If you're looking for upside potential, tech stocks are the best place to buy. Also, if you are looking for big profits, you should consider discount boxes in the innovation sector.
I don't think that last phrase is a derogatory term. Rather, think of it like receiving her 50% off coupon for a famous Italian designer. Of course I'll take that deal. We're not just talking about discounts at hidden big box stores. No, we're talking about attractive technology companies that just happen to be trading below key fundamental metrics.
In other words, it provides innovators with a solid framework for achieving solid returns. But are innovators being discounted? That's even better. Here are some discount tech stocks to buy.
Go Daddy (GDDY)
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Unconventional ideas in the field of technology, go daddy (New York Stock Exchange:GDDY) In technical terms, it operates under a software infrastructure ecosystem. In fact, we know that GoDaddy is one of the top website and e-commerce platform builders. Not only that, but it's also one of the easiest tech stocks to buy. First, notice that year-to-date performance is up 22%.
Basically, I'm excited about GoDaddy because the gig economy is booming. According to some projections, the sector could be worth nearly $93 billion by 2031. This means that the average annual growth rate from 2021 will be 20%. No wonder analysts consider GDDY a consensus buy. The average price target of $131 is modest, but it could rise to the high end of the forecast at $150.
Looking at the company's outstanding Q4 earnings report, earnings per share were $7.85. At the time, experts predicted EPS of only $1.04. For the current fiscal year, the company expects revenue of $4.52 billion. If that happens, it would represent a 6.3% growth rate from last year's circulation of $4.25 billion.
Again, thanks to the gig economy, I think this is an achievable goal.
TE Connectivity (TEL)
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It operates under the electronic components segment. TE Connectivity (New York Stock Exchange:telephone number) manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, Asia Pacific, and the Americas. Additionally, the company operates in his three segments: Transportation Solutions, Industrial Solutions, and Communication Solutions. TE must remain relevant amidst various market challenges by providing a myriad of critical services.
Admittedly, TEL isn't the most appealing idea to buy among tech stocks. However, it is very consistent and reliable. Over the last year, the company has delivered an average positive surprise of 4.93%. It exceeded its quarterly EPS target all four times. Analysts expect EPS for the current fiscal year to be $7.58. If so, it would be a significant improvement over last year's result of $6.74.
To be fair, experts only expect very modest growth in sales, with sales of $16.12 billion. The company's sales last year were $16.03 billion. However, it's also important to note that TE Connectivity's forward dividend yield is 1.8%. Therefore, it provides the perfect balance for buying tech stocks.
International Money Express (IMXI)
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Based in Miami, Florida, international money express (NASDAQ:IMXI) is doing business in the software infrastructure field. International Money, together with its subsidiaries, operates as an omnichannel money transfer services company in the United States and many other parts of the world. Since the beginning of the year, IMXI is up just over 2%. It has fallen almost 10% over the past 52 weeks.
Indeed, this company ranks among the riskiest ideas to buy in tech stocks. However, the global remittance market could reach a valuation of $1.31 trillion by 2029. If this happens, the CAGR from 2023 will be 5.78%. It could rise further if international money grabs a piece of the pie.
Admittedly, the company suffered some tough results, including disappointing second quarter results. However, overall, his average positive expected return for fiscal year 2023 was 3.4%. For fiscal year 2024, analysts expect EPS of $2.19 and revenue of $691.17 million. Both statistics represent an improvement compared to last year's EPS of $1.95 on revenue of $658.74 million.
Notably, IMXI trades at just 10.19 times forward earnings, making it an interesting idea for an undervalued tech stock.
STMicroelectronics (STM)
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We are doing business in the semiconductor field, STMicroelectronics (New York Stock Exchange:STM) designs, develops, manufactures and markets specialty computer chip products worldwide. We are particularly well-received for our automotive integrated circuits (ICs), discrete products, and power transistor products. STM stocks could potentially enjoy downwind benefits as the broader mobility space makes significant progress.
