7 Cheap Technology Stocks To Buy Right Now

4. Full Truck Alliance Co. Ltd. (NYSE:YMM)

Forward Price-to-Earnings Ratio: 19.49

Average Upside Potential: 51.75%

Number of Hedge Fund Holders: 28

Full Truck Alliance Co. Ltd. (NYSE:YMM) operates as a software company that develops digital freight and logistics platforms in China, connecting shippers with truck drivers through an online platform, and providing efficient and cost-effective freight transportation solutions.

The company reported a 36.48% increase in revenue for the second quarter of this year. Transaction service revenue accounted for 34% of the total revenue, up 63% year-over-year. Average shipper MAUs reached 2.65 million, an increase of 32.8% year-over-year, and 23.7% sequentially.

Full Truck Alliance Co. Ltd.’s (NYSE:YMM) eventual aim is to become the one-stop shipping platform for 30 million small and medium-sized shippers. The number of active shippers has increased significantly, with average monthly active users reaching 2.65 million in Q2 2024, up 32.8% from the previous year and 23.7% sequentially. Additionally, the 12-month shipper retention rate remains strong at 80%.

Orders fulfilled in the first half of 2024 increased by 25% year-over-year (reaching 49.1 million), exceeding the single-digit growth of the overall freight market. In this period, EV deliveries increased by 100% year-over-year, making up nearly 20% of total freight orders.

Orders from non-member shippers are increasing, contributing to a higher overall fulfillment rate. The company is confident in its ability to further improve the fulfillment rate through ongoing product and service enhancements.

Despite the challenging economic conditions, the company continued to drive the digital transformation of the logistics industry in the first half of 2024. Its platform helped businesses become more competitive by streamlining their logistics operations. Through a focus on cost reduction and efficiency, Full Truck Alliance Co. Ltd. (NYSE:YMM) is positioned for significant growth.

Here is what Baron Funds specifically said about Full Truck Alliance Co. Ltd. (NYSE:YMM) in its Q2 2022 investor letter:

“Full Truck Alliance Co. Ltd. (NYSE:YMM) is the largest digital freight platform in the world. Shares of the China-based company rallied after a cybersecurity review greenlighted the use of its Apps to add new user registrations. We remain investors. Digital platform penetration into China’s four trillion RMB full truck-load market is still just in the single digits. We see major upside based on the expected rollout of transaction commissions to truckers from the current 6% market penetration and less than 1% take rate, and we expect revenue to grow at 50% CAGR over the next five years.”