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Buy 5 High-Flying Technology Services Stocks With Room to Grow
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The U.S. business services space has been benefiting from the strong fundamentals of the economy. Despite facing a record-high interest rate and extremely tight monetary control by the Fed, this sector has provided double-digit returns in the past year.
Within this sector, the technology services industry is mature, with demand for services in good shape. Revenues, income and cash flows are anticipated to gradually reach the pre-pandemic levels, aiding most industry players to pay out stable dividends.
Growth in the technology services industry has increased the number of remote workers in the wake of the pandemic. In this era of digital transformation, enterprises are actively seeking a common ground between on-premise and cloud infrastructure that will enable them to provide flexible and easy-to-adopt hybrid solutions.
The business software industry is gaining from robust demand for multi-cloud-enabled software solutions, given the ongoing transition from legacy platforms to modern cloud-based infrastructure.
The industry players are incorporating artificial intelligence and tools like machine learning in their applications to make the same more dynamic and result-oriented. Elevated demand for enterprise software, which is ramping up productivity and improving the decision-making process, is a key catalyst.
In the past year, the Zacks defined Business Services sector has provided a double-digit return of 32.3% and the Technology Services industry has rallied an impressive 64.4%. Year to date, the Business Services sector and the Technology services industry have advanced 10% and 15.9%, respectively. Since the Technology Services industry ranks within the top 35% of Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.
Our Top Picks
We have narrowed our search to five technology services stocks that have popped in the past month and have solid upside left. These stocks have seen positive earnings estimate revisions in the past 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
AppLovin Corp. (APP - Free Report) is engaged in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. APP provides a technology platform that enables developers to market, monetize, analyze and publish their apps.
Zacks Rank #1 AppLovin has an expected revenue and earnings growth rate of 23.2% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 59% over the past 30 days. The stock price of APP has jumped 34.6% in the past month.
Duolingo Inc. (DUOL - Free Report) operates as a mobile learning platform in the United States, China, the United Kingdom, and internationally. DUOL offers courses in 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese, and Chinese through the Duolingo app. DUOL also provides a digital language proficiency assessment exam.
Zacks Rank #1 Duolingo has an expected revenue and earnings growth rate of 36.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 50.5% over the past 30 days. The stock price of DUOL has surged 19% in the past month.
Block Inc. (SQ - Free Report) is an online digital and mobile payment platform for consumers and merchants and is the parent company of Square and Cash App. The users of the Cash App can buy, sell, send and receive Bitcoin. In addition, SQ’s decentralized tbd platform allows developers to build decentralized finance applications that run on programmable blockchains. SQ is also one of the largest Bitcoin investors.
Zacks Rank #1 Block has an expected revenue and earnings growth rate of 12.8% and 68.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past seven days. The stock price of DOCU has climbed 27.1% in the past month.
Paymentus Holdings Inc. (PAY - Free Report) provides cloud-based bill payment technology and solutions. PAY offers electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management to billers and financial institutions through a software-as-a-service technology platform. PAY serves utility, financial service, insurance, government, telecommunication, and healthcare industries.
Zacks Rank #2 Paymentus Holdings has an expected revenue and earnings growth rate of 19.5% and 9.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 25% over the past 30 days. The stock price of PAY has soared 52.1% in the past month.
DocuSign Inc. (DOCU - Free Report) provides a cloud-based, e-signature software platform in the United States and internationally that enables businesses to prepare, execute and act on agreements digitally. DOCU’s top line is significantly benefiting from continued customer demand for eSignature, its anchor product.
Despite this rising demand, the market for eSignature remains largely untapped and this keeps DocuSign in a position to expand eSignature around the world. DCU remains focused on continuously acquiring customers, improving its offerings and expanding internationally.
Zacks Rank #2 DocuSign has an expected revenue and earnings growth rate of 5.6% and 6.7%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for current-year earnings has improved 11.6% over the past seven days. The stock price of DOCU has appreciated 16.3% in the past month.
