58 million.
The top-line improvement reflects high demand for the services offered by the company. Also, Twilio’s clientele includes some of the most influential companies in the world such as Facebook, Inc. , Nike, Inc. (NKE - Free Report) and Uber, which gives a major boost to its digital sales.
The company also saw a robust improvement in the number of active customer accounts from the year-ago quarter. Twilio has offered another metric to investors — base revenues which comprise revenues from the long-term contracts. Base revenues witnessed a year-over-year surge of 84% to $56 million — a positive indicator indeed.
Ever since the stock reported second-quarter results on Aug 8, it has added approximately 27% to its total market value. The momentum in Twilio’s shares has earned it a Zacks Momentum Style Score of ‘A’, making it a good option for investors seeking high returns. Currently, Twilio carries a Zacks Rank #3 (Hold).
What's the Momentum Style Score?
The Momentum Style Score theory basically states that what has been going on so far will possibly continue in the near future. This is an indication of the time to buy a stock that is likely to benefit from rising share prices. Nothing is more frustrating than watching a fundamentally sound or inexpensive stock remains stagnant, or even decline, after an impressive price increase.
Momentum investors thus strongly believe “the trend is your friend”. They make short-term choices among stocks that are scaling up and tend to sell them at the first signs of a downtrend. The basic idea is that once a trend is recognized, it is likely to retain that direction and not move against the flow.
Gambling on momentum stocks often helps investors earn higher returns by cashing in on the latest fad and benefiting in the short term. Nevertheless, investors should remember that this is a speculative strategy and not meant for the faint hearted.
Where to Put Your Money?
Although finding the right momentum stocks is not an easy feat, especially amid market volatility, if executed properly, these stocks could bring hefty returns for your portfolio.
It is here that our new Style Score System comes in handy. The Zacks Momentum Style Score indicates when the time is ripe to grab a stock and take advantage of its momentum with the highest probability of success. Back-tested results show that stocks with Style Scores of ‘A’ or ‘B’, when combined with a Zacks Rank #1 (Strong Buy) or #2 (Buy), handily outperform other stocks.
Here, we have picked four stocks from the Internet Software industry based on these two factors.
DTS, Inc. is a digital technology company dedicated to delivering the ultimate entertainment experience. DTS decoders are in virtually every major brand of 5.1 channel surround processors, and there are more than 300 million DTS-licensed consumer electronics products available worldwide. The company sports a Zacks Rank #1 and has a Momentum style score of ‘B’.
DTS has beaten the Zacks Consensus Estimate thrice in the trailing four quarters with an average positive surprise of 30.59%. The long-term EPS growth estimate is 17%, compared with the industry average of 15%. Year to date, the stock has gained almost 50%.
Workiva Inc. (WK - Free Report) offers cloud-based and mobile-enabled platforms for enterprises to collect, manage, report and analyze critical business data in real time. The company provides solutions for compliance, risk, sustainability and management reporting as well as enterprise risk management. It carries a Zacks Rank #2 and has a Momentum style score of ‘A’.
Workiva has beaten the Zacks Consensus Estimate in all of the trailing four quarters with an average positive surprise of 21.55%. Since its last quarterly earnings release on Aug 3, the stock has gained over 30%.
2U, Inc. (TWOU - Free Report) is an education technology company. It is a provider of cloud-based software-as-a-service (SaaS) solutions that enable non-profit colleges and universities to provide education to students anywhere. The company carries a Zacks Rank #2 and has a Momentum style score of ‘B’.
2U has beaten the Zacks Consensus Estimate in all of the trailing four quarters with an average positive surprise of 30.89%. The long-term EPS growth estimate of the company is 30%, compared with the industry average of 15%. Year to date, the stock has gained almost 27%.
Amber Road, Inc. is a provider of on-demand Global Trade Management solutions. It offers import and export, global logistics and trade agreement management solutions worldwide. The company carries a Zacks Rank #2 and has a Momentum style score of ‘A’.
Amber Road has beaten the Zacks Consensus Estimate in all of the trailing four quarters with an average positive surprise of 26.58%. Year to date, the stock has gained over 113%.
Looking Ahead
The abovementioned stocks have grabbed the spotlight with striking performances supported by solid earnings results and strong growth projections. With this in mind, we believe investing in these stocks would yield strong returns for your portfolio in the short term.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>
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Twilio and 4 Internet Stocks to Buy with Strong Momentum
Twilio Inc. (TWLO - Free Report) has gained a whopping 259% since its Jun 23 debut on the stock market at $15 a share. The company, which offers a cloud-based API that enables software developers to include communications features (voice and video calls, text messages, etc) in their apps at much lower costs is clearly benefiting from the tremendous growth prospects in the Internet Software industry, driven by a massive rise in worldwide online spending.
According to eMarketer, a market research firm, online purchases will likely double to $3.578 trillion or 12.8% of the total retail sales of $28 trillion by 2019, as online shopping continue to gain popularity. Additionally, demand for smartphones in the U.S., China, India and Russia is projected to remain strong through 2018, thereby leading to increased Internet transactions.
