Lower interest rates can reduce borrowing costs, boost consumer demand, and make growth stocks more attractive to investors.
That means that many stocks will benefit either directly or indirectly from falling interest rates.
In this article, we’ll take a look at 10 stocks that could benefit if rates drop, and take a closer look at 3 of the most interesting picks.
Find high-quality stocks that will benefit from falling interest rates with TIKR. (It’s free) >>>
Thryv Holdings, Inc. (THRY)
- Market Cap: $600 million
- Industry: Media
- Analyst Upside: 57%
- P/E Ratio: 13
Company Overview: Thryv Holdings, Inc. (THRY) is a SaaS and marketing services company focused on helping small-to-medium-sized businesses (SMBs) manage their operations, customer relationships, and online presence. Its core offering is the Thryv® software platform, alongside legacy print and digital marketing services from its roots in the Yellow Pages industry.
Business Strategy: Thryv generates revenue primarily through subscriptions to its SMB software platform and digital marketing services. The company is transitioning from a legacy print business to a higher-margin SaaS model, aiming to drive long-term growth through platform adoption and international expansion.
Why lower interest rates help:
- High debt load: Thryv carries significant debt from its transformation from a legacy print business to a digital SaaS platform. Falling rates reduce interest expense, improving free cash flow.
- SMB customer base: Thryv serves small businesses, which tend to spend more on marketing and software when borrowing is cheaper and credit is more available.
- Valuation multiple expansion: SaaS companies often trade at higher multiples when rates fall, since their future cash flows are discounted less heavily.
Track Thryv Holdings’s financials, growth trends, and analyst forecasts on TIKR >>>
Block (XYZ)
- Market Cap: $29 billion
- Industry: Financial Services
- Analyst Upside: 38%
- P/E Ratio: 12
Company Overview: Block is a fintech company with two main ecosystems: Square, which serves small businesses with payment and financial tools, and Cash App, a popular consumer finance app.
Business Strategy: Block aims to build a connected financial platform by expanding its ecosystem for both merchants and individuals, monetizing everything from payments and lending to banking and Bitcoin transactions.
Why lower interest rates help:
- Fintech growth model: Block has high exposure to consumer spending (Cash App, Square merchant services). Lower rates support stronger consumer and business activity.
- Credit products: Cash App offers buy now, pay later (BNPL) and other lending products. Lower rates can improve margins on these services and reduce default risk.
- Risk-on sentiment: As rates drop, investors tend to favor higher-growth tech and fintech stocks. Block tends to rally in these “risk-on” environments.
Find stocks that we like even better than Block today with TIKR (It’s free) >>>
Zillow (ZG)
- Market Cap: $16 billion
- Industry: Real Estate Management and Development
- Analyst Upside: 25%
- P/E Ratio: 32
Company Overview: Zillow is a leading real estate platform that helps users buy, sell, rent, and finance homes through its suite of consumer-facing apps and tools.
Business Strategy: Zillow focuses on driving real estate transaction volume by attracting users to its platform and monetizing through agent advertising, mortgage origination, and other home-related services.
Why lower interest rates help:
- Housing market activity: Zillow’s core business depends on real estate transaction volume. Lower mortgage rates make homes more affordable and boost buyer demand.
- Ad revenue from agents: More home-buying means agents spend more on leads and promotions, which is good for Zillow’s Premier Agent segment.
- Longer-term growth bets: Lower rates support higher valuations for Zillow’s tech-focused bets like Zillow Home Loans and potential new initiatives.
Analyze stocks like Zillow Group quicker with TIKR >>>
TIKR Takeaway
With interest rates easing and economic uncertainty still in the mix, investors are keeping a close eye on rate-sensitive stocks.
These picks could have room to run if interest rates fall, but as always, it’s important to buy good businesses with good economics that you understand.
- Looking for stocks with long-term growth potential? Browse TIKR’s stock screener to find the best stocks to buy today.
- Already love the stocks you own? Get real-time news and in-depth stock insights when you add your holdings to your watchlist on TIKR.
- Want to stay ahead? TIKR’s analysts’ estimates give you 5 years of Wall Street forecasts so you can feel confident in the stocks you invest in.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
