TipRanks Website Visits Tool Offers Unprecedented Advantage to Investors
With the advent of earnings season in April, it’s a good time for investors to juggle their portfolios. What stocks to keep? Which to throw? Which to accumulate? Too many questions and no answers? Do not worry! TipRanks has a simple answer to all your doubts.
TipRanks has created a website traffic tool that extracts data on the number of unique visits as well as the total number of visits to a company’s website over a period of time. Using the tool, you can analyze what visitor traffic to a listed company’s website indicates about the “stickiness” of the company’s products and services.
The TipRanks website traffic tool helps you gauge a company’s website traffic trends over the last month, last quarter, or even last year. Data can be compared sequentially or year over year to see if visitor traffic has increased or decreased.
Moreover, the trend gives an added advantage to evaluate the performance of the company long before its results. An upward trend in the graph indicates that the total number of visits to the website has increased and therefore a reasonably good quarterly performance can be expected, and vice versa for a downward sloping graph.
Website Traffic Accuracy
The Website Traffic Tool sounds simple enough, but how well has it done in helping investors indicate a company’s quarterly performance? We tracked the fastest growing websites in the TipRanks universe with a focus on the most popular websites and the websites that are losing traffic. In the past, we have helped investors outsmart the market using the Website Traffic Tool.
Let’s look at three case studies of the tool’s effectiveness.
Coinbase Global, Inc. (PIECE OF MONEY)
Coinbase is an end-to-end financial infrastructure and technology provider for the crypto economy. The company generates the majority of its revenue through transaction fees from transactions made on its platform.
In the fourth quarter, COIN’s website traffic tool showed a 49.8% increase in total visits, reflecting growth in its quarterly performance. What followed was better than expected fourth quarter earnings and revenue for Coinbase. The company’s monthly transaction users (MTU) jumped 54% in sequence to 11.4 million. Following the results, COIN stock fell 1.5% the following day, but gained 7.9% the following day, and has been gaining momentum ever since.
Notably, in the Q4FY21 shareholder report, the company guided for the unreported quarter based on lower crypto asset prices coupled with lower crypto asset volatility seen year-to-date, and said that “Retail MTU and total transaction volume will both be lower in Q1 2022 compared to Q4 2021.”
A similar downward trend is seen in Coinbase’s website visits according to the website’s traffic tool, giving a fairly reasonable guide to the company’s performance long before its results.
Sofi Technologies, Inc. (SOFI)
Sofi Technologies is an online personal finance company that offers student and auto loan refinances, mortgages, personal loans, credit cards, investments and banking services through mobile apps and desktop interfaces.
Similar to Coinbase, SOFI’s website traffic tool reported significant growth (up 20.17% sequentially) in its performance in the fourth quarter ahead of its earnings release, and SOFI issued an optimistic impression at fourth trimester. Following the results, SOFI stock opened the next day up 15.6% and ended the day gaining 3.4%.
Additionally, Sofi forecast a softer outlook for the first quarter of FY22 due to the “unexpected extension of the federal student loan payment moratorium through May 1, 2022,” according to its statement. This is evident with the downward trend in Q1 website visits seen on the TipRanks tool, clearly revealing the benefit of using the tool appropriately as a pre-indicator of revenue.
Robinhood Markets, Inc. (HOOD)
Robinhood is a modern financial services platform offering cryptocurrency trading, dividend reinvestment, fractional shares, recurring investments, and access to IPOs. The company earns net revenue through transaction fees for each executed order.
For the fourth quarter of fiscal 2021, HOOD’s website traffic tool showed both a sequential decline (7.2%) and a year-over-year decline (13.2%). ) of the total number of visits to the Robinhood platform. This indicated that the company’s user base was shrinking during the quarter and the company might not perform as well as expected. Eventually, HOOD reported a decline in monthly active users in the fourth quarter and missed analyst earnings consensus. According to the tool’s data, further deterioration is expected in the company’s performance in the first quarter.
Following its fourth quarter results, HOOD plunged 12% in after-hours trading and slumped further more than 15% in premarket trading the following day.
As the case studies above show, the TipRanks website traffic tool has indicated the likely direction of a company’s performance and stock price movement. The tool provides insight into a company’s earnings well in advance and prepares investors in advance for the likely outcome of the results. Investors can thus make informed decisions about their holdings and consequently park their investable corpus funds.
How can I use the Website Traffic Tool for investing?
There are various ways in which the Website Traffic Tool can be used advantageously for investors.
First, on TipRanks, you can browse the fastest growing websites to gauge which companies are trending or losing online visits. This can help you streamline the list of companies you can invest in.
Second, you can individually study the website traffic trends of your portfolio companies to analyze their performance and make informed decisions about retention/elimination/accumulation.
As with all TipRanks tools, TipRanks Website Traffic is easy to use and you can filter the data according to your preferences.
As a caveat, TipRanks’ website traffic analysis may be more meaningful to e-commerce portals, social media platforms, and financial companies that offer direct-to-consumer services through their websites and apps. The tool may be less indicative in industries such as manufacturing and commodities where a click through to a website does not necessarily convert into a successful customer.
Fun fact: A look at the T1FY22 Website Traffic Tool data from many e-commerce portals reflects a downward trend in visits, both sequentially (due to the robust holiday season last quarter) and also year-over-year (due to the pandemic increased online shopping in the year-ago period). However, this does not necessarily mean that they are bad investment choices. Yes, businesses can perform badly in the short term, but their long term situation needs to be analyzed and an informed decision must be made.
In times of economic uncertainty, the Russian war against Ukraine and an increased inflationary context, it becomes difficult to assess consumer behavior.
In times like these, with a combination of different TipRanks tools, an understanding of the overall economic scenario and an individual risk appetite, you can design the best investment strategies for your portfolio!
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