Technology is among the most shattered sectors in the context of a larger market downturn this year, due to increasing fears of a recession. Technology Select Sector SPDR Fund It aims to offer performance results in investment that, prior to expenses, usually correspond to the performance of the yield and price that are reflected in technology. Technology Select Sector Index, has experienced a loss of around 28 percent of its value in the in the year to date (YTD).
But, this decline in the overall equity market has resulted in a huge adjustment in several tech companies their stock prices. These companies were believed to be overvalued by many at the height of the technology sector in 2021. In the wake of this correction, a number of tech stocks are trading at a significant discount to their 52-week peak despite their solid fundamentals.
Furthermore the future growth prospects of tech firms are promising due to the continuing digital revolution. The rapid adoption of 5G technologythe next-generation wireless revolution will drive further growth. Beyond that Artificial Intelligence (AI) blockchain, AI, Internet of Things (IoT) autonomous vehicles, Virtual Reality/Augmented Reality and wearables present huge growth opportunities.
We believe that Zscaler, Inc. ZS, Pure Storage, Inc. PSTG, Coupa Software Incorporated COUP and RingCentral, Inc. RNG are among the worst-beaten companies in the technology sector at the moment. Due to their solid fundamentals and their solid outlook it is logical to include these stocks in your portfolio.
Why Should You Invest in These Stocks?
In the midst of financial turmoil It is a wise decision to invest in solid growth firms since they have a stable financial position and are earning profit in markets that are established. These stocks, thanks to their solid foundations, permit investors to protect their money against any economic slump. Furthermore, these fundamentally solid stocks will likely outshine yet again when the current macro headwinds ease and market sentiment improves.
Along with having solid foundations, the long-term growth in earnings for these stocks is more than 10 percent. They also possess an excellent combination of an A or B Growth Score or B, and an Zacks 1st Rank (Strong to Buy) and #3 (Buy).
Based on Zacks the proprietary method the stocks that have this positive combination provide solid investment opportunities.
In addition the stocks are trading at a significant discount to their 52-week average and are accessible at attractive prices.
4 Tech Stocks to Bet On
Pure Storage offers flash solutions with software that are incredibly efficient and cloud-capable to customers. It is known as the first to introduce in an Evergreen Storage business model of technology and hardware innovation as well as support and maintenance. The model is able to eliminate the three-year refresh cycle that is common to older storage systems.
Pure Storage is benefiting from the growing popularity of flash storage, especially in large enterprises due to the inherent advantages like speed (i.e. responsiveness, speed) along with portability, effectiveness and reliability over traditional storage systems. The constant growth in data is now a major reason in the development of storage solutions using flash. The strength of FlashArray and FlashBlade businesses , as and strong growth potential in the data-driven industries of AI as well as machine-learning will bode well.
PSTG currently has an Zacks Rank #1 and has an A-grade Growth Score. The shares of the company have fallen 17.8 percent YTD, and are trading 27.8 percent lower than the 52-week record high of $36.71 that was reached on March 28 2022. Additionally, the stock trades at a forward price-to-sales of 2.6X as opposed to its three-year peak of 4.27X. You can find the entire list of the current Zacks #1 Stocks here.
The Zacks Consensus Estimate of Pure Storage’s fiscal year 2023 earnings has increased up to $1.18 per share, up from 95 cents during the past 30 days, suggesting an increase in year-over-year earnings of 63.9 percent. The consensus figure is adjusted upwards by 20.7 percent in the range of $1.34 per share in the last 30 days, suggesting year-over year growth of 13.1 percent. The long-term growth rate for earnings of the company is set at 35.5 percent.
Zscaler is among the top providers for cloud-based security services. It provides a wide range of enterprise-grade security solutions, including Web security Internet security, anti-virus security, firewalls, vulnerability management, and controls over user activities in cloud computing, mobile as well as IoT environments.
