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Vaccine positivity and stimulus hope have driven the market to new highs since it began its resurgence at the start of November. These trends have kicked into high gear more recently, as healthcare workers in the U.S. began to receive Pfizer’s Covid-19 vaccine on Monday.
Wall Street and most people around the world hope the vaccine will help economies return to normal and allow people to return to the hardest-hit areas that require close human contact. The vaccine progress helped spread the market’s rally far beyond the pandemic winners in November. And this trend could continue as we head into 2021 if all goes as planned.
Outside of the more speculative and hopeful factors, the earnings picture continues to strengthen. And investors must always remember that the low interest rate environment in the U.S. and in many parts of the world is poised to help lift stocks, as Wall Street is forced to take on more risk in a low yield environment.
The bullish picture for next year is not that hard to paint. Nonetheless, it might be prudent to wait a bit before diving into stocks that require tons of person-to-person contact. Despite the recent strength of beat-down spaces and cyclicals, technology is likely going to dominate our lives and the market for decades to come.
With this in mind, here are three stocks from the broader tech sector that are trading for under $25 a share that investors might want to consider buying for 2021…
Sonos is one of the preeminent home audio companies that specializes in wireless and multi-room sound systems. Its speakers and sound systems are often compared to Bose in terms of quality and price. Sonos speakers are certainly not what many would consider cheap, but they are still rather affordable considering the quality and important role they play in people’s homes. Its base-line smart speaker starts at $199, while its four-system surround sound offerings can cost up to $1,900.
Sonos offers sleek and simple designs in both black and white and it has thrived in a crowded market that includes tech titans like Apple (AAPL - Free Report) . The company also announced in November its new ad-free, HD streaming tier of its streaming radio service. Sonos Radio HD costs $7.99 a month and aims to compete against Spotify (SPOT - Free Report) , Apple Music, and countless other offerings such as Amazon (AMZN - Free Report) Music. And Wall Street has started tuning in again, as the company benefits from the stay-at-home environment.
Sonos posted blowout Q4 FY20 results on November 18, with sales up 16%. Over the course of the year, the firm’s total households jumped 20% to 10.9 million, with listening hours up 33%. More importantly, the firm raised its outlook. Zacks estimates call for its FY21 revenue to jump over 11% to $1.5 billion, with FY22 projected to come in another 9.3% higher. These would top FY20’s 5% sales growth and stack up well against FY19’s 10.9%. SONO is also expected to soar from an adjusted loss of -$0.18 a share to +$0.88, with FY22 set to climb another 22%.
Analysts raced to up their estimates after the speaker firm’s Q4 report that helped the stock soar roughly 30% in one day. Sonos is a Zacks Rank #2 (Buy) at the moment that rocks “A” grades for Growth and Momentum in our Style Scores system. SONO, which went public in 2018, is now up 45% in 2020 and it recently surpassed its early trading highs. And investors should note that Sonos announced a $50 million repurchase program last month, after it completed its previous round of buybacks in Q4.
Dropbox is a cloud storage company that has expanded beyond file-hosting into what it calls a collaboration platform that aims to create a “more enlightened way of working.” That is a fancy way of saying it tries to provide new offerings for a digital-focused workplace that often requires more than email. The company competes in the broader cloud-storage and collaboration space against the likes of Google (GOOGL - Free Report) and Microsoft .
Dropbox topped our Q3 earnings and revenues estimates in early November, with sales up 14% and paying users up around 9% from the year-ago period to 15.25 million. Meanwhile, its gross margin climbed from around 75% to 79%. And the firm has now beat our adjusted earnings estimates by an average of 25% in the trailing four quarters. Plus, its longer-term earnings outlook has turned far more positive since its third quarter report. This helps DBX earn a Zacks Rank #2 (Buy) at the moment.
The stock also holds an “A” grade for Growth in our Style Scores system and five of the six brokerage recommendations Zacks has for DBX come in at a “Strong Buy” at the moment. Zacks estimates call for its adjusted FY20 EPS to surge 76% to $0.88 a share on 15% higher sales that would see it hit $1.9 billion. Dropbox is then projected to see its earnings climb another 14% next year on 11% better revenue.
