These "Cheap" Internet Stocks Could Keep Soaring

The Russell 2000 had a nice spike on Tuesday, rising +1% as small-cap stocks continued to benefit from what has been the fastest stock market rebound in history since experiencing a correction of more than 10% in March.

Exiting a very favorable Q2 for stocks, many of the underperformers are drawing investors’ attention, along with other names that still have “cheap” price tags. This leads us to discussing several top-rated internet stocks that fit this scenario and appear to be poised for more upside.

Zacks Internet-Software Stocks: BMBL & CREX

Among the top-rated Zacks Internet-Software Industry, Bumble BMBL and Creative Realities CREX are two stocks to watch with a Zacks Rank #2 (Buy) and a Zacks Rank #1 (Strong Buy), respectively. Furthermore, the Zacks Internet-Software Industry is currently in the top 16% of over 240 Zacks industries.  

Bumble stock has rebounded and climbed more than +50% over the last three months but is still more than 30% from its 52-week high of $10 a share. Operating two of the world’s highest-grossing dating apps (Badoo & Bumble), Bumble looks extremely undervalued and is already profitable after going public in 2021. Trading at just 7X forward earnings, Bumble is expecting high-double-digit EPS growth in fiscal 2025 and 10% EPS growth in FY26.

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Meanwhile, Creative Realities is emerging as a leading marketing technologies company that provides a range of marketing technology solutions to its customers through its suite of software applications. At just $3 a share, Creative Realties' stock has also surged over +50% in the last three months.

Expected to cross the profitability line this year after posting an adjusted loss of -$0.34 a share in 2024, Creative Realities stock trades at a very attractive 7X forward P/E multiple as well. Furthermore, the company’s steady top-line growth alludes to its future earnings potential, with total sales expected to rise 10% in FY25 and projected to increase another 13% in FY26 to $63.3 million.

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Zacks Internet-Services Stocks: CXDO & LYFT

Ride-sharing leader Lyft LYFT doesn’t need quite the introduction as the other names on the list, and its stock sports a Zacks Rank #2 (Buy) along with Crexendo CXDO, another intriguing internet services company that provides communication platform software solutions and collaboration services for call centers. Both have posted +20% gains in the last three months and are expecting over 10% growth on their top and bottom lines in FY25 and FY26.

Most intriguing, Lyft shares still trade under $20 and at 14.3X forward earnings, with Crexendo stock trading at $6 and a reasonable 21.3X P/E multiple considering its growth.

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Bottom Line

Posting very pleasant gains amid the stock market’s historic rebound, the extended rally in these top-rated internet stocks could continue. Echoing this sentiment, the risk-to-reward has remained favorable to invest in Bumble, Creative Realities, Lyft, and Crexendo.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

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