In another example of Reddit traders driving gains, online electronics retailer Newegg Commerce (NEGG – Get Rating) saw massive returns last week. The company is an online marketplace platform for IT computer components, consumer electronics, entertainment, and smart home and gaming products. The company went public in May through a reverse merger with SPAC Lianluo Smart…
Investors didn’t take notice of NEGG until the availability of options trading earlier this month, which sent the stock higher. Then, on Tuesday, shares of NEGG surged almost 42% after news the company was holding a sale of hard-to-find graphics cards. On Wednesday morning, the stock went up another 96% after news that the company launched a new business venture offering professional PC assembly.
The stock was up another 4% Friday and up almost 150% for the week. While the company has been around for twenty years, and I’ve personally shopped for PC equipment on the site for over fifteen years, the company is currently rated a Strong Sell in our POWR Ratings system. Investors would be better suited to invest in internet stocks with Buy Ratings such as Alphabet Inc. (GOOGL – Get Rating), Facebook Inc. (FB – Get Rating), Yelp Inc. (YELP – Get Rating).
While 85% of GOOGL’s revenue comes from online ads, the company also sees revenue from sales of apps and content on Google Play and YouTube, cloud service fees, and other licensing revenue. This is in addition to sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products such as Nest and Google Home.
In fact, GOOGL’s cloud segment is generating substantial revenue growth. Its expanding data centers should continue to bolster its presence in the cloud space. The company is also benefiting from updates in Google search that are enhancing the search function. Plus, GOOGL’s mobile search is helping to drive momentum in the search segment.
The company’s focus on artificial intelligence and the home automation space should aid growth in the long term, as will its focus on wearables and its efforts to enter into the healthcare industry. The company has an overall grade of B, which translates into a Buy rating in our POWR Ratings system. GOOGL has a Sentiment Grade of A as it is well-liked by Wall Street Analysts.
Forty-four out of forty-six analysts have a Buy or Strong Buy rating on the stock. The company also has a Quality Grade of B due to solid fundamentals. GOOGL has a current ratio of 3.1 and a debt-to-equity ratio of 0.1. We also provide Growth, Value, Momentum, and Stability grades for GOOGL, which you can find here.
GOOGL is ranked #1 in the Internet industry. You can find other top stocks in this industry by clicking here.
FB is currently in the process of building a library of premium video content and monetizing it via ads or subscription revenue. Advertising revenue represents more than 90% of the company’s total revenue, with 50% coming from the U.S. and Canada and 25% from Europe. Ads are generated in most apps in the company’s ecosystem, such as Facebook, Instagram, Messenger, and WhatsApp.
The company is benefiting from strong user growth in most regions globally, particularly in the Asia Pacific. In fact, increased user engagement in products such as Instagram, WhatsApp, and Messenger is a…
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