As the U.S. central bank readies for a policy shift involving potential rate cuts, investors are watching eagerly, with Cantor Fitzgerald presenting 22 global internet stocks as poised for success amidst this change. Even in a landscape of slowing growth and diminishing cost benefits, the brokerage firm sees internet stock valuations as attractive, setting the stage for potential gains in this dynamic sector.
The Game Changer: Meta Platforms
Meta Platforms, standing tall with a $1.26 trillion market cap, has etched its place as a global social media titan. From the groundbreaking foray of Facebook in 2004 to the all-encompassing influence of Messenger, Instagram, and WhatsApp, Meta has shaped how the world connects, with sights set on pioneering augmented and virtual reality interfaces. The stock, with a remarkable surge of 69.4% over the past year, has dazzled investors, outperforming the S&P 500 Index. Reflecting on their recent Q2 triumphs, Meta’s revenue leap to a commendable $39.1 billion demonstrates resilience and forward-thinking.
Operating under the META ticker, this juggernaut remains steadfast at 23.4 times forward earnings, aligning with historical averages. Projections point towards a bright future as the company anticipates substantial infrastructure costs in the coming years, fueled by burgeoning AI investments. Analysts forecast a robust profit rise of 43.6% in fiscal 2024, with Meta unwaveringly focused on driving market share growth through AI advancements.
The Street echoes Cantor’s sentiment with a resounding “Strong Buy” rating for META stock, reflecting a positive outlook amidst market shifts.
The Trailblazer: MercadoLibre
Dwelling at a $100.7 billion valuation, MercadoLibre, the e-commerce maverick, has proven its mettle as Latin America’s primary online commerce hub. MELI shares have seen a commendable ascent of 41.2% in the past year, outpacing broader market indices, showcasing the company’s resilience amid market tumult. Post their dazzling Q2 earnings reveal, a surge of 10.6% in share price served as a testament to their strategic prowess.
Basking in their Q2 exuberance, MercadoLibre’s bottom line is expected to reach new heights, presenting an enticing picture for investors eyeing the Latin American market. The company’s robust approach towards technology integration remains a key driver behind their standout performance.
The Brightening Prospects of MercadoLibre and DoorDash
MercadoLibre: Soaring High
Reflecting on remarkable growth, with a striking 81% year-over-year increase and further anticipation of a 31.3% annual profit surge by fiscal 2025, MercadoLibre shines brightly in the financial landscape. Positioned favorably on Cantor Fitzgerald’s Top Picks roster with an “Overweight” rating, the company’s potential for margin expansion through fintech and e-commerce avenues is emphasized. The bullish sentiment resonates across Wall Street, with a unanimous “Strong Buy” consensus for MELI stock from analysts. The future seems optimistic and promising for this dynamic player.
DoorDash: Embracing Innovation
Hailing from the tech hub of San Francisco, DoorDash, Inc. stands out as a global entity bridging consumers with local businesses across 30 countries. Evolving far beyond its roots of delivering restaurant orders, the company now offers diverse local delivery services ranging from liquor to groceries. Adorned with a market cap of approximately $50.5 billion, DoorDash’s shares have outperformed the broader market, boasting gains of nearly 51.3% over the last year and around 26% year-to-date.
Recent Growth and Future Outlook
Following the unveiling of its Q2 earnings report on August 1st, DoorDash experienced an exhilarating 8% surge in its share price the following day. With remarkable figures showcasing a 23% annual revenue spike, the company exceeded Wall Street’s projections by 3.6%. Notably, DoorDash narrowed its loss to $0.38 per share from $0.44 in the prior-year quarter while achieving a record-high adjusted EBITDA of $430 million, an impressive 54% rise.
Excitingly, Total Orders escalated by 19% year-over-year to 635 million, and Marketplace gross order value (GOV) soared by 20% annually to hit $19.7 billion in Q2. This growth surge was fueled by an expanding customer base and heightened engagement. Looking ahead to Q3, DoorDash’s management projects a Marketplace GOV between $19.4 billion and $19.8 billion, with adjusted EBITDA anticipated to range from $470 million to $540 million.
Analyst Insights and Predictions
Cantor Fitzgerald foresees a strong likelihood of positive GOV and EBITDA adjustments shortly, which could propel DoorDash’s stock performance even further. On this optimistic note, the firm designates an “Overweight” rating to DASH shares. With a collective “Moderate Buy” rating from analysts, the stock holds potential for appreciation. Among 36 analysts covering DASH stock, 20 advocate a “Strong Buy,” two suggest a “Moderate Buy,” and the remaining 14 maintain a “Strong Sell” position.
The average analyst price target of $142.32 indicates a possible 14.7% upside from the current price levels. Notably, the Street’s highest price target of $170 hints at a potential rally of up to 37% for DoorDash, underscoring the optimistic outlook for this innovative player.