At the same time, technological advancements have been leading to a change in recreational habits, as confirmed by the growing popularity of online books, TV (on-demand video) and games. This is equally responsible for growth in this space. These trends indicate that now is the perfect time to invest in Internet stocks.
Some of the optimism surrounding Twilio stock can be attributable to its better-than-expected results for the second quarter of 2016. For the second quarter, Twilio reported a loss of 19 cents per share, narrower than the Zacks Consensus Estimate of a loss of 29 cents. Moreover, the company’s total revenue of $64.5 million surged 70% on a year-over-year basis and beat the Zacks Consensus Estimate of $58 million.
The top-line improvement reflects high demand for the services offered by the company. Also, Twilio’s clientele includes some of the most influential companies in the world such as Facebook, Inc. , Nike, Inc. (NKE - Free Report) and Uber, which gives a major boost to its digital sales.
The company also saw a robust improvement in the number of active customer accounts from the year-ago quarter. Twilio has offered another metric to investors — base revenues which comprise revenues from the long-term contracts. Base revenues witnessed a year-over-year surge of 84% to $56 million — a positive indicator indeed.
Ever since the stock reported second-quarter results on Aug 8, it has added approximately 27% to its total market value. The momentum in Twilio’s shares has earned it a Zacks Momentum Style Score of ‘A’, making it a good option for investors seeking high returns. Currently, Twilio carries a Zacks Rank #3 (Hold).
What's the Momentum Style Score?
The Momentum Style Score theory basically states that what has been going on so far will possibly continue in the near future. This is an indication of the time to buy a stock that is likely to benefit from rising share prices. Nothing is more frustrating than watching a fundamentally sound or inexpensive stock remains stagnant, or even decline, after an impressive price increase.
Momentum investors thus strongly believe “the trend is your friend”. They make short-term choices among stocks that are scaling up and tend to sell them at the first signs of a downtrend. The basic idea is that once a trend is recognized, it is likely to retain that direction and not move against the flow.
Gambling on momentum stocks often helps investors earn higher returns by cashing in on the latest fad and benefiting in the short term. Nevertheless, investors should remember that this is a speculative strategy and not meant for the faint hearted.
Where to Put Your Money?
Although finding the right momentum stocks is not an easy feat, especially amid market volatility, if executed properly, these stocks could bring hefty returns for your portfolio.
It is here that our new Style Score System comes in handy. The Zacks Momentum Style Score indicates when the time is ripe to grab a stock and take advantage of its momentum with the highest probability of success. Back-tested results show that stocks with Style Scores of ‘A’ or ‘B’, when combined with a Zacks Rank #1 (Strong Buy) or #2 (Buy), handily outperform other stocks.
Here, we have picked four stocks from the Internet Software industry based on these two factors.
DTS, Inc. is a digital technology company dedicated to delivering the ultimate entertainment experience. DTS decoders are in virtually every major brand of 5.1 channel surround processors, and there are more than 300 million DTS-licensed consumer electronics products available worldwide. The company sports a Zacks Rank #1 and has a Momentum style score of ‘B’.
DTS has beaten the Zacks Consensus Estimate thrice in the trailing four quarters with an average positive surprise of 30.59%. The long-term EPS growth estimate is 17%, compared with the industry average of 15%. Year to date, the stock has gained almost 50%.
Workiva Inc. (WK - Free Report) offers cloud-based and mobile-enabled platforms for enterprises to collect, manage, report and analyze critical business data in real time. The company provides solutions for compliance, risk, sustainability and management reporting as well as enterprise risk management. It carries a Zacks Rank #2 and has a Momentum style score of ‘A’.
Workiva has beaten the Zacks Consensus Estimate in all of the trailing four quarters with an average positive surprise of 21.55%. Since its last quarterly earnings release on Aug 3, the stock has gained over 30%.
2U, Inc. (TWOU - Free Report) is an education technology company. It is a provider of cloud-based software-as-a-service (SaaS) solutions that enable non-profit colleges and universities to provide education to students anywhere. The company carries a Zacks Rank #2 and has a Momentum style score of ‘B’.
2U has beaten the Zacks Consensus Estimate in all of the trailing four quarters with an average positive surprise of 30.89%. The long-term EPS growth estimate of the company is 30%, compared with the industry average of 15%. Year to date, the stock has gained almost 27%.
Amber Road, Inc. is a provider of on-demand Global Trade Management solutions. It offers import and export, global logistics and trade agreement management solutions worldwide. The company carries a Zacks Rank #2 and has a Momentum style score of ‘A’.
Amber Road has beaten the Zacks Consensus Estimate in all of the trailing four quarters with an average positive surprise of 26.58%. Year to date, the stock has gained over 113%.
Looking Ahead
The abovementioned stocks have grabbed the spotlight with striking performances supported by solid earnings results and strong growth projections. With this in mind, we believe investing in these stocks would yield strong returns for your portfolio in the short term.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>