Going forward, Wall Street hopes that DBX will be able to convert more of its roughly 600 million registered users around the world into paying customers. That said, shares of Dropbox have surged 30% in the last month and are now up 33% in the past year. Despite the run, the stock sits 40% off its all-time highs that it hit relatively early on in its days on the public market in 2018.
Therefore, investors might want to consider taking a chance on the recently resurgent cloud-focused storage firm that’s also a play on the remote work world that could be here for longer than expected even with a vaccine, especially in major cities.
Glu Mobile
Prior Close: $9.60 USD
Glu Mobile is prepared to grow for years as people around the world spend more time glued to their smartphones. Glu’s mobile gaming portfolio features Deer Hunter, Kim Kardashian: Hollywood, MLB Tap Sports Baseball, Disney Sorcerer’s Arena (DIS - Free Report) , and other popular titles. More broadly, the mobile space plays a pivotal role in the growth of the broader gaming industry that is projected to jump from $159 billion in 2020 to over $200 billion by 2023. For instance, mobile is projected to account for roughly 50% of the market compared to console’s 28% and PC’s 25%.
Glu topped our earnings estimates by roughly 60% in early November, with sales up 48% to a company record $158.5 million. Zacks estimates call for its fiscal 2020 sales to climb 31% to $556 million, with another 11% expansion projected in FY21. Meanwhile, the mobile gaming firm’s adjusted earnings are expected to skyrocket 141% this year and another 34% next year. And Glu’s positive earnings revisions help it hold a Zacks Rank #1 (Strong Buy) right now.
Furthermore, GLUU earns an “A” grade for Growth and 10 of the 11 brokerage recommendations Zacks has for the stock come in at a “Strong Buy.” Meanwhile, its Toy -Games-Hobbies industry that includes everyone from Activision Blizzard to Mattel (MAT - Free Report) rests in the top 16% of our over 250 Zacks industries.
Shares of Glu have jumped 60% in the last year to more than double its industry’s average climb, which includes a 30% run since the start of November. Despite this strong stretch, GLUU sits 12% below its 2019 highs. On top of that, it trades at a solid discount against its industry at 2.6X forward 12-month sales vs. 6.1X.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
3 Cheap Tech Stocks Under $25 to Buy for 2021
Vaccine positivity and stimulus hope have driven the market to new highs since it began its resurgence at the start of November. These trends have kicked into high gear more recently, as healthcare workers in the U.S. began to receive Pfizer’s Covid-19 vaccine on Monday.
Wall Street and most people around the world hope the vaccine will help economies return to normal and allow people to return to the hardest-hit areas that require close human contact. The vaccine progress helped spread the market’s rally far beyond the pandemic winners in November. And this trend could continue as we head into 2021 if all goes as planned.
Outside of the more speculative and hopeful factors, the earnings picture continues to strengthen. And investors must always remember that the low interest rate environment in the U.S. and in many parts of the world is poised to help lift stocks, as Wall Street is forced to take on more risk in a low yield environment.
The bullish picture for next year is not that hard to paint. Nonetheless, it might be prudent to wait a bit before diving into stocks that require tons of person-to-person contact. Despite the recent strength of beat-down spaces and cyclicals, technology is likely going to dominate our lives and the market for decades to come.
With this in mind, here are three stocks from the broader tech sector that are trading for under $25 a share that investors might want to consider buying for 2021…
Sonos (SONO - Free Report)
Prior Close: $22.67 USD
Sonos is one of the preeminent home audio companies that specializes in wireless and multi-room sound systems. Its speakers and sound systems are often compared to Bose in terms of quality and price. Sonos speakers are certainly not what many would consider cheap, but they are still rather affordable considering the quality and important role they play in people’s homes. Its base-line smart speaker starts at $199, while its four-system surround sound offerings can cost up to $1,900.
Sonos offers sleek and simple designs in both black and white and it has thrived in a crowded market that includes tech titans like Apple (AAPL - Free Report) . The company also announced in November its new ad-free, HD streaming tier of its streaming radio service. Sonos Radio HD costs $7.99 a month and aims to compete against Spotify (SPOT - Free Report) , Apple Music, and countless other offerings such as Amazon (AMZN - Free Report) Music. And Wall Street has started tuning in again, as the company benefits from the stay-at-home environment.
