Back to top

Image: Bigstock

3 Top Tech Stocks With Impressive Growth Trajectories

Read MoreHide Full Article

2022 was challenging for technology stocks, with many struggling to thrive in the face of the Federal Reserve’s hawkish nature.

Still, following the re-calibration, investors have been presented with opportunities to buy shares of many tech companies at slashed prices.  

And some of them carry firm growth profiles, including Paycom Software (PAYC - Free Report) , Synopsys (SNPS - Free Report) , and SAP SE (SAP - Free Report) .

Below is a chart illustrating the performance of all three stocks over the last year, with the S&P 500 blended in as a benchmark.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition to solid growth profiles, all three have witnessed positive earnings estimate revisions as of late. Let’s take a closer look at each one.

Paycom Software

Paycom offers online payroll services and HR software solutions for businesses of all sizes in order to manage the entire employment life cycle. PAYC carries a Zacks Rank #2 (Buy).

It’s hard to ignore PAYC’s growth trajectory, with the Zacks Consensus EPS Estimate for its current fiscal year (FY22) indicating an improvement of more than 30% Y/Y. And in FY23, the company’s earnings are forecasted to grow a further 23.3%.

Zacks Investment Research
Image Source: Zacks Investment Research

Paycom has been on a solid earnings streak, exceeding both revenue and earnings estimates in nine consecutive quarters. Just in its latest release, the company penciled in a 7.6% EPS beat and reported revenue 2% ahead of expectations.

Zacks Investment Research
Image Source: Zacks Investment Research

Synopsys

Synopsys is a vendor of electronic design automation (EDA) software to the semiconductor and electronics industries, offering a full suite of products used in the logic, synthesis, and functional verification phases of chip design.

Like PAYC, Synopsys has seen its earnings outlook improve as of late, pushing the stock into a Zacks Rank #2 (Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

Consistent growth is the name of the game for Synopsys, as we can see depicted in the chart below. Estimates suggest Y/Y earnings growth of 16% in FY23 and a further 17% in FY24.

Zacks Investment Research
Image Source: Zacks Investment Research

Simply put, Synopsys is no stranger to exceeding quarterly estimates; SNPS has posted better-than-expected revenue and earnings results in 16 consecutive quarters. In the most recently reported quarter, the company registered a sizable 23.2% EPS beat and a marginal revenue surprise.

Zacks Investment Research
Image Source: Zacks Investment Research

SAP SE

SAP SE is one of the world's most prominent independent software vendors and the leading enterprise resource planning (ERP) software provider. Currently, the company sports a favorable Zacks Rank #1 (Strong Buy).

The company’s earnings are forecasted to pull back in its current fiscal year (FY22 ending in December), as seen in the chart below. Still, the growth resumes in a big way for FY23, with the Zacks Consensus EPS Estimate indicating a 21% Y/Y change.

Zacks Investment Research
Image Source: Zacks Investment Research

For those seeking technology exposure paired with income, SAP has that covered; the company’s annual dividend currently yields 1.9%, nicely above its Zacks Computer and Technology sector average.

Impressively, the company’s payout has grown by more than 14% over the last five years.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

2022 was anything but fun for the majority of tech stocks, with a hawkish Federal Reserve weighing heavily on sentiment within the sector all year.

Still, despite all of the negative sentiment, several tech stocks – Paycom Software (PAYC - Free Report) , Synopsys (SNPS - Free Report) , and SAP SE (SAP - Free Report) – have been able to weather the storm better than most and carry favorable growth profiles.

In addition, all three have witnessed positive earnings estimate revisions over the last several months, indicating that their near-term business outlooks are fruitful.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


SAP SE (SAP) - free report >>

Synopsys, Inc. (SNPS) - free report >>

Paycom Software, Inc. (PAYC) - free report >>

Published in