A number of tech stocks have been beaten down in the prior weeks. Investors who have ridden the bull market throughout the winter and spring are now taking profits off the table.
The question is whether investors have taken too much profit too quickly. Take a close look at tech stocks that have significantly declined in recent weeks, and you will find plenty appear to be oversold.
Without further ado, let’s take a quick look at two beaten-down tech stocks investors should consider before they return to higher prices: F5 Networks (FFIV) and MACOM Technology Solutions Holdings (MTSI).
F5 Networks (FFIV)
FFIV provides products for application delivery networking to enhance network applications’ security, availability, and performance. FFIV has an overall grade of B, translating into a Buy rating in our POWR Ratings system. The stock also Quality Grade of A and a Value Grade of B. If you are curious about how FFIV fares in the rest of the POWR Ratings components, including Momentum, Growth, Stability, and Sentiment, click here.
Of the 60 stocks in the Software – Business industry, FFIV is ranked 7th. You can find other top stocks in the industry by clicking here. FFIV has a reasonable forward P/E ratio of 17.92. The stock’s 52-week high is 216.15. FFIV’s 52-week low is $116.79.
FFIV’s cybersecurity services and load balancing solutions distribute online traffic across servers with the overarching goal of enhancing application performance. These solutions will be in demand for the foreseeable future, especially considering FFIV has prudently shifted its hardware tech to the cloud amidst the rise of cloud computing.
FFIV’s revenue is up 10% on a year over year basis, hitting $645 million per quarter. FFIV’s software segment jumped 20% on a year over year basis. While that figure is below the company’s forecast for growth of 35%, FFIV’s legacy segment is up an impressive 17% on a year over year basis.
MACOM Technology Solutions Holdings (MTSI)
MTSI has slid 13% in three months, making it quite the attractive play. MTSI provides power analog semiconductor solutions and related components for applications, including satellite networks and optical wireless systems. MTSI also makes lasers, modulator drivers, and silicon photonics.
MTSI has an overall grade of B, which is a Buy rating in the POWR Ratings system. The stock has grades of Bs in the Quality and Growth components. Click here to see MTSI fares in the Value, Momentum, Stability, and Sentiment. Of the 98 publicly traded companies in the Semiconductor & Wireless Chip industry, MTSI is ranked 30th. You can find other top stocks in this industry by clicking here.
Wall Street analysts are also believers in MTSI, setting an average target price of $69.33 for the stock. If MTSI moves to this price level, it will have popped by more than 12%. Two Analysts rate the stock as a Strong Buy, and seven have it as a Buy. Though MTSI has a slightly elevated forward P/E ratio of 26.66, it is somewhat justified considering the company’s industry and the fact that it is trading only $15 below its 52-week high of $69.29.
I would be remiss not to mention MTSI’s first-quarter revenue came in higher than analyst expectations, hitting an impressive $119.1 million. Analysts expected MTSI to rake in $114.5 million in the quarter.
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FFIV shares were trading at $182.95 per share on Friday afternoon, up $0.86 (+0.47%). Year-to-date, FFIV has gained 3.98%, versus a 13.20% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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