Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 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.

Click the button below to learn more about A+ Investor and subscribe today.

7 Undervalued Online Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Online Services industry for Wednesday, August 21, 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.

Antelope Enterprise Holdings Ltd’s Value Grade

Value Grade:

Antelope Enterprise Holdings Ltd is an investment holding company mainly engaged in livestreaming Ecommerce business. The Company operates business through two segments. The Livestreaming Ecommerce Business segment is primarily engaged in providing one-stop solution for customers to enable them to utilize the growing sales channel of livestreaming ecommerce. The Business Management and Consulting Business segment is principally engaged in the provision of corporate management and consulting services, including computer consulting services and software development.

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.

Antelope Enterprise Holdings Ltd has a Value Score of 65, which is considered to be undervalued.

When you look at Antelope Enterprise Holdings Ltd’s price-to-sales ratio at 0.13 compared to the industry median at 1.12, this company has a lower price relative to revenue compared to its peers. This could make Antelope Enterprise Holdings Ltd’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. Antelope Enterprise Holdings Ltd’s shareholder yield is lower than its industry median ratio of (1.09%). 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. Antelope Enterprise Holdings Ltd’s price-to-book ratio is lower than its industry median ratio of 1.83. This could make Antelope Enterprise Holdings Ltd more attractive to investors looking for a new addition to their portfolio.

Beachbody Company Inc’s Value Grade

Value Grade:

The Beachbody Company, Inc. is a subscription health and wellness company. The Company's products include digital subscriptions, nutritional products and connected fitness products. Its digital subscriptions include BOD and a live interactive premium subscription, BODi. The Company's digital platforms provide a one-stop-shop for all types of fitness and nutrition content, with brands such as P90X, Insanity, 21 Day Fix, 80 Day Obsession, LIIFT4, Unstress Meditations, Portion Fix, 4 Weeks of Focus, Sure Thing, and others. The Company's nutrition-first programs, Portion Fix and 2B Mindset, teach healthy eating habits and promote healthy, sustainable weight loss. Its offerings deliver both fitness and nutritional content, and personal development mindset content. Its nutritional products include Shakeology, Beachbody Performance supplements, BEACHBARs and Bevvy supplements and others. Its digital subscription offerings are complemented by its connected fitness products acquired from Myx.

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.

Beachbody Company Inc has a Value Score of 77, which is considered to be undervalued.

Beachbody Company Inc’s price-to-book ratio is higher than its peers. This could make Beachbody Company Inc less attractive for value investors when compared to the industry median at 1.83.

You can read more about Beachbody Company 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.

Cango Inc - ADR’s Value Grade

Value Grade:

Cango Inc. provides an automotive transaction service platform, which connects dealers, financial institutions, car buyers and other industry participants. The Company’s services primarily consist of automotive financing facilitation, automotive transaction facilitation and after-market services facilitation. It offers integrated solutions that support the life cycle of automotive financing transactions, including credit origination, credit assessment, credit servicing and delinquent asset management services. It provides additional services, including car sourcing and logistics and warehousing support for dealers and facilitation of car purchases for car buyers. The Company’s also facilitates after-market services to car buyers, which is comprised of facilitating the sale of insurance policies from insurance brokers or companies. The products offered through its platform are personal accident insurances and automotive insurances.

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.

Cango Inc - ADR has a Value Score of 99, which is considered to be undervalued.

Cango Inc - ADR’s price-to-book ratio is higher than its peers. This could make Cango Inc - ADR less attractive for value investors when compared to the industry median at 1.83.

You can read more about Cango 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.

IZEA Worldwide Inc’s Value Grade

Value Grade:

IZEA Worldwide, Inc. is a marketing technology company providing software and professional services that enable brands to collaborate and transact with the full spectrum of social influencers and content creators. The Company partners with marketers to facilitate influencer marketing campaigns. It assists brands in generating more custom generated content (CGC) through dedicated programs aimed at boosting online visibility and driving sales. It collaborates with marketers to supplement or replace their content development initiatives on their Website, social media, and other channels. Its primary software platforms include IZEA Flex and IZEA.com. Each of these platforms is designed to facilitate specific aspects of collaborations between creators and brands. IZEA Flex is its flagship platform for enterprise influencer marketing. IZEA.com provides creators with tools to present their work to marketers (Listings). It also operates boutique sports marketing firm, namely The Reiman Agency.

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.

IZEA Worldwide Inc has a Value Score of 99, which is considered to be undervalued.

IZEA Worldwide Inc’s price-to-book ratio is higher than its peers. This could make IZEA Worldwide Inc less attractive for value investors when compared to the industry median at 1.83.

You can read more about IZEA Worldwide 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.

Jiayin Group Inc - ADR’s Value Grade

Value Grade:

Jiayin Group Inc is a China-based company engaged in providing a fintech platform to facilitate connections between underserved individual borrowers and financial institutions funding partners. The Company's businesses include loan facilitation services, post-origination services and other businesses. The loan facilitation services included services provided for the facilitation of loan transactions between borrowers and institutional funding partners. The other businesses included provision of referral services for investment products, guarantee services and so on.

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.

Jiayin Group Inc - ADR has a Value Score of 99, which is considered to be undervalued.

Jiayin Group Inc - ADR’s price-earnings ratio is 1.8 compared to the industry median at 25.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Jiayin Group Inc - ADR more attractive for value investors.

Jiayin Group Inc - ADR’s price-to-book ratio is higher than its peers. This could make Jiayin Group Inc - ADR less attractive for value investors when compared to the industry median at 1.83.

You can read more about Jiayin 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.

Outbrain Inc’s Value Grade

Value Grade:

Outbrain Inc. is a technology platform company that drives business results by connecting media owners and advertisers with engaged audiences to drive business outcomes. The Company’s artificial intelligence (AI) prediction engine powers a two-sided platform for advertisers and media owners that delivers concrete business outcomes. Its platform enables thousands of digital media owners to provide experiences to their audiences, delivering audience engagement and monetization. The Company’s platform provides a suite of solutions specifically to meet the needs of media owners. Its comprehensive media owner suite brings advanced AI-backed prediction technology to the Open Internet, enabling its media partners to enhance their businesses through sustainable monetization, robust audience development, and efficient revenue diversification. It offers a full-stack, cross-funnel advertising solution for advertisers of all sizes from enterprise brands and the agencies.

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.

Outbrain Inc has a Value Score of 85, which is considered to be undervalued.

Outbrain Inc’s price-to-book ratio is higher than its peers. This could make Outbrain Inc less attractive for value investors when compared to the industry median at 1.83.

You can read more about Outbrain 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 74, which is considered to be undervalued.

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 1.83.

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 7 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.

• Antelope Enterprise Holdings Ltd stock has a Value Grade of B.
• Beachbody Company Inc stock has a Value Grade of B.
• Cango Inc - ADR stock has a Value Grade of A.
• IZEA Worldwide Inc stock has a Value Grade of A.
• Jiayin Group Inc - ADR stock has a Value Grade of A.
• Outbrain Inc stock has a Value Grade of A.
• Sound Group Inc - ADR stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 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.

• 7 Undervalued Online Services Stocks for Wednesday, August 21
• 3 Undervalued Online Services Stocks for Tuesday, August 20
• Is Ibotta Inc (IBTA) Stock a Good Investment?
• What You Need to Know About Vipshop Holdings Ltd - ADR's Q2 Earnings

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.