Is LiveRamp Holdings (RAMP) the Best Affordable Tech Stock to Buy?

In the ever-evolving landscape of small-cap tech stocks, LiveRamp Holdings, Inc. (RAMP) has emerged as a compelling candidate for investors seeking both affordability and growth potential. As of March 30, 2025, the S&P Small Cap 600 index, which includes companies with an average market capitalization of $3 billion, has faced significant headwinds. President Trump’s tariffs have increased the cost of importing products, reducing profit margins for firms that cannot offset these costs through price increases. Higher prices have also boosted inflation, suggesting that the Federal Reserve may raise interest rates, further straining the economy. These trends disproportionately affect small-cap stocks, as they typically have fewer cost-cutting options compared to larger competitors, making declining sales significantly impact their profit margins.

However, some analysts believe that small companies may benefit from Trump’s plans, such as decreased regulations and support for local sectors, as small enterprises are more US-focused than global corporations. Looking ahead, RBC Capital believes that the current year may be a watershed moment for small caps. The Federal Reserve’s effort to cut interest rates may encourage companies to take greater risks, thus increasing M&A and IPO activity. As conditions improve, small caps may begin to close the gap between their large-cap competition.

LiveRamp Holdings, Inc. has shown resilience and growth in this challenging environment. For the fiscal quarter ending December 31, 2023, LiveRamp reported total revenue of $259.6 million, with an annual revenue of $989.2 million for fiscal year 2023. This represents a 14.2% year-over-year growth from fiscal year 2022. The company's revenue streams are diversified, with Data Connectivity Solutions contributing 51.8%, Identity Resolution Services 35.1%, and Enterprise Data Platform 13.1% of the total revenue. Geographically, North America remains the largest market, contributing 75.1% of the total revenue, followed by Europe at 15.8% and Asia-Pacific at 9.1%.

LiveRamp's profitability metrics also indicate a strong financial position. The company's gross profit margin for 2023 was 71.5%, and its operating profit margin improved to -3.8% from -5.2% in 2022. The net profit margin for 2023 was -4.9%, showing improvement from -6.7% in 2022. The company's liquidity and solvency are robust, with a current ratio of 1.89 and a quick ratio of 1.72. LiveRamp's total liquid assets amount to $378.3 million, providing a strong financial cushion.

In terms of valuation, LiveRamp's price-to-earnings (P/E) ratio is 48.3, and its price-to-book (P/B) ratio is 3.7. The enterprise value/EBITDA ratio is 29.6, indicating that the company is valued at a premium compared to its earnings. The stock price performance shows a 52-week low of $23.47 and a 52-week high of $44.22, with a current stock price of $36.85. The dividend yield is 0.65%, with an annual dividend per share of $0.24.

LiveRamp's competitive advantages include its leading position in the data collaboration platform market, a diversified revenue stream, and a strong financial position. The company's strategic investments in technology and innovation, such as the next generation of the LiveRamp Data Collaboration Platform, further enhance its competitive edge. The platform introduces new capabilities such as a simplified user interface, composable technology for cross-cloud interoperability, and a partner marketplace where innovative third-party developers can build applications showcasing their trusted expertise.

LiveRamp Holdings, Inc. compares favorably to other small-cap tech stocks in the current market environment. Its strategic positioning, diversified revenue streams, strong financial metrics, and innovative technology investments position it well to navigate the challenges and opportunities in the small-cap tech sector. However, investors should be aware of the risks and challenges that the company faces, such as market and competitive risks, operational risks, and regulatory risks.

In conclusion, LiveRamp Holdings, Inc. is an affordable tech stock with strong growth potential. The company's key financial metrics and performance indicators, such as revenue growth, profitability metrics, debt vs. equity, liquidity and solvency, valuation metrics, dividend metrics, analyst recommendations, market capitalization, price volatility, and growth opportunities, all support this conclusion. However, investors should be prepared for volatility and conduct thorough due diligence before making investment decisions.