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There are many intriguing stocks within the Computer Technology sector. The broader Zacks Tech sector is home to many innovating industries with companies that are expected to see solid growth.
Let’s take a look at two tech stocks that investors may want to consider for growth in their portfolio.
The first stock that sticks out in the Computer Technology Sector is PDF Solutions (PDFS - Free Report) . PDF Solutions assists semiconductor companies with improving the yield and performance of manufactured integrated circuits by providing infrastructure to better integrate the design and manufacturing process.
PDF Solutions earnings are expected to swing from an adjusted loss of -$0.08 per share in FY21 to +$0.42 a share. Fiscal 2023 earnings are expected to jump another 53%, based on Zacks Estimates.
Top line growth is expected as well, with sales set to jump 25% this year and another 17% in FY23 to $162 million. While the semiconductor industry is seeing a slowdown, companies are relying more on PDFS for its services.
PDFS is down -28% YTD to essentially match the S&P 500’s -25% and underperform its Computer-Services Market’s -20%. However, over the last three years, PDFS is up +75% to outperform the benchmark and crush its industry’s -23%.
Image Source: Zacks Investment Research
PDFS has been on quite the run over the last few years and this year’s cool-down may be a chance for investors to get back in on the stock or add to positions. PDFS Solutions currently trades around $23 a share, nearly 31% off its 52-week highs.
At current levels, PDFS has a P/E of 55.9X. This is above its industry average of 15.8X, but PDFS earnings growth is starting to make the stock trade at a more attractive multiple. Wall Street has also appeared to be okay with paying up for the stock due to the company’s growth prospects.
PDFS is trading well off its decade-high of 439.2X, and currently lands a Zacks Rank #3 (Hold). While its Computer-Services Industry is in the bottom 40%, the average Zacks Price Target suggests 35% upside from current levels.
Another stock that might catch investors’ attention at current levels is DeceisonPoint Systems (DPSI - Free Report) . The company provides enterprise mobility and radio frequency identification technologies. DecisionPoint sells and installs mobile devices, software, and related bar coding equipment.
Outside of its low stock price, DecisionPoint Systems is starting to look attractive because of the company’s growth. This also landed the company’s stock a spot on the New York Stock Exchanges after previously trading as an OTC security.
DPSI’s -42% YTD drop has underperformed the S&P 500 and is near its Computer Software Market’s -35% decline. However, DPSI is still up +79% over the year which has also outperformed the benchmark and its Zacks Subindustry’s -30%. DPSI still trades 78% above its opening price on the NYSE of $3.70 a share on 10/12/21.
Image Source: Zacks Investment Research
DPSI currently lands a Zacks Rank #1 (Strong Buy) with earnings estimate revisions up for this year and FY23. According to Zacks Estimates, DPSI earnings are projected to jump 300% at $0.24 a share in 2022. Fiscal 2023 earnings are expected to rise another 21%. DecisionPoint’s sales are projected to be up 34% this year and another 6% in FY23 to $94 million.
Trading around $7 a share DPSI has a forward P/E of 29.2X. This is higher than the industry average of 21.9X, but DPSI’s valuation is becoming much more reasonable thanks to its earnings growth. DPSI is trading much lower than its decade-high of 122X and near the median of 25.9X.
From a valuation standpoint, the risk to reward is becoming favorable for investors to get in on the somewhat early stages of the stocks growth. DPSI is still well above its opening price last year and the YTD decline could be an opportunity for investors to add positions.
DPSI’s Computer-Software Industry is in the top 35% of over 250 Zacks Industries and the stock carries an overall “A” VGM grade. The average Zacks Price Target offers 7% upside from current levels.
Bottom Line
In the midst of the current economic uncertainty, there will certainly be many tech stock options for investors to choose from. The sector is home to multiple booming industries and many of these tech stocks may become oversold. This year’s bear market could certainly turn out to be a buying opportunity for investors.
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Buy these Under-the-Radar Tech Stocks?
