2020 was a stellar year for the technology sector thanks to the COVID-19 pandemic, which forced individuals and organizations to depend more on technological solutions to stay operational. Many analysts expect this trend to continue this year given an ongoing fast-paced digital transformation around the globe. An increasing number of companies are planning to operate remotely on a permanent basis, which bodes well for technology companies. Indeed, the global information technology market is expected to expand at a CAGR of 5% through 2024.
While most of the well-known technology stocks are trading at sky-high valuations now, there are several lesser-known players in the industry that are fundamentally sound and are well-positioned to outperform the market this year.
Capgemini SE (CGEMY), PagerDuty, Inc. (PD), PDF Solutions, Inc. (PDFS), SIFY Technologies Limited (SIFY), and Zedge, Inc. (ZDGE) are five companies that delivered significant returns in 2020 and still have plenty of upside. We believe these companies’ cutting-edge technology solutions should keep driving their growth and help their stocks soar.
Capgemini SE (CGEMY)
CGEMY provides consulting and technology services. The company is headquartered in France and has a presence in more than 50 countries. Over the past year, CGEMY’s stock has gained 16.1%.
The company collaborated recently with Amazon Web Services to extend its digital cloud platform for SAP solutions. CGEMY has also signed a global agreement with EDG International Networks to deliver services for the development of smart meters and smart grids.
For the quarter ended September 30, 2020, the company saw an 18.4% rise in revenue compared to the same period last year. The company also saw a 10% increase in digital and cloud services during the same period.
How does CGEMY stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Overall POWR Rating
The stock is also ranked #2 of 83 stocks in the Technology – Services industry.
PagerDuty, Inc. (PD)
PD runs a digital operations management platform for enterprise customers. The company specializes in providing SaaS incidence and response solutions. PD’s stock has risen 91% over the past year.
PDS has entered a further collaboration with Amazon Web Services. Under the new collaboration, PDS’s digital operations platform will be integrated with Amazon DevOps Guru. The company is also collaborating with Tata Consultancy Services to help accelerate digital transformation across several industries.
For the quarter ended October 31,2020, PDS saw a 26% increase in revenue compared to the same period last year. The number of its customers with an annual recurring revenue of more than $500,000 increased 40% during the same period.
PD’s revenue is estimated to increase 25% for the quarter ended January 31, 2021 and 27.3% in 2021. The company’s EPS is expected to rise 17.1% in 2021 and 30% per year over the next five years.
PD’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with an “A” for Trade Grade and a “B” for Peer Grade. It is ranked #28 of 83 stocks in the Technology – Services industry.
PDF Solutions, Inc. (PDFS)
PDFS provides technology infrastructure and related services to enhance the yield of integrated circuits. The company has operations in Europe, North America, and Asia. PDFS’ stock price has increased 32.7% over the past year.
PDFS recently acquired Cimetrix Incorporated, a global provider of equipment connectivity solutions for smart manufacturing. The company also announced its partnership with Advantest Corporation, which includes the five-year subscription by Advantest to PDFS’ Exensio analytics platform.
For the quarter ended September 30, 2020, PDFS saw a 5% rise in revenue compared to the same period last year. The company’s analytics revenue was up 13% during the same period.
PDFS’ revenue is expected to grow 6.9% for the quarter ended December 30, 2020 and 28.5% in 2021. The company’s EPS growth is expected to be 800% in 2021 and 20% per annum over the next five years.
It is no surprise that PDFS has a “Buy” in our POWR Ratings system with a grade of “A” in Trade Grade, and a “B” in Buy & Hold Grade. In the 83-stock Technology – Services industry, PDFS is ranked #33.
SIFY Technologies Limited (SIFY)
SIFY provides communications technology and integration solutions. The company has operations in India and internationally. Over the past year, SIFY’s stock has returned 84%.
SIFY was recently included on the Fortune India 500 list by Fortune magazine. For the quarter ended September 30, 2020, the company saw a 2% increase in revenue. The company’s EBITDA increased 12% during the same period.
SIFY’s revenue growth is expected to be 3.6% for the quarter ended March 31, 2021 and 5.5% for 2021. The company’s EPS growth is expected to be 11.8% in 2021.
SIFY’s strong fundamentals are reflected in its POWR Ratings. It has an “A” for Industry Rank and a “B” for Trade Grade. It is ranked #39 of 69 stocks in the Internet industry.
Zedge, Inc. (ZDGE)
ZDGE runs a content distribution platform. The company allows users to customize their smartphones through wallpapers, ringtones, notification sounds, and more. ZDGE’s stock has gained 366.2% over the past year.
ZDGE last year announced a change in its leadership and the expansion of its board of directors. The leadership change has the potential of strengthening the company’s operations.
For the quarter ended October 2020, the company saw an 85% increase in revenue compared to the same period last year. The company’s paid subscribers increased 205% during the same period.
ZDGE is estimated to see revenue growth of 35.5% in 2021 and 29.5% in 2022. The company is expected to see EPS growth of 360% in 2021 and 115.4% in 2022.
It is no surprise that ZDGE has a “Strong Buy” rating in our POWR Ratings system with a grade of “A” in Trade Grade, Buy & Hold Grade and Peer Grade. In the 83-stock Technology – Services industry, ZDGE is ranked #20.
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CGEMY shares were trading at $30.12 per share on Thursday afternoon, down $0.09 (-0.31%). Year-to-date, CGEMY has declined -2.30%, versus a 2.63% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.5 Under the Radar Tech Stocks to Outperform in 2021: PagerDuty, Sify Technologies, Capgemini, Zedge, and PDF Solutions appeared first on StockNews.com