With the world transforming into a digital world, the tech sector is again in the spotlight. Investors are particularly drawn to tech stocks due to their boosting return and revenue models, like subscriptions and Software-as-a-Service (SaaS), which provide predictable potential earnings in the future.
Given this landscape, it could be wise for investors to keep an eye on quality tech stocks Full Truck Alliance Co. Ltd. (YMM), CCC Intelligent Solutions Holdings Inc. (CCCS), and Sprinklr, Inc. (CXM), which are trading under $20 and have high growth potential due to their disruptive technologies and unique business models. Moreover, these stocks have more than 30% upside potential.
From Artificial Intelligence (AI) and cloud computing to cybersecurity and digital payments, tech companies are leading the charge in redefining industries and consumer behaviors. Gartner’s research further supports this optimism, predicting a 7.5% year-over-year increase in global IT spending in 2024, expected to be valued at $5.26 trillion.
According to a PwC report, AI will have a significant impact in the coming years, contributing up to $15.70 trillion to the global economy by 2030. This, in turn, has led to strong earnings reports and optimistic outlooks from many tech companies, fueling investor confidence.
Let’s now look at the featured stocks in detail:
Full Truck Alliance Co. Ltd. (YMM)
Headquartered in Guiyang, China, YMM is a freight dispatch platform mainly engaged in developing cloud computing, big data, mobile internet, and artificial intelligence technology. It also provides technology development and other services.
In terms of forward non-GAAP P/E, YMM is trading at 14.31x, 24.2% lower than the industry average of 18.89x. Likewise, the stock’s forward EV/EBIT and Price/Cash flow multiples of 13.84 and 10.56 are 11.9% and 27.6% lower than their respective industry averages of 15.71 and 14.58.
In the second quarter that ended on June 30, 2024, YMM reported net revenue of RMB2.76 billion ($380.38 million). The company’s result from adjusted income from operations came in at RMB698.97 million ($96.18 million), indicating a growth of 55.1% year-over-year. In addition, its adjusted net income amounted to RMB970.86 million ($133.59 million) and RMB0.05 per share, reflecting increases of 34.3% and 66.7% year-over-year, respectively.
For the third quarter of 2024, YMM expects total net revenues to be between RMB2.76 billion and RMB2.82 billion, representing a year-over-year growth of approximately 21.9% to 24.6%.
Analysts expect YMM’s revenue for the third quarter (ending September 2024) to increase 23.1% year-over-year to $388.17 million, while its EPS for the same period is expected to grow 33.5% from the prior year to $0.15. Moreover, it topped the street revenue and EPS estimates in each of the trailing four quarters, which is excellent.
Over the past six months, the stock has surged 8.9%, closing the last trading session at $7.10.
Out of five analysts that rated YMM, four rated it Buy, while one rated it Hold. The 12-month median price target of $11.02 indicates a 55.2% upside potential from the last closing price. The price targets range from a low of $9 to a high of $12.
YMM’s stance is apparent in its POWR Ratings. The stock has a B grade for Growth and Momentum. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
Among the 125 stocks in the Software - Application industry, it is ranked #72. Click here to see the additional YMM ratings (Value, Stability, Sentiment, and Quality).
CCC Intelligent Solutions Holdings Inc. (CCCS)
CCCS provides software as a service (SaaS) platform for the property and casualty (P&C) insurance economy. The company's cloud-based software serves as a service platform connecting trading partners, facilitating commerce, and enabling digital workflow across the platform through artificial intelligence.
On September 4, CCCS launched CCC® Payroll, a new solution designed to streamline payroll management for collision repair shops. This new solution will enable shops to track production and labor within a single system, the CCC ONE® Platform, simplifying the process and enhancing transparency.
On July 30, the company launched CCC® Intelligent Reinspection, a new solution designed to help auto insurers streamline the review of incoming repair facility estimates, expediting repairer workflows and claims resolutions. This new solution will use AI-powered analysis and audit capabilities to assess incoming shop estimates based on insurer-provided rules.
In terms of forward Price/Book, CCCS is trading at 3.33x, 17.2% lower than the industry average of 4.02x.