There are many intriguing stocks within the Computer Technology sector. The broader Zacks Tech sector is home to many innovating industries with companies that are expected to see solid growth.
Let’s take a look at two tech stocks that investors may want to consider for growth in their portfolio.
PDF Solutions (PDFS - Free Report)
The first stock that sticks out in the Computer Technology Sector is PDF Solutions (PDFS - Free Report) . PDF Solutions assists semiconductor companies with improving the yield and performance of manufactured integrated circuits by providing infrastructure to better integrate the design and manufacturing process.
PDF Solutions earnings are expected to swing from an adjusted loss of -$0.08 per share in FY21 to +$0.42 a share. Fiscal 2023 earnings are expected to jump another 53%, based on Zacks Estimates.
Top line growth is expected as well, with sales set to jump 25% this year and another 17% in FY23 to $162 million. While the semiconductor industry is seeing a slowdown, companies are relying more on PDFS for its services.
PDFS is down -28% YTD to essentially match the S&P 500’s -25% and underperform its Computer-Services Market’s -20%. However, over the last three years, PDFS is up +75% to outperform the benchmark and crush its industry’s -23%.
Image Source: Zacks Investment Research
PDFS has been on quite the run over the last few years and this year’s cool-down may be a chance for investors to get back in on the stock or add to positions. PDFS Solutions currently trades around $23 a share, nearly 31% off its 52-week highs.
At current levels, PDFS has a P/E of 55.9X. This is above its industry average of 15.8X, but PDFS earnings growth is starting to make the stock trade at a more attractive multiple. Wall Street has also appeared to be okay with paying up for the stock due to the company’s growth prospects.
PDFS is trading well off its decade-high of 439.2X, and currently lands a Zacks Rank #3 (Hold). While its Computer-Services Industry is in the bottom 40%, the average Zacks Price Target suggests 35% upside from current levels.
DecisionPoint Systems (DPSI - Free Report)
Another stock that might catch investors’ attention at current levels is DeceisonPoint Systems (DPSI - Free Report) . The company provides enterprise mobility and radio frequency identification technologies. DecisionPoint sells and installs mobile devices, software, and related bar coding equipment.
Outside of its low stock price, DecisionPoint Systems is starting to look attractive because of the company’s growth. This also landed the company’s stock a spot on the New York Stock Exchanges after previously trading as an OTC security.
DPSI’s -42% YTD drop has underperformed the S&P 500 and is near its Computer Software Market’s -35% decline. However, DPSI is still up +79% over the year which has also outperformed the benchmark and its Zacks Subindustry’s -30%. DPSI still trades 78% above its opening price on the NYSE of $3.70 a share on 10/12/21.
Image Source: Zacks Investment Research
DPSI currently lands a Zacks Rank #1 (Strong Buy) with earnings estimate revisions up for this year and FY23. According to Zacks Estimates, DPSI earnings are projected to jump 300% at $0.24 a share in 2022. Fiscal 2023 earnings are expected to rise another 21%. DecisionPoint’s sales are projected to be up 34% this year and another 6% in FY23 to $94 million.
Trading around $7 a share DPSI has a forward P/E of 29.2X. This is higher than the industry average of 21.9X, but DPSI’s valuation is becoming much more reasonable thanks to its earnings growth. DPSI is trading much lower than its decade-high of 122X and near the median of 25.9X.
From a valuation standpoint, the risk to reward is becoming favorable for investors to get in on the somewhat early stages of the stocks growth. DPSI is still well above its opening price last year and the YTD decline could be an opportunity for investors to add positions.
DPSI’s Computer-Software Industry is in the top 35% of over 250 Zacks Industries and the stock carries an overall “A” VGM grade. The average Zacks Price Target offers 7% upside from current levels.
Bottom Line
In the midst of the current economic uncertainty, there will certainly be many tech stock options for investors to choose from. The sector is home to multiple booming industries and many of these tech stocks may become oversold. This year’s bear market could certainly turn out to be a buying opportunity for investors.