Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Online Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Online Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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5 Undervalued Online Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Online Services industry for Thursday, July 04, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Online Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Jianpu Technology Inc - ADR’s Value Grade

Value Grade:

Jianpu Technology Inc is a China-based company principally engaged in the provision of open platform for discovery and recommendation of financial products in China. The Company, through its technology, provides users with personalized search results and recommendations that are tailored to each user's particular financial needs and credit profile. Financial service providers offer a wide variety of financial products on its platform, including consumer and other loans, credit cards, and wealth management products. The Company also provides a wide range of services and solutions to financial service providers on its platform, including sales and marketing solutions, big data risk management solutions and integrated solutions through Gold Cloud. The Company also provides professional content on financial products, the financial industry and personal finances in many forms, including short videos, audio, online articles and offline booklets and handouts.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Jianpu Technology Inc - ADR has a Value Score of 97, which is considered to be undervalued.

When you look at Jianpu Technology Inc - ADR’s price-to-sales ratio at 0.09 compared to the industry median at 1.42, this company has a lower price relative to revenue compared to its peers. This could make Jianpu Technology Inc - ADR’s stock more attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Jianpu Technology Inc - ADR’s shareholder yield is higher than its industry median ratio of (1.15%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Jianpu Technology Inc - ADR’s price-to-book ratio is lower than its industry median ratio of 1.98. This could make Jianpu Technology Inc - ADR more attractive to investors looking for a new addition to their portfolio.

Brightcove Inc’s Value Grade

Value Grade:

Brightcove Inc. is a cloud-based streaming technology and services company. The Company's software platform and suite of solutions include offerings that meet the needs of media and enterprise customers in a variety of industries across the globe with their use of streaming video. Its solutions and products include Brightcove Marketing Studio, Brightcove Communications Studio, Brightcove Media Studio, Brightcove Audience Insights, Zencode, and Brightcove Beacon. Brightcove Communications Studio is for marketers and corporate communications professionals who need tools to deliver information in an engaging, secure, and scalable manner through live and on-demand content. Brightcove Media Studio is a comprehensive solution for over-the-top video services, media publishers and broadcasters looking to monetize their media, live stream at scale and nurture their audience lifecycle. Brightcove Audience Insights is a customer data platform specifically designed for video streaming businesses.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Brightcove Inc has a Value Score of 73, which is considered to be undervalued.

Brightcove Inc’s price-to-book ratio is higher than its peers. This could make Brightcove Inc less attractive for value investors when compared to the industry median at 1.98.

You can read more about Brightcove Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

CISO Global Inc’s Value Grade

Value Grade:

CISO Global, Inc. is a cybersecurity and compliance company. The Company provides a full range of cybersecurity consulting and related services, encompassing compliance, cybersecurity, and culture. It offers two types of services to clients, including security managed services and professional services. The Company's services include compliance services, secured managed services, security operations center (SOC) services, virtual Chief Information Security Officer (vCISO) services, incident response, certified forensics, technical assessments, and cybersecurity training. Its compliance practice ensures the customers are implementing the right controls, prioritizing risks, and investing in the remediation to comply and adhere to applicable industry standards and guidelines. Its SOC provides 24x7 threat monitoring, alerting, validation, and proactive threat hunting. It provides security testing services, including penetration testing, attack simulation exercises, and training programs.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

CISO Global Inc has a Value Score of 74, which is considered to be undervalued.

CISO Global Inc’s price-to-book ratio is higher than its peers. This could make CISO Global Inc less attractive for value investors when compared to the industry median at 1.98.

You can read more about CISO Global Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Live World Inc’s Value Grade

Value Grade:

LiveWorld, Inc. is a digital agency specializing in social media and technology solutions. It provides consulting, strategy, and creative along with human agents for moderation, engagement, customer care, and adverse events management and conversation management software, and chatbots for digital campaigns and social media programs. Its solutions include digital agency services, moderation services, adverse events management and social customer service. Its digital agency services include strategy, research and planning; technology and digital solutions; process consulting; design and production; conversation engagement, and insights and analytics. Its social media moderation services are designed to handle multi-language brands. Its adverse events management services include 24/7 brand protection; real-time AE detection and review; escalation and routing, and escalation and routing. Its clients include various brands in pharmaceuticals, healthcare, and financial-travel services.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Live World Inc has a Value Score of 67, which is considered to be undervalued.

Live World Inc’s price-to-book ratio is higher than its peers. This could make Live World Inc less attractive for value investors when compared to the industry median at 1.98.

You can read more about Live World Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Sound Group Inc - ADR’s Value Grade

Value Grade:

Sound Group Inc. is a global audio-centric social and entertainment company. Leveraging its product portfolio and advanced in-house technologies, the Company caters to global user interest in audio entertainment and social networking.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Sound Group Inc - ADR has a Value Score of 89, which is considered to be undervalued.

Sound Group Inc - ADR’s price-earnings ratio is 0.1 compared to the industry median at 26.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Sound Group Inc - ADR more attractive for value investors.

Sound Group Inc - ADR’s price-to-book ratio is higher than its peers. This could make Sound Group Inc - ADR less attractive for value investors when compared to the industry median at 1.98.

You can read more about Sound Group Inc - ADR’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Online Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Online Services stocks as well as other industrys.

Choosing Which of the 5 Best Online Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Jianpu Technology Inc - ADR stock has a Value Grade of A.
• Brightcove Inc stock has a Value Grade of B.
• CISO Global Inc stock has a Value Grade of B.
• Live World Inc stock has a Value Grade of B.
• Sound Group Inc - ADR stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 undervalued stocks in the Online Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Online Services Stocks

Want to learn more about Online Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 5 Undervalued Online Services Stocks for Thursday, July 04
• 7 Undervalued Online Services Stocks for Wednesday, July 03
• Why Bilibili Inc - ADR’s (BILI) Stock Is Up 4.61%
• Why CarGurus Inc’s (CARG) Stock Is Down 4.55%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.