Last week, the tech-rich Nasdaq plunged, dragged down by major tech stocks, including Facebook, Inc. (FB) and Apple Inc. (AAPL). However, according to a CNBC report, “technological weakness is a major buying opportunity for investors.” Additionally, Invesco’s Kristina Hooper said: “Longer-term technology will benefit increase in business spending.
According to a Forrester report, U.S. technology spending is expected grow by 6% this year and 6.8% next year, which should help the tech industry to develop further. The industry is also expected to grow through constant innovations in advanced technologies that are applicable in several sectors.
Wall Street analysts expect technology stocks NeoPhotonics Corporation (NPTN), Zix Corporation (ZIXI) and Pixelworks, Inc. (PXLW) -Which are priced below $ 10 per share to rally over 40% in the coming months. So, we think it might be wise to add these stocks to one of the list.
NeoPhotonics Corporation (NPTN)
NPTN manufactures and sells optoelectronic products that transmit and receive high-speed digital optical signals for Internet content providers in the cloud and large-scale data centers and telecommunications networks around the world. The San Jose, California, concern offerings include pluggable coherent transceivers and multicast switching solutions.
On September 8, 2021, NPTN launched its CFP2-DCO module with zero dBm optical output power. Tim Jenks, President and CEO of NPTN, said: “Our latest CFP2-DCO coherent plug-in module, with high power output, robust ROADM filter tolerance and proven 1500 km transmission, allows customers to ” use a consistent plug-in solution to cover virtually all metropolitan ROADMs. use case, simplifying network design, enabling disaggregation and reducing inventory costs.
NPTN’s revenue increased 6.7% sequentially to $ 65.01 million for its fiscal second quarter, ended June 30, 2021. The company’s interest income was 140,000 $, up 536.4% year-on-year. Its non-GAAP gross profit was $ 14.13 million, up 3.4% sequentially.
For its 2022 fiscal year, analysts expect NPTN’s revenue to rise to $ 378.90 million, a 26.2% year-over-year increase. In addition, the company’s EPS is expected to rise 188.2% year-on-year to $ 0.30 next year. Plus, it has beaten EPS estimates for the street in three of the past four quarters.
Wall Street analysts expect the stock to hit $ 14.20 in price in the near term, indicating a potential 61% increase.
Zix Company (ZIXI)
ZIXI provides solutions for email encryption, data loss prevention, threat protection, unified archiving and cloud data backup in US, Israel, Canada, UK United and Switzerland. The Dallas, Texas, The company offers Advanced Email Threat Protection, a cloud-based service that protects organizations against malware, ransomware, phishing, and other spam.
On September 21, ZIXI launched its secure Large File add-on for Zix Email Encryption. ZIXI CEO Dave Wagner said, “With the announcement of this new offering, we are excited to be able to help our customers and partners provide users with an intuitive way to send and receive large files via e- mail safely. There is no additional infrastructure to deploy or maintain, which means users can simply log in using their existing secure messaging portal credentials.
For its fiscal second quarter, ended June 30, 2021, ZIXI’s revenue increased 17.8% year-over-year to $ 62.83 million. the company’s gross profit was $ 28,230,000, up 11.1% year-over-year. Its cash and cash equivalents were $ 33.9 million for the six-month period ended June 30, 2021, compared to $ 14.06 million for the period the previous year.
ZIXI’s revenue is expected to reach $ 288.04 million in its fiscal year 2022, an increase of 13.6% year-over-year. Its EPS is also expected to rise 13.6% to $ 0.67 next year.
Wall Street analysts expect the stock to hit $ 10.75 in price in the near term, indicating a upside potential of 44.3%.
Pixelworks, Inc. (PXLW)
PXLW develops and markets semiconductor and software solutions such as video display processor products that include image processor integrated circuits. The San José, California, company has an intellectual property portfolio of 338 patents related to the visual display of digital image data.
On August 10, 2021, PXLW transformed its Shanghai R&D center into a profit center. Todd DeBonis, President and CEO of PXLW, said, “This will allow us to focus our mobile, projector and video delivery business at their global hub in Asia, increasing our ability to access to capital, ecosystem partners, customers, and key talents.
PXLW’s revenues increased 51.6% sequentially to $ 14.05 million in the second quarter ended June 30, 2021. Its gross margin was $ 7.11 million for the period ending June 30, 2021, up 90.9% sequentially. In addition, its non-GAAP gross profit margin was 52.7% compared to 43.7% in the previous quarter. In addition, its non-GAAP net loss was $ 2.6 million, compared to $ 6.36 million in the previous year quarter.
Analysts expect PXLW’s revenue to grow 31.3% year-on-year to $ 70.43 million in its fiscal year 2022. Its EPS is expected to grow 51.9% next year.
Wall Street analysts expect the stock to hit $ 8 in price in the near term, indicating an increase potential of 83.9%.
NPTN shares were trading at $ 9.35 per share on Thursday morning, up $ 0.13 (+ 1.41%). Year-to-date, NPTN has gained 2.86%, compared to a 19.11% increase in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist passionate about the analysis of financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary. Following…