With the wide adoption of cutting-edge technologies like AI, integration of digital technologies, and increasing spending, the tech industry is on the front foot to contribute to worldwide growth and development. Also, its evolving application across all aspects of life broadens its possibilities.
Given the industry's bright outlook, it could be wise to invest in fundamentally strong tech stocks Ricoh Company, Ltd. (RICOY), Weave Communications, Inc. (WEAV), and AstroNova, Inc. (ALOT), which are currently trading under $15.
The tech industry is growing at lightning speed, encompassing all aspects of our lives. In recent times, the technology market has made innumerable breakthroughs across diverse segments, including the healthcare, biotech, industrial, energy, software, and retail markets, with the rapid adoption of AI and other cutting-edge systems.
As per a research report by Bain & Company, the market for AI-related hardware and software is projected to grow between 40% and 55% every year, totaling between $780 billion and $990 billion by 2027. Also, the government's attention towards powering American innovation is visible in President Biden’s 2025 Budget, providing robust investments in AI R&D.
These favorable trends have also accelerated investments and spending by tech companies in innovative technologies. Gartner projects worldwide IT spending to total $5.26 trillion in 2024, exhibiting a 7.5% growth from the previous year.
With this, the information technology market is expected to grow to $12.42 trillion in 2028, at a CAGR of 8.3%, driven by globalized IT services, digital transformation, cybersecurity innovations, and changing e-commerce. Also, the revenue in the application development software market is anticipated to reach $250 billion by 2029, showing a 6.5% CAGR.
Given these encouraging trends, let's delve deeper into the fundamentals of top tech stocks: RICOY, WEAV, and ALOT.
Ricoh Company, Ltd. (RICOY)
Headquartered in Tokyo, Japan, RICOY provides office, commercial printing, and related solutions globally. The company operates in Digital services; Digital Products; Graphic Communications; Industrial Solutions; and Other segments.
In terms of forward EV/Sales, RICOY is trading at 0.48x, 83% lower than the industry average of 2.82x. Also, the stock’s forward EV/EBITDA multiple of 7.28 is 49% lower than the industry average of 14.28. Also, its forward Price/Sales of 0.37x is 86.9% lower than the industry average of 2.83x.
On September 19, RICOY concluded a memorandum of understanding (MOU) with LG Electronics to collaborate on digital solutions for workplaces. The partnership will deliver elevated user experience and exceptional customer value for the B2B customers in the global market. Through the partnership, RICOY will further enhance its capability in the Workplace Experience domain.
RICOY’s net sales increased 7.4% year-over-year to ¥574.38 billion ($3.99 billion) for the fiscal first quarter, which ended June 30, 2024, and its operating income was ¥6.33 billion ($43.95 million) for the period. Also, profit attributable to owners of the parent amounted to ¥7.80 billion ($54.12 million).
Street expects RICOY's revenue for the second quarter (ending September 2024) to increase 10.4% year-over-year to $4.22 billion. The company’s revenue for the fiscal year (ending March 2025) is expected to grow 390.8% year-over-year to $17.22 billion. Furthermore, the company surpassed the consensus revenue estimates in three of the trailing four quarters.
Shares of RICOY have increased 11.8% over the past six months and 12% over the past year to close the last trading session at $10.27.
RICOY's robust growth prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Stability and Value. Within the Technology - Hardware industry, RICOY is ranked #11 out of 41 stocks.
Click here to access additional ratings of RICOY for Quality, Growth, Sentiment, and Momentum.
Weave Communications, Inc. (WEAV)
WEAV offers a customer experience and payments software platform. The company’s platform allows small and medium-sized healthcare businesses to maximize the value of their patient interactions and minimize the time and effort spent on manual or mundane tasks.
On August 27, WEAV announced Payment Reminders, an enhancement feature designed to help improve revenue cycle management by allowing practices to continue to collect more outstanding balances with less effort by enabling practices to turn each Weave payment invoice or Text to Pay request into a "set-it-and-forget-it" collection system.
On July 30, WEAV integrated with eClinicalWorks, the largest cloud-based EHR software in the U.S. The integration delivers additional value to WEAV customers through streamlined operational efficiency, improved patient experience, and enhanced data accuracy.
WEAV’s revenue rose 21.4% year-over-year to $50.59 million during the second quarter that ended June 30, 2024. Its non-GAAP gross profit grew 28.5% from the year-ago value to $36.37 million. The company’s free cash flow amounted to $21.22 million, indicating growth of 2183.8% year-over-year.
Analysts expect WEAV's revenue for the third quarter (ending September 2024) to increase 18% year-over-year to $51.38 million. For the fiscal year 2024, the company’s revenue is expected to grow 18.5% year-over-year to $201.95 million. Also, the company has topped the consensus EPS and revenue estimates in all of the trailing four quarters.
WEAV's shares have gained 9.8% over the past month and 49% over the past year to close the last trading session at $12.11.
WEAV's sound fundamentals are reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has a B grade for Quality, Growth, and Sentiment. Within the Software - Application industry, WEAV is ranked #21 among the 129 stocks.
In addition to the POWR Ratings we've stated above, we also have WEAV ratings for Momentum, Value, and Stability. Get all WEAV ratings here.
AstroNova, Inc. (ALOT)
ALOT designs develops, manufactures, and distributes specialty printers and data acquisition and analysis systems internationally. The company operates in segments like Product Identification (PI) and Test & Measurement (T&M).
In terms of trailing-12-month non-GAAP P/E, ALOT is trading at 30.21x, 28.6% lower than the industry average of 23.49x. Also, the stock’s trailing-12-month Price/Sales multiple of 0.64 is 77.6% lower than the industry average of 2.87. Also, its trailing-12-month Price/Cash Flow of 6.64x is 65.7% lower than the industry average of 19.35x.
On June 5, ALOT and the recently acquired MTEX NS subsidiary launched groundbreaking new innovative and sustainable printing technologies. The products launched included AQUAFLEX from MTEX NS, TrojanLabel T2-PRO system, ATOM 3 by MTEX NS, FLEXPACK series by MTEX NS, and MULTI 800 by MTEX NS.
The introduced solutions expanded the company’s portfolio and reinstated its dedication to driving innovation and delivering value to customers across diverse market segments.
During the second quarter, which ended August 3, 2024, ALOT’s revenue increased 14.1% year-over-year to $40.54 million, and its gross profit grew 47.5% from the year-ago value to $14.33 million. The company's non-GAAP net income came in at $572 thousand and $0.08 per common share for the quarter, respectively.
Furthermore, the company’s total current assets stood at $83.06 million as of August 3, 2024, compared to $76.67 million as of January 31, 2024.
ALOT's stock has soared 5.6% over the past year to close the last trading session at $12.99.
ALOT's POWR Ratings reflect its robust outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
ALOT has an A grade for Value. The stock also has a B grade for Growth and Sentiment. It is ranked #4 among the 41 stocks in the Technology - Hardware industry.
Click here to access additional ALOT ratings for Stability, Quality, and Momentum.Top of Form
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RICOY shares were trading at $10.27 per share on Thursday afternoon, down $0.26 (-2.42%). Year-to-date, RICOY has gained 33.30%, versus a 21.54% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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