2025 is off to a strong start. Inflation was moderate last month, with all three major stock indexes rising as of January 16. Stock markets have generally soared recently, with technology stocks leading the charge in this bull market.
However, not every tech stock got the memo about the impressive price gains. Some of my favorite stocks in the sector are currently trading well below their 52-week highs, but their business prospects remain strong. With these different trends in mind, you should consider purchasing some Year (NASDAQ:ROKU) and MongoDB (NASDAQ:MDB) Stocks in January.
Here’s why.
Let's start with MongoDB. The next-generation database software specialist has tracked sales up 49% in the past two years. Free cash flow jumped 520% during the same period:
However, MongoDB's stock price rose only 25% during this period. To put this performance into context, S&P 500 Index (SNPINDEX:^GSPC) rose 49%, and Nasdaq Composite Index (NASDAQ: ^IXIC) It's up 75%.
The database expert's chart shows that the company's share price has fallen by 29% since December 9, 2024. The company announced third-quarter results that day, beating Wall Street's consensus earnings estimate by 73%, while revenue topped analysts' average target by 6%. The stock still plunged the next day as longtime Chief Financial Officer Michael Gordon also announced his resignation. The company also provided modest next-quarter guidance, but that should be less interesting since MongoDB has a habit of underestimating its earnings forecasts.
Gordon will leave on good terms. He's still giving investor conference presentations, and the subject of his departure isn't even discussed. Instead, Gordon spent much of his time stressing how healthy the demand is for MongoDB's ultra-flexible database solution. In particular, the cloud-based Atlas database is becoming a popular data manager for large-scale artificial intelligence (AI) projects.
I'll admit, MongoDB stock isn't cheap based on traditional metrics. Meanwhile, the company's sales have grown at a compound annual growth rate of 45% over the past five years, and it trades at a price-to-earnings ratio of 74 times. The recent share price discount looks like an open buying window.
Roku's story is strikingly similar to MongoDB's. Many investors saw it as a shot at the coronavirus lockdowns of 2020, pushing this high-flying market darling into Wall Street's bargain basement in 2022 and 2023. Since then, the stock has mostly moved sideways, including a 19% share price drop in 2022. The market is generally booming in 2024.
But Roku's business is still growing.
The company may be unprofitable on the taxable bottom line, but generate healthy cash profits over time. The company used low prices as a growth-boosting strategy during the downturn of the inflation crisis but has raised prices in recent quarters.
The balance sheet has zero long-term debt and cash reserves of $2.1 billion. Streaming is a healthy target market, and Roku has a dominant market share in streaming platform software in North America. Next, the company is targeting international growth and higher profit margins.
What is not to love?
However, bearish investors continue to look for reasons to stay away from the stock. Roku stock currently trades at just 2.8 times earnings, slightly above its historic low of 1.7 times.
This is a very exciting investment idea. In fact, I doubled down on Roku last week. If you only want one stock to buy this month, Roku might be your best choice. The stock simply doesn't have to be this cheap.
Ever feel like you missed out on an opportunity to buy the most successful stocks? Then you'll want to hear this.
On rare occasions, our expert team of analysts will publish 'Double Down' Stocks Recommend companies they think will be popular. If you're worried that you've missed out on an investment opportunity, now is the best time to buy before it's too late. The numbers speak for themselves:
NVIDIA: If you invested $1,000 in 2009 when we doubled down, You will have $357,084!*
apple: If you invested $1,000 in 2008 when we doubled down, You will have $43,554!*
Netflix: If you had invested $1,000 in 2004 when we doubled down, You will have $462,766!*
We're currently issuing "double down" alerts on three companies that are incredible and likely won't be available again anytime soon.
See 3 “Double Down” Stocks »
*Stock Advisor returns as of January 13, 2025
Anders Bylund works at Roku. The Motley Fool holds positions and recommends MongoDB and Roku. The Motley Fool has a disclosure policy.
The 2 Best Tech Stocks to Buy in January Originally published by The Motley Fool