Uncovering Hidden Gems in the Tech Sector
When it comes to identifying “cheap stocks,” there’s no one-size-fits-all definition. However, one approach is to look for companies with modest valuation ratios, fantastic long-term prospects, and a strong potential for growth. In this article, we’ll explore two tech stocks that fit this description: Roku and Fiverr International.
Stars of the Pandemic Era
During the COVID-19 pandemic, Roku and Fiverr International experienced unprecedented growth as people turned to streaming media services and online freelancing. Roku’s devices enabled millions to access entertainment options from the comfort of their homes, while Fiverr connected freelancers with companies and individuals in need of their services. As a result, their stocks soared in 2020 and 2021.
A Brief Setback, But Still Thriving
However, when people returned to office work, investors wrote off these companies as temporary winners, causing their stocks to crash. Despite this, their businesses continued to thrive, with both companies doubling their annual sales since 2020. In contrast, tech giants like Apple and Microsoft experienced slower growth during the same period.
A Tale of Two Valuations
Roku and Fiverr International are currently trading at modest valuation ratios, making them attractive investment opportunities. Roku’s stock is changing hands at 3.1 times sales, with a strong international growth strategy and ad-based sales poised to soar again. Fiverr’s price-to-sales ratio is similarly low, with an affordable price-to-free-cash-flow ratio of 14.5. Based on these metrics, Fiverr’s stock could double in price and still look cheap compared to Microsoft or Apple.
Monetizing New Opportunities
Fiverr is expanding its operations, including a recently launched hub for nonprofit services, which will further monetize its freelancing-gig platform. Meanwhile, Roku is building on its North American market dominance, with a growing international presence.
Don’t Miss Out on These Forgotten Tech Stocks
Fiverr and Roku deserve more market respect than they’re currently receiving. With their strong growth prospects, modest valuations, and innovative strategies, they’re prime candidates for investment. If you’re looking to get in on the ground floor of the next big thing, now is the time to buy.
Double Down on Success
Our team of expert analysts has a proven track record of identifying companies poised for explosive growth. On rare occasions, we issue “Double Down” stock recommendations for companies that are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. See 3 “Double Down” stocks that could be the next big thing.
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