With the Nasdaq rebounding nicely in 2023 investors may be on the lookout for tech stocks that have more upside.
To that note, here are two Zacks Computer and Technology sector stocks that could have a nice amount of upside heading into their earnings reports on Thursday, May 4.
Atlassian (TEAM)
Among software companies, Atlassian is intriguing at the moment with a Zacks Rank #2 (Buy) and its Internet-Software Industry in the top 31% of over 250 Zacks industries.
Atlassian is a global leader in the enterprise collaboration and workflow software space that offers a suite of cloud-based software solutions which help organizations collaborate and manage their workforce.
Set to report its fiscal third-quarter earnings on Thursday, Atlassian’s annual top and bottom-line growth is starting to stand out. This is despite Q3 earnings expected to dip -23% YoY at $0.36 per share as increased reinvestments in its systems and infrastructure may weigh on Atlassian’s third-quarter bottom line.
Still, third-quarter sales are forecasted to jump 21% from the prior year quarter at $898.71 million. Further establishing Atlassian’s growth potential is that total sales are projected to climb 24% this year and rise another 20% in FY24 to $4.19 billion.
Even better, while earnings are expected to dip -10% this year Atlassian’s bottom line is projected to stabilize and soar 29% in FY24 at $1.96 per share. Plus, earnings estimate revisions have remained higher over the last quarter.
With Atlassian almost through its fiscal 2023, the prospects for FY24 are looking bright for the software provider that has been public for less than a decade after launching its IPO in 2015.
Dropbox (DBX)
Dropbox is another cloud-focused company that should have more upside as it approaches its first-quarter earnings on Thursday.
Focused on cloud data storage, Dropbox currently sports a Zacks Rank #2 (Buy) and its Internet-Services Industry is in the top 45% of all Zacks industries. Dropbox’s platform enables users to store and share files, photos, videos, songs, and spreadsheets.
The top and bottom line growth of Dropbox is intriguing as well although Q1 earnings are expected to slightly dip -8% from the prior year quarter at $0.35 per share. First-quarter sales are projected to be up 7% at $601.40 million.
Furthermore, total sales are now expected to be up 7% this year and rise another 6% in FY24 to $2.63 billion. More intriguing, earnings are anticipated to rise 8% in FY23 and climb another 17% in FY24 at $2.01 per share. Earnings estimate revisions have started to trend higher in the last week, ahead of Dropbox’s quarterly results.
Dropbox is still a relatively newer tech company that may have more potential ahead after being founded in 2007 and publicly traded since 2008. Shares of DBX have not rebounded like other tech stocks this year but better momentum appears to be on the horizon.
Takeaway
Going into their quarterly reports, Atlassian and Dropbox are two tech stocks that investors will want to watch. As inflation begins to ease and operating conditions stabilize, both company’s prospects continue to brighten and now may be a good time to buy.
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With the Nasdaq rebounding nicely in 2023 investors may be on the lookout for tech stocks that have more upside.
To that note, here are two Zacks Computer and Technology sector stocks that could have a nice amount of upside heading into their earnings reports on Thursday, May 4.
Atlassian (TEAM)
Among software companies, Atlassian is intriguing at the moment with a Zacks Rank #2 (Buy) and its Internet-Software Industry in the top 31% of over 250 Zacks industries.
Atlassian is a global leader in the enterprise collaboration and workflow software space that offers a suite of cloud-based software solutions which help organizations collaborate and manage their workforce.
Set to report its fiscal third-quarter earnings on Thursday, Atlassian’s annual top and bottom-line growth is starting to stand out. This is despite Q3 earnings expected to dip -23% YoY at $0.36 per share as increased reinvestments in its systems and infrastructure may weigh on Atlassian’s third-quarter bottom line.
Still, third-quarter sales are forecasted to jump 21% from the prior year quarter at $898.71 million. Further establishing Atlassian’s growth potential is that total sales are projected to climb 24% this year and rise another 20% in FY24 to $4.19 billion.
Even better, while earnings are expected to dip -10% this year Atlassian’s bottom line is projected to stabilize and soar 29% in FY24 at $1.96 per share. Plus, earnings estimate revisions have remained higher over the last quarter.
With Atlassian almost through its fiscal 2023, the prospects for FY24 are looking bright for the software provider that has been public for less than a decade after launching its IPO in 2015.
Dropbox (DBX)
Dropbox is another cloud-focused company that should have more upside as it approaches its first-quarter earnings on Thursday.
Focused on cloud data storage, Dropbox currently sports a Zacks Rank #2 (Buy) and its Internet-Services Industry is in the top 45% of all Zacks industries. Dropbox’s platform enables users to store and share files, photos, videos, songs, and spreadsheets.
The top and bottom line growth of Dropbox is intriguing as well although Q1 earnings are expected to slightly dip -8% from the prior year quarter at $0.35 per share. First-quarter sales are projected to be up 7% at $601.40 million.
Furthermore, total sales are now expected to be up 7% this year and rise another 6% in FY24 to $2.63 billion. More intriguing, earnings are anticipated to rise 8% in FY23 and climb another 17% in FY24 at $2.01 per share. Earnings estimate revisions have started to trend higher in the last week, ahead of Dropbox’s quarterly results.
Dropbox is still a relatively newer tech company that may have more potential ahead after being founded in 2007 and publicly traded since 2008. Shares of DBX have not rebounded like other tech stocks this year but better momentum appears to be on the horizon.
Takeaway
Going into their quarterly reports, Atlassian and Dropbox are two tech stocks that investors will want to watch. As inflation begins to ease and operating conditions stabilize, both company’s prospects continue to brighten and now may be a good time to buy.
Zacks Reveals ChatGPT "Sleeper" Stock
One little-known company is at the heart of an especially brilliant Artificial Intelligence sector. By 2030, the AI industry is predicted to have an internet and iPhone-scale economic impact of $15.7 Trillion.
As a service to readers, Zacks is providing a bonus report that names and explains this explosive growth stock and 4 other "must buys." Plus more.
Download Free ChatGPT Stock Report Right Now >>
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