CCCS’ revenues for the second quarter (ended June 30, 2024) increased 9.9% year-over-year to $232.62 million. It reported an adjusted gross profit of $182.08 million, indicating a 12.4% growth from the prior year quarter with an adjusted gross profit margin of 78% (up 100 bps year-over-year).
The company’s adjusted net income came in at $56.19 million and $0.09 per share, up 17.4% and 12.5% year-over-year, respectively. Also, its adjusted EBITDA increased 18.4% year-over-year, amounting to $95.79 million.
As per the business outlook for the fiscal year 2024, CCCS forecasts revenue to be between $941 million and $945 million. The company also expects adjusted EBITDA to range from $391 million to $395 million.
The consensus revenue estimate of $237.36 million for the fiscal third quarter (ending September 2024) represents a 7.3% increase year-over-year. The consensus EPS estimate of $0.09 for the same quarter indicates marginal improvement year-over-year. The company has an impressive surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
The stock has gained marginally over the past month to close the last trading session at $10.43.
Based on 10 Wall Street analysts offering 12-month price targets for CCCS in the last three months, the average target price is $13.89, indicating a 33.2% upside from the last price, with a high forecast of $15 and a low forecast of $13.
CCCS’ POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
CCCS’ has a B grade for Growth, Stability, and Sentiment. It is ranked #3 out of 18 stocks in the A-rated Software - SAAS industry. Click here to see the other ratings of CCCS for Value, Momentum, and Quality.
Sprinklr, Inc. (CXM)
CXM provides enterprise cloud software products worldwide. The company operates the Unified Customer Experience Management platform, an AI-powered platform where its software enables customer-facing teams to collaborate across internal silos, communicate across digital channels, and leverage a complete suite of capabilities to deliver customer experiences.
On June 27, CXM expands its partnership with Snapchat to help brands manage all organic and paid Snapchat content in one unified platform. Brands will be able to post Snapchat Stories, publish Spotlight Content, and promote this organic content with ads all in Sprinklr, saving time and reducing costs while engaging a powerful audience.
In the same month, CXM and Reddit, Inc. announced their agreement to expand its strategic partnership. This partnership spans both Reddit’s Data and Advertising APIs, with CXM openly as their first official partner.
In terms of forward EV/Sales, CXM is trading at 1.88x, which is 31.7% lower than the industry average of 2.75x. The stock’s forward Price/Sales ratio of 2.41x is 11.9% below the industry average of 2.73x. Also, its forward EV/EBITDA multiple of 13.26 compares to the industry average of 13.77x.
For the second quarter of 2025, which ended on July 31, CXM's revenues increased 10.5% year-over-year to $197.21 million. Its non-GAAP gross profit came in at $143.61 million, up 5.8% year-over-year. The company’s free cash flow increased 89.4% year-over-year, amounting to $16.53 million. Its non-GAAP net income for the quarter stood at $42.44 million or $0.15 per share.
For the full fiscal year, the company expects its subscription revenue to range between $710.50 million and $712.50 million. It also expects total revenue between $785 million and $787 million and non-GAAP operating income to range from $80.5 million to $81.5 million. Additionally, CXM expects its non-GAAP net income per share to fall between $0.32 and $0.33.
Street expects CXM’s revenue for the third quarter (ending October 2024) to increase 5.5% year-over-year to $196.49 million. However, the consensus EPS estimate of $0.08 for the same period indicates a 27.3% year-over-year decline.
CXM shares have declined 1.5% intraday to close the last trading session at $7.36.
Based on 12 Wall Street analysts offering 12-month price targets for CXM in the last three months, the average target price is $10.30, indicating a 40% potential upside from the last price, with a high forecast of $17 and a low forecast of $8.
CXM’s mixed fundamentals are reflected in its POWR Ratings. The stock has a B grade for Value and Quality. It is ranked #60 out of 125 stocks in the Software - Application industry.
Beyond what is stated above, we’ve also rated CXM for Growth, Momentum, Stability, and Sentiment. Get all CXM’s ratings here.
What To Do Next?
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YMM shares were trading at $7.35 per share on Wednesday afternoon, up $0.25 (+3.52%). Year-to-date, YMM has gained 6.64%, versus a 16.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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