Hammered down by reasons such as sky-high inflation, rising interest rates by Fed, layoffs, and recessionary fears, the tech-heavy Nasdaq Composite plunged 15.4% over the past year. However, with a rising inclination toward the adoption of advanced digital technology, the industry is well-positioned to witness considerable growth.
Moreover, investment management firm Allianz Global Investors believe that the potential peaking of interest rates this year could bode well for the tech sector and pose an attractive entry point for investors.
Furthermore, the global information technology market is forecasted to grow from $8.18 trillion in 2022 to $12 trillion in 2027 at a CAGR of 7.9%.
Against this backdrop, fundamentally strong tech stocks having major growth opportunities, Vishay Intertechnology, Inc. (VSH), TTM Technologies, Inc. (TTMI), and Cambium Networks Corporation (CMBM), might be solid buys in 2023.
Vishay Intertechnology, Inc. (VSH)
VSH manufactures and supplies discrete semiconductors and passive electronic components in Asia, Europe, and the Americas. The company operates through six segments: Metal Oxide Semiconductor Field Effect Transistors (MOSFETs); Diodes; Optoelectronic Components; Resistors; Inductors; and Capacitors.
On February 1, 2023, VSH introduced a new Automotive Grade series of vPolyTan™ surface-mount polymer tantalum molded chip capacitors. The AEC-Q200 qualified VSH Polytech T51 series offers lower ESR, lower voltage derating, and a benign failure mode while maintaining higher volumetric efficiency than traditional tantalum capacitors.
On November 8, VSH announced that its board of directors declared a dividend of $0.10 per share of common stock and Class B common stock, paid to stockholders on December 15, 2022.
On October 31, 2022, VSH acquired MaxPower Semiconductor, Inc., a fabless power semiconductor provider dedicated to delivering innovative and cost-effective technologies. MaxPower would be incorporated into VSH’s MOSFETs reportable segment. This acquisition should provide attractive opportunities to expand VSH’s product portfolio and strengthen its competitive positioning.
VSH’s revenue has grown at 7.1% and 6.9% CAGRs over the past three and five years, respectively. Moreover, its EBITDA has grown at a 14.1% CAGR over the past three years.
For the fiscal third quarter that ended October 1, 2022, VSH’s net revenues increased 13.7% year-over-year to $924.80 million, while its gross margin was $289.54 million, up 28.3% year-over-year. The company’s adjusted EBITDA increased 38.3% from the prior-year period to $223.74 million.
In addition, VSH’s adjusted net earnings grew 47.2% from the year-ago value to $134.12 million, and its adjusted earnings per share came in at $0.93, up 47.6% year-over-year.
Analysts expect VSH’s revenue for the fiscal first quarter (ending March 2023) to increase by 1.2% from the previous-year period to $863.75 million. Its EPS is expected to come in at $0.67 for the same quarter. Furthermore, the company surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past six months, the stock has gained 17% to close the last trading session at $24.28. It gained 21.2% over the past three months.
VSH’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
VSH has an A grade for Growth and Value. It is ranked #3 out of 44 stocks in the Technology - Electronics industry.
We have also provided VSH grades for Momentum, Stability, Sentiment, and Quality. Get all VSH ratings here.
TTM Technologies, Inc. (TTMI)
TTMI manufactures and sells Printed Circuit Boards (PCBs) worldwide. The company operates through two segments: PCB and RF&S Components. It focuses on producing high-tech PCBs and backplane assemblies and also designs and produces high-frequency RF and microwave parts.
On December 6, 2022, TTMI and Raytheon Missiles & Defense, a Raytheon Technologies Corporation (RTX) business, reached a multi-year agreement to provide radio frequency assemblies, electronic hardware, and PCBs for the SPY-6 family of radars. This agreement has the potential to reach $500 million over five years.
In September, TTMI announced a distribution agreement with RFMW, a premier radio frequency (RF) and microwave components and semiconductors distributor. TTM is expected to offer its complete line of RF&S products through RFMW, including its proven signature lineup of Xinger® brand products.
TTMI’s revenue has grown at 2.4% CAGR over the past three years. Moreover, its net income has grown at a 12.3% CAGR over the past three years.
For the fiscal third quarter that ended October 3, 2022, TTMI’s net sales increased 20.5% year-over-year to $671.08 million, while its non-GAAP gross profit increased 37.8% from the year-ago value to $132.30 million. Its non-GAAP operating income was $68.21 million, reflecting a 43% rise year-over-year.
Furthermore, the company’s non-GAAP net income increased 58.5% year-over-year to $57.92 million, while its non-GAAP EPS stood at $0.56, up 64.7% year-over-year.
Analysts expect TTMI’s revenue to increase 10% year-over-year to $639.45 million for the fiscal first quarter ending March 2023. The company’s EPS for the same quarter is expected to grow 41.7% year-over-year to $0.34. Moreover, the company surpassed the consensus EPS estimates in all four trailing quarters, which is impressive.
Shares of TTMI have gained 21.3% over the past six months and 6.7% over the past five days to close the last trading session at $16.42.
TTMI’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
The stock has an A grade for Growth and Momentum and a B for Quality. Within the Technology – Electronics industry, it is ranked #4.
Click here to see additional ratings of TTMI for Value, Sentiment, and Stability.
Cambium Networks Corporation (CMBM)
CMBM is engaged in wireless broadband networking infrastructure services for network operators, including medium-sized wireless internet service providers, enterprises, and government agencies.
On December 13, 2022, CMBM introduced the ePMP 4600, a next-generation fixed wireless platform that lets service providers and private network operators utilize the entire 6 GHz spectrum to deliver up to 4 Gbps throughput per sector over fixed wireless.
Cambium Networks President and CEO Atul Bhatnagar said, "The 6 GHz spectrum offers broadband service providers a way to bring high performance next-generation connectivity with superior economics to more people and help close the digital divide expeditiously."
CMBM’s revenue has grown at 3% and 13.1% CAGRs over the past three and five years, respectively. Its total assets have grown at 11.9% CAGR over the past three years.
CMBM’s revenue stood at $81.20 million for the fiscal third quarter (ended September 30, 2022), up 7% year-over-year. Its gross profit increased 14.3% year-over-year to $41.17 million. Its non-GAAP net income increased 69.3% year-over-year to $11.28 million, and non-GAAP net income per share increased 73.9% year-over-year to $0.40.
Analysts expect CMBM’s revenue to increase 21.2% year-over-year to $80.16 million for the fiscal first quarter ending March 2023. The company’s EPS is expected to grow significantly year-over-year to $0.23 for the same quarter. CMBM has an impressive earnings surprise history as it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past three months, the stock has gained 15.9% to close its last trading session at $22.02. Moreover, it has gained 2.7% intraday.
CMBM’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system.
The stock has an A grade for Growth and B for Sentiment. It is ranked #10 in the 49-stock Technology - Communication/Networking industry.
In addition to the POWR Ratings we’ve just highlighted, you can see CMBM’s ratings for Stability, Value, Momentum, and Quality here.
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VSH shares were trading at $24.28 per share on Friday morning, up $0.81 (+3.45%). Year-to-date, VSH has gained 12.56%, versus a 7.62% rise in the benchmark S&P 500 index during the same period.
About the Author: Sristi Suman Jayaswal
The stock market dynamics sparked Sristi's interest during her school days, which led her to become a financial journalist. Investing in undervalued stocks with solid long-term growth prospects is her preferred strategy. Having earned a master's degree in Accounting and Finance, Sristi hopes to deepen her investment research experience and better guide investors.
3 Tech Stocks With Major Growth Opportunities StockNews.com
