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Yahoo
13-05-2025
- Business
- Yahoo
Have $1,000? This Stock Could Be a Bargain Buy for 2025 and Beyond.
Amplitude had a promising public offering, but the stock mostly struggled since 2022. After the recent acquisition, the company has finalized its platform, making its analytics software more compelling. It's set to launch an AI agent in June that could be a significant growth driver. 10 stocks we like better than Amplitude › Driven by the artificial intelligence (AI) boom, large-cap tech stocks soared since the pandemic. Even factoring in the recent correction in the Nasdaq Composite, the tech-heavy large-cap index is up 16% from its 2021 peak, and the Nasdaq-100, which features the 100 largest Nasdaq-listed companies, is up more than 25%. However, small-cap stocks haven't been so lucky. The Russell 2000 small-cap index is now down 16% from its peak in 2021, and small-cap tech stocks have struggled, too, as they've largely missed out on the AI boom. One such stock is Amplitude (NASDAQ: AMPL), a cloud software company that specializes in digital product analytics. Amplitude went public in September 2021 just as the pandemic stock market was peaking. After initially surging out of the gate as its sales were booming, Amplitude tumbled in 2022 along with the much of the rest of the software sector. Sales growth slowed as many of its customers had overbought during the pandemic when digital tools were seen as a necessity and the business struggled to grow as customers reduced their spend. However, three years since that crash, the company is now moving forward as those churns have finished, and it's made acquisitions and product launches that have built out its platform to where management has wanted it to be. The stock currently trades at nearly $12 a share and has a market cap of $1.5 billion. That along with its growth potential make it an attractive stock to buy even with just $1,000. Following the acquisition of Command AI last October, Amplitude finished building out its platform so that its customers no longer need to supplement it with point solutions. Amplitude does everything its customers want from a product analytics platform, which they use to track how their e-commerce websites perform. Those products include guides and surveys, which allow companies to add bubbles to guide users along and survey them about their experience; session replay, which allows companies to see how users moved through their website; and heat maps, which indicate where users are spending the most time with their mouses. Amplitude is introducing a marketing analytics tool next week, and will launch its AI agent in June, which will allow its customers to get recommendations directly from the AI agent rather than interpreting the data themselves. In an interview with The Motley Fool, CEO Spenser Skates said customers will "have hundreds of agents that are always looking over your data for you ... and finding trends and insights about how you can improve your product from that." Amplitude's financial results have improved in recent quarters, but there is still room for its growth to accelerate. Reported revenue rose 10% to $80 million with annual recurring revenue (ARR) up 12% to $320 million. However, there are other metrics that point to stronger underlying growth in the business. The number of customers with ARR above $100,000 rose 18% to 617 as it continues to attract more enterprise-level customers and its remaining performance obligations grew 30% to $325.9 million as its customers sign longer contracts. The company also announced a $50 million share buyback authorization to take advantage of volatility in the stock. Amplitude currently trades at a price-to-sales ratio of 4, which is reasonable for a stock with its growth rate, but the company has the potential to be significantly larger, especially as it's emerging as the leader in product analytics, taking market share from Alphabet's Google Analytics and Adobe Analytics. The launch of its AI agent next month could be a catalyst for long-term growth, and the business appears to be at an inflection point as the components for its platform have come together. Keep your eye on the AI agent coming out in June as that could help build momentum in the stock and make Amplitude a winner over the coming years. Before you buy stock in Amplitude, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Amplitude wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor's total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Alphabet. The Motley Fool has a disclosure policy. Have $1,000? This Stock Could Be a Bargain Buy for 2025 and Beyond. was originally published by The Motley Fool
Yahoo
03-03-2025
- Business
- Yahoo
1 Small-Cap Tech Stock That Could Be a Breakout Winner in 2025
Amplitude (NASDAQ: AMPL) went public toward the tail end of the pandemic boom, and that timing has been unfortunate for the digital product optimization specialist. The company, which provides tools that help companies enhance and refine their digital products and customer-facing interfaces, has struggled with post-pandemic-related headwinds for much of its publicly traded history. Like other software companies, many of Amplitude's customers overbought its services during the pandemic and have been rightsizing their needs since then. However, the company said that this trend started to fade in the middle of last year, allowing it to get back to growth, and it did just that in the fourth quarter. Revenue rose 9% to $78.1 million, ahead of the consensus at $76.7 million, and annual recurring revenue was up 11% to $312 million, showing faster growth on an annualized basis. On the bottom line, adjusted earnings per share fell from $0.04 to $0.02 but still beat estimates at $0.01. And free cash flow was flat at $1.5 million. Investors seem to sense that a turnaround is afoot, as the stock has risen more than 50% since its low in August. And shares popped on the earnings report last week, jumping 22%, though they've since given back most of those gains. In October, Amplitude closed on its acquisition of Command AI, a start-up that provides artificial intelligence (AI)-powered user assistance that makes software easier to use. Amplitude acquired the start-up to add a new feature it calls guides and surveys to its platform, and it did just that earlier in February, four months after the acquisition. Guides and surveys provide pop-up bubbles and other icons to assist users as they engage with a product online and go through their customer journey. CEO Spenser Skates explained in an interview with The Motley Fool that guides and surveys were the last major component the company needed to round out its digital product optimization platform. Meeting all its customers' needs in product analytics is key for the company to grow revenue, cross-sell new products, and attract business away from point solutions, which its customers have traditionally used to fulfill some of the objectives that Amplitude's digital analytics platform accomplishes. Additionally, management said it would launch an AI agent in the second half of the year, which could significantly accelerate customer insights and utility. Such an agent could look at the whole body of data to gain insights rather than just what the management team sees. This product could be a game-changer for Amplitude, as it seems well positioned to capitalize on the benefits of AI, and its customers are already looking for insights to improve their products. Amplitude also announced it would host an Investor Day conference in New York in March. Companies typically do this when they have good news to share or a bullish forecast they want to give investors. It's likely to discuss the AI agent at the conference as well. With the post-pandemic headwinds fading away, revenue growth accelerating, and the company's product suite where management wants it to be, Amplitude is in a good position. Meanwhile, a recent version upgrade with meaningful system changes at Google Analytics has turned some users off that product, causing them to go elsewhere to meet their analytics needs. Investors typically have high growth expectations for software stocks, but Amplitude's guidance calls for similar growth to what we saw in the fourth quarter. For 2025, the company sees revenue of $324.8 million to $330.8 million, reflecting 9% growth at the midpoint. At this point, I'd like to see more evidence that Amplitude's growth is accelerating before calling it a buy. However, the stock certainly has the potential for a breakout now that its platform has all the major components it needs and is looking forward to launching an AI agent later in the year. Keep an eye on the company's investor conference next month, as that could be the catalyst for another leg up in the stock. Before you buy stock in Amplitude, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Amplitude wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $765,576!* Now, it's worth noting Stock Advisor's total average return is 890% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of February 24, 2025 Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 1 Small-Cap Tech Stock That Could Be a Breakout Winner in 2025 was originally published by The Motley Fool Sign in to access your portfolio