Sonos posted blowout Q4 FY20 results on November 18, with sales up 16%. Over the course of the year, the firm’s total households jumped 20% to 10.9 million, with listening hours up 33%. More importantly, the firm raised its outlook. Zacks estimates call for its FY21 revenue to jump over 11% to $1.5 billion, with FY22 projected to come in another 9.3% higher. These would top FY20’s 5% sales growth and stack up well against FY19’s 10.9%. SONO is also expected to soar from an adjusted loss of -$0.18 a share to +$0.88, with FY22 set to climb another 22%.
Analysts raced to up their estimates after the speaker firm’s Q4 report that helped the stock soar roughly 30% in one day. Sonos is a Zacks Rank #2 (Buy) at the moment that rocks “A” grades for Growth and Momentum in our Style Scores system. SONO, which went public in 2018, is now up 45% in 2020 and it recently surpassed its early trading highs. And investors should note that Sonos announced a $50 million repurchase program last month, after it completed its previous round of buybacks in Q4.
Dropbox (DBX - Free Report)
Prior Close: $23.52 USD
Dropbox is a cloud storage company that has expanded beyond file-hosting into what it calls a collaboration platform that aims to create a “more enlightened way of working.” That is a fancy way of saying it tries to provide new offerings for a digital-focused workplace that often requires more than email. The company competes in the broader cloud-storage and collaboration space against the likes of Google (GOOGL - Free Report) and Microsoft .
Dropbox topped our Q3 earnings and revenues estimates in early November, with sales up 14% and paying users up around 9% from the year-ago period to 15.25 million. Meanwhile, its gross margin climbed from around 75% to 79%. And the firm has now beat our adjusted earnings estimates by an average of 25% in the trailing four quarters. Plus, its longer-term earnings outlook has turned far more positive since its third quarter report. This helps DBX earn a Zacks Rank #2 (Buy) at the moment.
The stock also holds an “A” grade for Growth in our Style Scores system and five of the six brokerage recommendations Zacks has for DBX come in at a “Strong Buy” at the moment. Zacks estimates call for its adjusted FY20 EPS to surge 76% to $0.88 a share on 15% higher sales that would see it hit $1.9 billion. Dropbox is then projected to see its earnings climb another 14% next year on 11% better revenue.
Going forward, Wall Street hopes that DBX will be able to convert more of its roughly 600 million registered users around the world into paying customers. That said, shares of Dropbox have surged 30% in the last month and are now up 33% in the past year. Despite the run, the stock sits 40% off its all-time highs that it hit relatively early on in its days on the public market in 2018.
Therefore, investors might want to consider taking a chance on the recently resurgent cloud-focused storage firm that’s also a play on the remote work world that could be here for longer than expected even with a vaccine, especially in major cities.
Glu Mobile
Prior Close: $9.60 USD
Glu Mobile is prepared to grow for years as people around the world spend more time glued to their smartphones. Glu’s mobile gaming portfolio features Deer Hunter, Kim Kardashian: Hollywood, MLB Tap Sports Baseball, Disney Sorcerer’s Arena (DIS - Free Report) , and other popular titles. More broadly, the mobile space plays a pivotal role in the growth of the broader gaming industry that is projected to jump from $159 billion in 2020 to over $200 billion by 2023. For instance, mobile is projected to account for roughly 50% of the market compared to console’s 28% and PC’s 25%.
Glu topped our earnings estimates by roughly 60% in early November, with sales up 48% to a company record $158.5 million. Zacks estimates call for its fiscal 2020 sales to climb 31% to $556 million, with another 11% expansion projected in FY21. Meanwhile, the mobile gaming firm’s adjusted earnings are expected to skyrocket 141% this year and another 34% next year. And Glu’s positive earnings revisions help it hold a Zacks Rank #1 (Strong Buy) right now.
Furthermore, GLUU earns an “A” grade for Growth and 10 of the 11 brokerage recommendations Zacks has for the stock come in at a “Strong Buy.” Meanwhile, its Toy -Games-Hobbies industry that includes everyone from Activision Blizzard to Mattel (MAT - Free Report) rests in the top 16% of our over 250 Zacks industries.
Shares of Glu have jumped 60% in the last year to more than double its industry’s average climb, which includes a 30% run since the start of November. Despite this strong stretch, GLUU sits 12% below its 2019 highs. On top of that, it trades at a solid discount against its industry at 2.6X forward 12-month sales vs. 6.1X.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>