2025 is off to a strong start. Inflation last month was moderate, with all three major stock indexes rising as of January 16.
However, not all tech stocks got the memo on 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 still look good. With these different trends in mind, you should consider purchasing some Roku (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 growth of 49% over 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 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 average analyst target was 6% higher. The stock still plunged the next day as longtime CFO Michael Gordon also announced his resignation. The company also provided modest guidance for next quarter, but that should be less interesting since MongoDB has a habit of underestimating its profit 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 most 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 artificial intelligence (AI) projects.
I’ll admit, MongoDB stock isn’t cheap based on traditional metrics. At the same time, the company’s sales have grown at a compound annual growth rate of 45% over the past five years, achieving 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. down 19%.
