Tech investments are expected to increase this year as organizations realize the need for tech advancements to ensure industry relevance and are diving into emerging technologies or fast-tracking digital transformation projects. “CEOs know they must accelerate the adoption of digital business and are seeking more direct digital routes to connect with their customers,” says David Groombridge, VP Analyst, Gartner. Tech budgets are expected to increase in 2022, some to the heftier pre-pandemic levels of 2019 or beyond.
Studies show “born tech” companies have contributed 52% of total market value growth since 2015, while an additional 20% of market value growth has come from companies with a tech-led strategy. In addition, according to the International Data Corporation (IDC), the technology industry is on pace to exceed $5.30 trillion in 2022.
Given this backdrop, fundamentally sound under $10 tech stocks Ricoh Company, Ltd. (RICOY), Yext, Inc. (YEXT), Tufin Software Technologies Ltd. (TUFN), inTEST Corporation (INTT), and Zedge, Inc. (ZDGE) might stand to benefit from the industry tailwinds and could be worth betting on.
Ricoh Company, Ltd. (RICOY)
Headquartered in Tokyo, Japan, RICOY is engaged in integrated domestic and overseas manufacturing services. The company’s segments include Imaging & Solutions; Industrial Products; and Other.
On March 30, 2022, RICOY announced the expansion of its 360-degree image data platform business. The company intends to improve its cloud-based services and help customers across the globe to harness creativity and productivity.
In the same month, RICOY announced the launch of the PENTAX JUPITER series of porro-prism binoculars in four different cost-effective models. This is expected to expand the company’s offerings and add to its revenue stream.
For the fiscal third quarter ended December 31, 2021, RICOY’s sales increased 0.4% year-over-year to ¥432.70 billion ($3.55 billion). Its gross profit grew 2.3% from the year-ago value to ¥156.9 billion ($1.29 billion). Profit attributable to owners stood at ¥12 billion ($0.10 billion), reflecting a 6,100% increase year-over-year. Its EPS was ¥18.43, up 18.81% from the year-ago value.
Analysts expect RICOY’s revenue for the fiscal fourth quarter ended March 2022 to come in at $4.58 billion, indicating an increase of 1.8% year-over-year. Also, the company’s revenue is expected to grow 111.7% year-over-year to $14.85 billion in the ongoing fiscal year.
RICOY has gained 2.7% over the past month to close the last trading session at $8.86.
RICOY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
RICOY has a B grade in Stability and Value. It is ranked #10 of 45 stocks in the Technology - Hardware industry.
Beyond what is stated above, we’ve also rated RICOY for Momentum, Quality, Sentiment, and Growth. Get all the RICOY ratings here.
Yext, Inc. (YEXT)
YEXT is an artificial intelligence (AI) solutions company that provides a platform for businesses to structure their data, which can be leveraged to deliver modern search engine experiences across various avenues.
On March 15, 2022, Main Line Health, a leading health care system in the Greater Philadelphia region, partnered with YEXT and Stericycle Inc. (SRCL) to enhance and streamline its search and online scheduling functions for patients by using advanced technologies in its website. This collaboration should help strengthen YEXT’s position in the healthcare industry. YEXT has been optimizing its AI search solutions for healthcare. Recently, the company announced the availability of Find-a-Doc, an AI-powered search solution for healthcare organizations to improve the pre-appointment patient experience and for patients to identify the right provider for their needs on an organization’s website.
On February 1, 2022, YEXT announced its integration with Freshdesk, a customer experience solution that provides help desk support; to equip businesses in the Freshworks Inc. (FRSH) marketplace with its AI search capabilities to enhance customer experiences.
YEXT’s revenue increased 9.5% year-over-year to $100.93 million in the fiscal fourth quarter ended January 31, 2022. Gross profit was 76.36 million, up 8.2% from the year-ago value. Also, the company’s net cash provided by operating activities grew 1,714.7% year-over-year to $21.85 million in the fiscal year ended January 31, 2022, while the cash and cash equivalents balance stood at $261.21 million, up 13.4% year-over-year.
YEXT’s revenue for the first quarter ending April 2022 is expected to come in at $96.74 million, indicating a 5.2% year-over-year growth. Its revenue is expected to come in at $410.49 million, up 5.1% year-over-year in the fiscal year ending January 2023. In addition, YEXT beat the consensus EPS estimates in the trailing four quarters.
YEXT declined 2.8% intraday to close the last trading session at $6.89.
The stock has a B grade in Growth, Value, and Quality. It is ranked #15 out of the 60 stocks in the Software - Business industry.
Get YEXT’s ratings for Momentum, Sentiment, and Stability here.
