3 Affordable Internet Software Stocks to Consider: OLO, PATH, STNE

The Zacks Internet-Software Industry is currently in the top 33% of almost 240 Zacks industries and has a plethora of stocks that have made their way onto the Zacks Rank #1 (Strong Buy) list.

More intriguing is that several of these highly ranked stocks are trading at very affordable price tags of under $15 a share.

Olo – OLO

Trading at $6 a share and 19.1X forward earnings, we’ll start with Olo Inc OLO. Providing online-ordering technology for restaurants, Olo is expecting high-double-digit EPS growth in fiscal 2025 and FY26. Bolstering Olo’s increased profitability is the company’s rapid top-line expansion, with total sales expected to increase 17% this year and projected to spike another 18% in FY26 to $396.86 million.

StoneCo – STNE

Next up is StoneCo STNE, which stands out in terms of several valuation metrics and performance indicators. As a provider of an end-to-end cloud-based platform for e-commerce in Brazil and throughout South America, StoneCo stock is trading at $13 and under the optimum level of less than 2X sales.

Plus, StoneCo stock trades at 9.5X forward earnings, and its PEG ratio of 0.36 suggests STNE is undervalued to its growth rate as well. StoneCo’s Return on Equity (ROE) and Price to Cash Flow (P/CF) are also appealing to investors, with it noteworthy that STNE has skyrocketed +65% year to date and has been one of the best performing stocks while the broader indexes have remained near correction territory.

UiPath – PATH

Rounding out the list is UiPath PATH, which offers an end-to-end platform for automation, combining Robotic Process Automation solutions for digital business operations. Going public in 2021, UiPath was one of the most anticipated software IPOs in recent years and is bringing in over a billion dollars in annual sales. While UiPath’s stock has fallen mightily from its IPO price of $65 a share, now appears to be an ideal time to get in on the company’s expansion with PATH trading around $10 and at a much more reasonable valuation.

Bottom Line

Most important to it being time to buy these top-rated internet-software stocks is that they are benefiting from a pleasant trend of positive earnings estimate revisions for their current fiscal year. This also supports the notion that Olo, StoneCo, and UiPath’s stocks are cheap, as it has helped to level out their P/E valuations.  

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

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