A Bullish Start to 2025: Two Tech Stocks to Snap Up
The new year is off to a flying start, with modest inflation rates and soaring stock market indexes. While tech stocks are leading the charge, not all of them are sharing in the spoils. Two of my favorite tech stocks are trading well below their 52-week highs, despite their promising business prospects.
MongoDB: A Hidden Gem
Next-generation database software expert MongoDB is one such gem. Its trailing sales have surged 49% over the last two years, with free cash flows jumping an impressive 520%. Yet, its stock has only gained 25% in this time span, lagging behind the S&P 500 and Nasdaq Composite. The recent 29% drop since December 9, 2024, presents a buying opportunity.
A Strong Track Record
MongoDB’s third-quarter results beat Wall Street’s consensus earnings estimates by 73%, with revenues coming in 6% above the average analyst target. Although the company’s CFO, Michael Gordon, announced his resignation, he remains on good terms and has been underscoring the strong demand for MongoDB’s ultra-flexible database solutions, particularly its cloud-based Atlas database.
A Growth Powerhouse
MongoDB’s stock may not be cheap based on traditional metrics, but its 74x price-to-earnings ratio is justified by its 45% compound annual sales growth rate over the last five years. The recent stock price discount presents a wide-open buying window.
Roku: A Streaming Media Powerhouse
Roku’s story is surprisingly similar to MongoDB’s. Written off as a play on the coronavirus lockdowns of 2020, its stock has been undervalued despite its growing business. The company generates healthy cash profits, has a dominant market share for streaming platform software in North America, and is targeting international growth and stronger profit margins.
A Steal of a Deal
Roku shares currently trade at just 2.8 times trailing sales, near an all-time low. This is an exciting investment idea, and I’ve doubled down on my own Roku investment. If you only want to buy one stock this month, Roku could be your best bet.
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