Although the tech-heavy Nasdaq declined significantly earlier this month, it advanced 0.71% yesterday, representing its fifth straight day of gains, its longest daily winning streak since late August. Last month, Goldman Sachs Group, Inc. (GS) advised investors to hold on to high-growth tech stocks for long-term growth, despite market volatility.
Furthermore, as several companies extend their work-from-home arrangements due to uncertainty related to COVID-19, and businesses continue with their digital transformations, the technology industry could continue to grow for the foreseeable future. Investors’ interest in the tech stocks is evident in the Technology Select Sector SPDR Fund’s (XLK) 7.1% returns over the past three months and more than 2% gains over the past month.
So, we think it could be wise to bet on quality tech stocks eGain Corporation (EGAN), AstroNova, Inc. (ALOT), and inTEST Corporation (INTT). They are lesser-known but have significant growth potential. Moreover, they are rated A (Strong Buy) in our POWR Ratings system.
eGain Corporation (EGAN)
EGAN in Sunnyvale, Calif., develops, licenses, implements, and supports customer service infrastructure software solutions worldwide. It provides unified cloud software solutions to automate, augment, and orchestrate customer engagement. Its market capitalization is $328.34 million.
On September 1, 2021, Ashu Roy, EGAN’s CEO, said, “We are taking actions to translate our product leadership into market dominance in knowledge management and digital customer engagement, including continuing to invest in the coming year to further build out our platform API offerings, develop our partner ecosystem and expand our market coverage. We expect these investments to accelerate our growth trajectory in fiscal 2022 and beyond.”
EGAN’s total revenue increased 6.4% year-over-year to $20.25 million in the fourth quarter ended June 30, 2021. Its gross profit came in at $15.17 million, up 8.3% year-over-year. The company’s total assets were $114.56 million for the period ended June 30, 2021, compared to $93.70 million for the period ended June 30, 2020. Also, its non-GAAP EPS remained flat in the quarter at $0.08.
Analysts expect EGAN’s revenue and EPS to increase 16.6% and 1,000%, respectively, year-over-year to $103.93 million and $0.22 in its fiscal year 2023. In addition, it has surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past six months, the stock has gained 9.1% in price to close yesterday’s trading session at $10.47.
EGAN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
EGAN has an A grade for Quality, and a B grade for Stability, Value, and Sentiment. Within the Software – Application industry, it is ranked #4 out of 160 stocks. Click here to see EGAN’s ratings for Growth and Momentum as well.
Click here to check out our Software Industry Report for 2021
AstroNova, Inc. (ALOT)
With a market capitalization of $121.58 million, ALOT in West Warwick, R.I., designs, develops, manufactures, and distributes specialty printers and data acquisition and analysis systems in several countries globally. The company operates through two segments: Product Identification; (PI) and Test & Measurement (T&M).
On July 13, 2021, ALOT announced its promotion as a Tier 1 supplier by Airbus for the A320 family of commercial aircraft. Gregory A. Woods, the company’s President and CEO, commented: “Qualification as a Tier 1 supplier for the A320 is a significant accomplishment for AstroNova and our Aerospace business unit.”
For its fiscal second quarter, ended July 31, 2021, ALOT’s revenue increased 7.9% year-over-year to $29.84 million. The company’s gross profit increased 29.9% year-over-year to $12.72 million. And its operating income came in at $3.45 million, up 1,592.2% year-over-year.
ALOT’s revenue is expected to be $121.29 million for its fiscal year 2022, representing a 4.5% year-over-year rise. Moreover, its EPS is estimated to grow 566.7% in the current year to $1.20. In addition, it has surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has gained nearly 60.4% in price to close yesterday’s trading session at $16.76.
It’s no surprise that ALOT has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Value and Sentiment, and a B grade for Momentum and Quality.
ALOT is ranked #1 of 49 stocks in the B-rated Technology – Electronics industry. Click here to see the additional POWR Ratings for ALOT (Growth and Stability).
inTEST Corporation (INTT)
INTT supplies test and process solutions for manufacturing and testing in semiconductor, automotive, energy, industrial, medical, and telecommunications markets worldwide. It operates in two segments: Thermal Products (Thermal) and Electromechanical Semiconductor Products (EMS). Its market capitalization is $113.76 million. INTT is headquartered in Mount Laurel, N.J.
On August 4, INTT’s subsidiary, inTEST Thermal Solutions, collaborated with C1D1 Labs to provide the Thermonics process chiller systems in the emerging cannabis industry. This could lead to increased revenue for the company in the near term.
INTT’s total revenue increased 64.4% year-over-year to $21.82 million for its fiscal second quarter, ended June 30, 2021. Its adjusted EBITDA came in at $3.53 million, representing a 425.3% year-over-year rise. Its non-GAAP net earnings were $2.91 million, up 513.9% year-over-year. Also, its non-GAAP EPS increased 440% year-over-year to $0.27.
For fiscal 2021, analysts expect INTT’s revenue and EPS to increase 53.9% and 2,966.7% year-over-year to $82.84 million and $0.92, respectively. In addition, it surpassed the consensus EPS estimates in all the trailing four quarters. Over the past nine months, the stock has gained 53.6% to close yesterday’s trading session at $10.55.
INTT’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, equating to a Strong Buy in our POWR Rating system. Also, the stock has a B grade for Growth, Quality, Value, Momentum, and Sentiment.
Click here to see INTT’s rating for Stability as well. INTT is ranked #4 of 98 stocks in the B-rated Semiconductor & Wireless Chip industry.
Click here to checkout our Semiconductor Industry Report for 2021
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EGAN shares were trading at $10.64 per share on Wednesday morning, up $0.17 (+1.62%). Year-to-date, EGAN has declined -9.91%, versus a 22.15% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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