Chicago, IL – January 2, 2024 – Today, Zacks Investment Ideas feature highlights Upwork UPWK, Shopify SHOP, Amazon AMZN and monday.com MNDY.
3 Top-Ranked Growth Tech Stocks to Buy in 2024
The S&P 500 inched slightly higher on Thursday to hover just below its all-time highs. The bulls appear ready to send the benchmark index to new highs during the Santa Claus rally period.
That said, stocks will likely face selling pressure at some point in the coming weeks after the market-wide December surge capped off a fantastic 2023.
Stocks and indexes always come back down to key moving averages. Thankfully, the dips might be scooped up quickly as more investors big and small chase returns in 2024 as rates fall.
The three top-ranked growth tech stocks we explore today are trading atleast 50% below their all-time highs heading into 2024. Investors might want to consider these three stocks as many big tech stocks sit near fresh records.
Upwork
Upwork is a standout in the world of freelance work, connecting businesses of all shapes and sizes with people around the world. Upwork is a former remote-work and Covid rally superstar that’s slowly making a comeback as the economy and interest rate environment normalize.
Despite a return to a more regular, pre-pandemic working environment, office building occupancy rates remain at a fraction of what they once were. A massive chunk of the economy and workforce function in a mostly digital world. Upwork helps freelancers and clients connect for jobs across development and IT, finance and accounting, design and creative, and beyond.
Upwork like many former growth-at-all-cost firms is focusing more on the bottom line. The firm has topped our adjusted earnings estimates in the trailing four quarters, including a 91% Q3 beat. Upwork is projected to swing from an adjusted loss of -$0.06 per share last year to +$0.48 a share FY23 and then surge 39% higher in FY24. The company is projected to grow its revenue by 11% this year and 12% next year, following 23% sales expansion last year.
The firm’s total marketplace take rate in the third quarter climbed to 17.1%, up from 15.4% in the year-ago period and 14.2% in Q3 FY21, driven by the simplification of its freelancer pricing structure and ads products. UPWK’s positive earnings revisions activity helps it land a Zacks Rank #1 (Strong Buy) right now. Upwork’s EPS outlook began trending higher in the early part of 2023 for FY23 and FY24.
Upwork stock climbed 45% in 2023, including some huge swings. UPWK is trading above its 21-day, 50-day, and 200-day moving averages right now. Yet it has pulled back from overbought RSI levels and it trades roughly 75% below its record highs at around $15 per share. Upwork’s Internet – Services unit lands in the top 14% of over 250 Zacks industries and its balance sheet is strong.
Shopify
Shopify provides what it has dubbed the “essential internet infrastructure for commerce.” The firm helps companies with everything from site design and sales to marketing, payments, shipping, and more. Shopify makes money from recurring subscription fees and various add-ons. Shopify grew its revenue by an average of 65% between FY17 and FY21 as companies, small businesses, entrepreneurs, and other entities clamored to catch up to the new age of retail.
Shopify’s days of 60% growth are over, which makes sense because those figures are unsustainable as its yearly revenue starts inching toward $10 billion and its customer acquisitions slow in a more saturated market. Shopify made up for slowing expansion by raising its prices in 2023 for the first time in over a decade.
Shopify’s sales climbed 21% in FY22 and its revenue is projected to jump 25% higher in FY23 from $5.60 billion to $6.98 billion and then post 19% growth next year to pull in $8.31 billion. As is the case with Amazon and most of tech, Shopify is committed to boosting its bottom line. SHOP’s adjusted earnings are projected to climb from $0.04 a share last year to $0.70 in 2023 and then surge another nearly 50% next year.
Shopify’s earnings revisions have soared in the back half of 2023 for FY23, FY24, and FY25 to help it capture that Zacks Rank #1 (Strong Buy). SHOP shares have skyrocketed 200% off their October 2022 lows, including a 125% run in 2023.
Despite the huge comeback, Shopify still trades over 50% below its all-time highs. The stock currently trades above its 21-day, 50-day, and 200-day moving averages. SHOP is on the cusp of retaking its 200-week moving average, having found support near its 50-week level in late October.
Shopify’s valuation levels are still sky-high compared to the broader tech sector. But SHOP’s balance sheet is stellar, with nearly $5 billion in cash and equivalents and $10.5 billion in total assets vs. $852 million in current liabilities and $2.2 billion in total. And its outlook is impressive in an essential area of the economy.
monday.com
Monday.com’s core work operating system or Work OS is a “low code-no code” platform that helps its customers build work management tools and software applications across various industries. On top of that, Monday.com operates a sales CRM segment and a Dev unit.
Monday.com has amassed around 190K global customers, most of which are smaller businesses. The firm operates in a key growth segment of the economy since every business needs to digitize their workflows to succeed. MNDY posted a big beat-and-raise Q3 in November, helping boost its consensus earnings estimate by 64% for FY23 and 62% for FY24. Monday.com’s recent upward earnings revisions prolong an impressive streak of improving earnings that lands it a Zacks Rank #1 (Strong Buy).
Monday.com is projected to post 40% revenue growth this year and 28% higher sales next year to climb from $519 million in FY22 to $925 million in FY24. It is also projected to swing from an adjusted loss of -$0.73 per share to +$1.49 FY23 and then reach $1.73 a share next year. Plus, MNDY has topped our quarterly EPS estimates by an average of 200% in the trailing four quarters, including a 256% Q3 beat.
MNDY shares have climbed 57% in 2023 vs. the Zacks Tech sector’s 53%. Yet it currently trades 55% below its 2021 peaks and 12% under its average Zacks price target. On the technical front, Monday.com trades above its 21-day and 50-day moving averages and below overbought RSI levels.
As is the case with SHOP and Upwork, Monday.com’s valuation levels are high. Thankfully, MNDY is improving its bottom line, and 10 of the 15 brokerage recommendations Zacks has are “Strong Buys.” On top of that, its balance sheet is in great shape.
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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