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Buy 5 High-Flying Technology Services Stocks With Room to Grow
The U.S. business services space has been benefiting from the strong fundamentals of the economy. Despite facing a record-high interest rate and extremely tight monetary control by the Fed, this sector has provided double-digit returns in the past year.
Within this sector, the technology services industry is mature, with demand for services in good shape. Revenues, income and cash flows are anticipated to gradually reach the pre-pandemic levels, aiding most industry players to pay out stable dividends.
Growth in the technology services industry has increased the number of remote workers in the wake of the pandemic. In this era of digital transformation, enterprises are actively seeking a common ground between on-premise and cloud infrastructure that will enable them to provide flexible and easy-to-adopt hybrid solutions.
The business software industry is gaining from robust demand for multi-cloud-enabled software solutions, given the ongoing transition from legacy platforms to modern cloud-based infrastructure.
The industry players are incorporating artificial intelligence and tools like machine learning in their applications to make the same more dynamic and result-oriented. Elevated demand for enterprise software, which is ramping up productivity and improving the decision-making process, is a key catalyst.
In the past year, the Zacks defined Business Services sector has provided a double-digit return of 32.3% and the Technology Services industry has rallied an impressive 64.4%. Year to date, the Business Services sector and the Technology services industry have advanced 10% and 15.9%, respectively. Since the Technology Services industry ranks within the top 35% of Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.
Our Top Picks
We have narrowed our search to five technology services stocks that have popped in the past month and have solid upside left. These stocks have seen positive earnings estimate revisions in the past 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
AppLovin Corp. (APP - Free Report) is engaged in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. APP provides a technology platform that enables developers to market, monetize, analyze and publish their apps.
Zacks Rank #1 AppLovin has an expected revenue and earnings growth rate of 23.2% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 59% over the past 30 days. The stock price of APP has jumped 34.6% in the past month.
Duolingo Inc. (DUOL - Free Report) operates as a mobile learning platform in the United States, China, the United Kingdom, and internationally. DUOL offers courses in 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese, and Chinese through the Duolingo app. DUOL also provides a digital language proficiency assessment exam.
Zacks Rank #1 Duolingo has an expected revenue and earnings growth rate of 36.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 50.5% over the past 30 days. The stock price of DUOL has surged 19% in the past month.
Block Inc. (SQ - Free Report) is an online digital and mobile payment platform for consumers and merchants and is the parent company of Square and Cash App. The users of the Cash App can buy, sell, send and receive Bitcoin. In addition, SQ’s decentralized tbd platform allows developers to build decentralized finance applications that run on programmable blockchains. SQ is also one of the largest Bitcoin investors.
Zacks Rank #1 Block has an expected revenue and earnings growth rate of 12.8% and 68.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past seven days. The stock price of DOCU has climbed 27.1% in the past month.
Paymentus Holdings Inc. (PAY - Free Report) provides cloud-based bill payment technology and solutions. PAY offers electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management to billers and financial institutions through a software-as-a-service technology platform. PAY serves utility, financial service, insurance, government, telecommunication, and healthcare industries.
Zacks Rank #2 Paymentus Holdings has an expected revenue and earnings growth rate of 19.5% and 9.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 25% over the past 30 days. The stock price of PAY has soared 52.1% in the past month.
DocuSign Inc. (DOCU - Free Report) provides a cloud-based, e-signature software platform in the United States and internationally that enables businesses to prepare, execute and act on agreements digitally. DOCU’s top line is significantly benefiting from continued customer demand for eSignature, its anchor product.
Despite this rising demand, the market for eSignature remains largely untapped and this keeps DocuSign in a position to expand eSignature around the world. DCU remains focused on continuously acquiring customers, improving its offerings and expanding internationally.
Zacks Rank #2 DocuSign has an expected revenue and earnings growth rate of 5.6% and 6.7%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for current-year earnings has improved 11.6% over the past seven days. The stock price of DOCU has appreciated 16.3% in the past month.