Tufin Software Technologies Ltd. (TUFN)
Headquartered in Tel Aviv, Israel, TUFN develops, markets, and sells software-based solutions in the United States and internationally.
TUFN’s total revenues increased 15.8% year-over-year to $35.84 million in the fiscal fourth quarter ended December 31, 2021. Its gross profit improved 16.2% from its year-ago value to $29.74 million over the period. The company’s net cash provided by financing activities increased 184.3% year-over-year to $1.89 million in the fiscal year ended December 31, 2021.
The consensus revenue estimate of $25.12 million for the fiscal first quarter ended March 2022 represents a 17.6% improvement year-over-year, while the revenue estimate of $28.21 million for the next quarter represents a 9.6% increase year-over-year. It has an impressive earnings surprise history, as it topped Street EPS estimates in three of the trailing four quarters.
Over the past five days, the stock has gained 3.5% to close the last trading session at $8.93.
It is no surprise that TUFN has an overall rating of B, equating to Buy in our POWR Ratings system.
TUFN also has a B grade in Sentiment. TUFN is ranked #13 in the Software - Business industry.
In addition to the POWR Rating grades I’ve just highlighted, you can see the TUFN’s ratings for Growth, Value, Momentum, Stability, and Quality here.
inTEST Corporation (INTT)
INTT is a test and process solutions supplier that provides products for automotive, defense/aerospace, industrial, medical, semiconductor, and telecommunications markets. It operates through two segments Thermal Products (Thermal); and Electromechanical Semiconductor Products (EMS).
On March 22, 2022, INTT announced that its thermal segment subsidiary, inTEST Thermal Solutions (iTS), engineered the next generation of ThermoStream Systems and introduced the new North Sciences brand, which would provide its customers with diverse options, greater reliability, and protection for their cold storage needs. Thus, expanding its eco-friendly ThermoStream systems portfolio.
In February 2022, INTT announced opening a new office in Fremont, CA, intending to better serve customers through streamlined operations and lower operating costs for its backend semi-business. The company has also upgraded facilities for its recently acquired digital streaming and image capturing solutions business in the Netherlands and relocated its design, sales, and manufacturing facility to the High Tech Campus in Eindhoven. “We expect this move to provide better efficiencies, enable greater visibility with international pioneering technology firms to drive our presence in the industrial imaging market, and allow us to capitalize on the advancements being made in artificial intelligence,” said Nick Grant, inTEST president and CEO.
INTT’s revenue increased 50.3% year-over-year to $22.36 million in the fiscal fourth quarter ended December 31, 2021. Its gross profit grew 54% from the year-ago value to $10.35 million, while its non-GAAP EBITDA improved 573.9% year-over-year to $1.37 million. Its non-GAAP EPS increased 800% from its year-ago value to $0.07.
Street expects INTT’s EPS for the fiscal year ending December 2022 to improve 17.9% year-over-year to $0.96. The consensus revenue estimate of $112.02 million for the same period represents a 32% increase year-over-year. The company also surpassed the consensus EPS estimates in three of the trailing four quarters.
INTT gained 1.7% intraday to close the last trading session at $10.73.
The stock has a B grade in Value. It is ranked #65 out of the 96 stocks in the A-rated Semiconductor & Wireless Chip industry.
Get INTT’s ratings for Momentum, Growth, Quality Sentiment, and Stability here.
Zedge, Inc. (ZDGE)
ZDGE operates as a digital publishing and content platform worldwide that offers a consumer-facing mobile personalization app called Zedge.
ZDGE’s total revenue increased 30.2% from the prior-year quarter to $6.90 million in the fiscal second quarter ended January 2022. Operating income for the quarter came in at $3.10 million, reflecting an increase of 24% year-over-year, while the EBITDA stood at $3.40 million, up 17.2% year-over-year. Its cash flow from operations came in at $3.0 million, reflecting an increase of 30.4% year-over-year from the prior-year quarter.
For the fiscal third-quarter ending April 2022, ZDGE’s revenue is expected to come in at $5.72 million, indicating a 9% year-over-year growth. Its revenue is expected to improve 26.5% year-over-over to $24.75 million in the fiscal year ending July 2022. ZDGE surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.
The stock has gained 1.3% intraday to close the last trading session at $6.09.
ZDGE’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to Buy in our POWR Ratings system.
The company has an A grade in Sentiment and Quality and a B in Value. The stock is ranked #22 in the Software – Application industry.
To get ZDGE’s ratings for Momentum, Stability, and Growth, click here.
What To Do Next?
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RICOY shares were trading at $8.74 per share on Friday afternoon, down $0.12 (-1.35%). Year-to-date, RICOY has declined -7.81%, versus a -4.45% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
5 Top Tech Stocks Trading Under $10 StockNews.com