Basically, what I appreciate about ST is that they are stagehands for technology. Frankly, that's not the main attraction. However, it is essential for the show to run smoothly. Even better, you can afford to accommodate larger dogs. After a fiasco in the second quarter of last year, FY2023 is a strong performance. The average positive unexpected return was 8.9%.
Analysts expect sales of $16.15 billion in fiscal 2024. Granted, this is a far cry from last year's sales of $17.29 billion. Recovery may not occur until fiscal 2025, when sales could reach $17.48 billion. However, I believe that ST has a chance for surprise. Therefore, the trailing year earnings multiple of 2.31x looks very attractive. This is one of the cheapest tech stocks to buy.
Tower Semiconductor (TSEM)
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independent semiconductor foundry, tower semiconductor (NASDAQ:TSEM) focuses on specialized process technologies for manufacturing analog-intensive mixed-signal semiconductor devices in Israel, the United States, Japan, Europe and internationally. We offer a wide range of customizable process technologies, including CMOS image sensors and integrated power management solutions. Since the beginning of the year, TSEM stock has risen about 8%.
One of the fundamental elements supporting the tower is the aforementioned narration by the stagehands. Again, it's not a headline act. But without foundries, the broader technology sector won't disappear anytime soon. That being said, TSEM presents a higher risk profile. For example, in the first half of 2023, the company's average unexpected profit was nearly 16% below breakeven.
However, this situation changed in the second half, with the index increasing by nearly 7%. Nevertheless, experts predict that headwinds are expected ahead, with fiscal 2024 sales potentially falling 1% from the previous year's $1.42 billion.
Still, experts expect the stock to sell at $38.67, implying an upside of more than 18%. When combined with his modest 2.55x trailing year sales multiple, TSEM becomes one of the cheapest tech stocks to buy.
Gen Digital (GEN)
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It operates under the Infrastructure Software category. gen digital (NASDAQ:Gen) provides cybersecurity solutions to consumers in the United States, Canada, and other regions of the world. Per its company profile, Gen Digital provides security and performance products that protect PCs, Macs, and mobile devices from malware, viruses, adware, and other online threats in real time.
Please note that Gen Digital owns the Norton and LifeLock brands. Given the growing threat of malicious online activity, this can amount to a significant amount. Frankly, this isn't just a cybersecurity risk. Cybersecurity risks are numerous, including artificial intelligence used for illegal purposes. In fact, the scams in the world are becoming more and more sophisticated. Even the smartest people can fall prey, so a protection platform is needed.
GEN is down 3% for the year, but is up over 28% over the past 52 weeks. As his threat profile continues to grow, analysts expect him to report EPS of $1.95 and revenue of $3.81 billion in fiscal 2024. Over the last year, this print publication had EPS of $1.81 and revenue of $3.34 billion.
Interestingly, GEN is trading at a low forward price/earnings ratio of 9.67x. This definitely makes it a very strong candidate to buy an undervalued tech stock.
ON Semiconductor (ON)
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It clearly operates under its eponymous category; ON Semiconductor (NASDAQ:upon) provides intelligent sensing and power solutions in the United States and internationally. The company operates through the Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. We provide critical solutions for multiple industries, including automotive (electric vehicles) and sustainable energy. But buying cheap tech stocks is a riskier idea.
ON stock has fallen nearly 15% since the beginning of the year. It has fallen 8% over the past 52 weeks. However, if you take a long-term view, ON may be considered a currently undervalued gem. If the tech industry recovers (a not-too-impossible prediction given the strength of the labor market), ON could also recover.
Over the last year, the company's average positive expected return was 6.53%. However, Wall Street believes revenue and earnings growth will likely decline due to expected difficulties in the innovation sector.
Nevertheless, the interest rate share across analysts predicts a moderate buy, with a price target of $121.16. Combined with its modest forward price/earnings ratio of 16.5x, ON becomes one of the cheaper tech stocks to buy.
Publication date, Josh Enomoto did not have any positions (directly or indirectly) in any securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