Zscaler has been gaining from the increasing demand for cybersecurity solutions due to the flood of breaches of data. The growing demand for security with privileged access for cloud migration and digital transformation strategies is an important growth engine. Zscaler’s strong portfolio strengthens its competitive edge and assists in to increase the number of users. In addition, recently completed acquisitions by Smokescreen as well as Trustdome will strengthen Zscaler’s portfolio.
ZS currently has an Zacks rank of #2 and an A-grade Growth Score. ZS shares have fallen 49.5 percent YTD, and are trading 56.8 percent lower than the 52-week highest of $376.11 which was achieved on the 19th of November 2021. The stock is trading on a 1-year future rate of price-to-sales of 14.82X in comparison to its 3-year highest of 51.19X.
The Zacks Consensus Estimate of Zscaler’s fiscal 2023 earnings have increased up to $1.17 per share, up from $1.03 over the last 30 days, which indicates an increase in year-over-year earnings of 69.8 percent. The consensus figure is adjusted up by seven cents, in the direction of $1.67 per share in the last 30 days, which suggests year-over year growth of 43 percent. The rate of growth in earnings over the long term for the company is set at 45.1 percent.
Coupa Software is one of the most prominent suppliers of Business Spend Management (BSM) solutions. Coupa Software is continually improving its cloud-based platform basis of constant product innovation to give customers greater information about their spending, aid in reducing supply chain risk and improve their ability to adjust to changing the spending patterns of its customers.
Coupa Software is benefitting from the widespread use of Coupa Pay services along with cloud-based BSM solutions. The momentum for Coupa Advantage Express, Strategic Sourcing, Risk Assess and Source Together solutions is likely to increase revenue. In its most recent second quarter results, the firm has increased its revenue projections for fiscal 2023 based on strong demand growth.
COUP currently has the Zacks Rank 2 and growth score of B. COUP shares have fallen 60.7 percent over the past year as of today. They are trading76.1 percentage lower than the 52-week highest of $259.90 which was achieved on the 20th of October and 2021. Additionally, the stock trades on a 1-year future rate of price-to-sales of 5X, compared to the three-year peak of 46.82X.
The Zacks Consensus Estimate of Coupa Software’s fiscal year 2023 earnings has increased by 76 percent to 44 cents a share in the last 30 days. In fiscal 2024 the consensus estimate of earnings was adjusted upwards by 14 cents to 70 cents per share in the last 30 days, suggesting year-over year growth of 62.1 percent. The rate of growth in earnings over the long term in the market is set at 22.6 percent.
RingCentral has been the leading provider for Unified Communications as a Service (UCaaS) solutions, which include global cloud-based enterprise communications collaboration, collaboration, and customer engagement solutions that allow enterprises to communicate, collaborate and collaborate. Cloud-based business communications or collaboration services are made to give one user identity across multiple devices and locations that include tablets, smartphones as well as desktop phones, computers and tablets. This makes remote work and collaboration a breeze.
RingCentral has seen significant growth in subscription revenue due to the improved hybrid workplace because of the COVID-19 pandemic. The company’s growing global presence is an important factor. A solid partnership base with such companies as Microsoft, AT&T, BT, Atos and Vodafone is expected to be major factor.
RNG currently has the Zacks Rank of #2 and an A-grade Growth Score. The company’s shares have fallen 77.8 percent YTD. They have been trading 86.8 percent lower than its 52-week high of $315 that was reached on the 10th of November 2021. The stock trades in a 1-year future price to sales of 1.71X as compared to its three-year highest of 27.24X.
The Zacks Consensus estimate for RingCentral’s earnings for 2022 has risen 7 cents, or seven percent to $1.93 per share in the last 60 days, which translates to an increase in year-over-year earnings of 44 percent. In 2023, the consensus estimate for earnings has been raised by a penny , to $2.51 per share in the last 30 days, which indicates year-over-year growth of 29.8 percent. The long-term growth rate for earnings of the company is estimated at 34.7 percent.