Investing in the stock market can feel like a rollercoaster ride, especially in today’s climate where many stocks seem overpriced. With the S&P 500 soaring 23% at the end of 2024, following a strong 24% increase in 2023, it’s easy for investors to feel apprehensive. Prices for many equities have escalated more rapidly than their underlying fundamentals can justify. However, this doesn’t mean there aren’t opportunities out there, particularly when you look for stocks priced at under $100. Here’s a closer look at three companies that stand out as great value investments even amidst a seemingly expensive market.
1. Uber: A Ride to Remember
You’ve probably used Uber to catch a ride or pick up that late-night snack. With more than 161 million users on its platform, Uber (UBER – $65) is essentially the poster child for ride-sharing services. The company is not just resting on its laurels; it has successfully diversified into delivery services and freight, leveraging its vast user base to generate a network effect.
Growth Metrics:
- Ride-sharing gross bookings: Up 17% in Q3
- Delivery business gross bookings: Increased by 16%
The profitability has notably improved as well. While challenges like looming investigations into its subscription service and competition from autonomous vehicles exist, Uber’s partnership with Alphabet’s Waymo indicates confidence in its ability to adapt and thrive.
At an enterprise value-to-sales ratio of 3.4 and a forward price-to-earnings multiple of 28, the stock presents a compelling investment, especially with expected sales growth of 16% next year and earnings growth projected at 23%.
2. Etsy: The Boutique for Unique Goods
Etsy (ETSY – $53) has gained a reputation as the go-to platform for unique, handcrafted products. Despite facing challenges recently—like a 4.1% dip in gross merchandise sales—the company is undergoing a transformation aimed at long-term growth.
Strategic Changes:
- Shifting focus from immediate sales to enhancing customer experiences
- Introducing a loyalty program and discouraging mass-produced items on its platform
These moves may cause short-term discomfort, but they’re paving the way for a brighter future. With rising consumer spending intentions forecasted for 2025, Etsy is looking at a recovery phase.
Currently priced at 20 times earnings forecasts for 2025, this stock carries an element of risk, but with a unique business model and ongoing refinement of its platform, the value proposition remains strong.
3. DraftKings: Betting on Growth
In the realm of online betting, DraftKings (DKNG – $38) is a major player. As legal sports betting gains traction across the U.S., analysts predict online gambling revenues will double by 2029.
Competitive Advantages:
- Recognizable brand pulling in major sports partnerships
- Vast access to data that informs betting lines, allowing for superior risk management
Recently, DraftKings reported 9.3 million active users—a 41% rise year-over-year. Management is optimistic, projecting a 27% to 35% increase in revenue for the upcoming years, alongside significant margin improvements.
Priced at about 20 times its projected EBITDA for 2025, DraftKings presents a tantalizing investment opportunity, especially with the expected significant earnings growth ahead.
Investing Wisely: What to Consider
With many stocks appearing overvalued, it can be tempting to shy away from the market. However, stocks like Uber, Etsy, and DraftKings showcase that opportunities exist for keen investors willing to take calculated risks.
Key Reasons to Look into These Stocks:
- Strong Market Positions: Each company holds a substantial share of its respective market.
- Growth Potential: Positive sales and earnings projections indicate room for growth.
- Innovative Strategies: They’re all adapting to consumer needs and marketplace shifts.
Conclusion: A Call to Action
Investing isn’t just about numbers—it’s about stories, futures, and potential. Anyone can talk about the market extremes, but it takes a discerning eye to spot actual values.
So grab your wallet and consider dipping into stocks that provide you with exciting opportunities, even under the $100 mark. Are you ready to make a smart investment? User your money like a pro and consider these three undervalued stocks in today’s pricey market.
Engage with us—what stocks are you eyeing for the future? Let’s keep the conversation going!
