The technology sector is expected to grow significantly in the coming months with consistent AI, IoT, and cloud computing innovations and rising demand from industries undergoing digital transformations. So, we think it could be wise to buy beaten-down tech stocks LiveRamp (RAMP), N-able (NABL), and Materialise (MTLS), which possess solid fundamentals and have the potential to rebound next year. So, let’s discuss these names in more detail.
Over the past few weeks, the stock market has been highly volatile, with the COVID-19 omicron variant making investors nervous. However, the situation has extended the work-from-home culture for several companies, boosting the technology industry’s growth prospects.
Investors’ interest in the technology sector is evidenced by the Technology Select Sector SPDR Fund’s (XLK) 10.4% returns over the past three months versus the SPDR S&P 500 Trust ETF’s (SPY) 6.2% returns. And according to a CNBC Technology Executive Council survey report, artificial intelligence, cloud computing, and machine learning technologies are expected to be crucial in 2022. Increasing demand for technology products and services with the continuing digitization of industries should drive the sector’s growth.
LiveRamp Holdings, Inc. (RAMP)
RAMP in Little Rock, Ark., is a technology company that provides enterprise data connectivity platform solutions across the United States, Europe, and the Asia-Pacific. It enables organizations to connect, control, and activate data to transform customer experiences and generate more valuable business outcomes.
On October 12, 2021, RAMP announced that streaming inventory forecasting and data collaboration capabilities were added to its TV platform. This makes it the first and only end-to-end solution that enables media sellers and advertisers to collaborate, activate, and quantify media campaigns in a coordinated way across all TV inventory. So, this new capacity could help boost its revenue.
RAMP’s revenues increased 21.6% year-over-year to $127.29 million for its fiscal second quarter, ended September 30, 2021. Its non-GAAP net earnings came in at $17.83 million, up 640.8% year-over-year. Also, its non-GAAP EPS increased 766.7% year-over-year to $0.26.
Analysts expect RAMP’s revenue to be $633.83 million in its fiscal 2023, representing a 20.7% year-over-year rise. The company’s EPS is expected to increase 134.8% year-over-year to $0.54 in the current year. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock has declined 33.3% in price year-to-date to close the last trading session at $48.82.
RAMP’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
RAMP has an A grade for Growth and a B grade for Sentiment. It is ranked #20 of 76 stocks in the Technology – Services industry.
N-able Inc. (NABL)
NABL provides cloud-based software solutions for managed service providers (MSPs). The Wakefield, Mass.-based company’s solutions enable MSPs to support digital transformation and growth within small- and medium-sized enterprises.
On November 9, 2021, NABL President and CEO John Pagliuca said, “I believe N-able is well-positioned in a dynamic industry with strong growth potential. The digital evolution is accelerating with SMEs looking to increase productivity, collaboration, and security as they look to differentiate for a new hybrid workforce. Our MSPs are looking to us to support them with both the technology and the tools that will enable them to land, expand, and retain their customers who are relying on them for proactive and recurring IT services.”
NABL’s subscription and other revenue increased 15.9% year-over-year to $88.42 million for its fiscal third quarter, ended September 30, 2021. Its net income came in at $1.87 million, compared to a $1.13 million loss in the year-ago period. Furthermore, its EPS came in at $0.01, compared to a $0.01 loss per share.
For its fiscal 2022, analysts expect NABL’s revenue and EPS to increase 12.6% and 5.3%, respectively, year-over-year to $389.42 million and $0.40. The stock has declined by 14.8% over the past three months to close the last trading session at $11.72.
NABL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. It has a B grade for Growth and Sentiment. Within the Technology – Services industry, it is ranked #18.
Materialise NV (MTLS)
Based in Leuven, Belgium, MTLS provides additive manufacturing and medical software and 3D printing services across the U.S., Europe, Africa, and the Asia-Pacific. It operates through three segments: Materialise Software; Materialise Medical; and Materialise Manufacturing.
On November 15, 2021, MTLS agreed to exercise its option to acquire Link3D Inc., an additive workflow and digital manufacturing software company. Fried Vancraen, the CEO of MTLS, said, “Materialise continues to lead the way in advancing the AM industry, and this acquisition strengthens our position in the high-growth manufacturing market.”
MTLS’ revenue increased 28% year-over-year to $60.44 million for its fiscal third quarter, ended September 30, 2021. Its net income came in at €8.65 million ($9.79 million), compared to a €282,000 ($319,214) loss in the year-ago period. Also, its EPS was €0.15, compared to a €0.01 loss per share in the prior-year quarter.
MTLS’ revenue is expected to increase 11.9% year-over-year to $255.29 million in its fiscal 2022. Its EPS is expected to grow 241.7% year-over-year to $0.17 in the current year. The stock has declined 54.8% year-to-date to close the last trading session at $24.53.
It is no surprise that MTLS has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Sentiment and a B grade for Growth. MTLS is ranked #1 of 7 stocks in the Technology – 3D Printing industry.
