3 Buy-Rated Software Stocks Under $20

NASDAQ: MGIC | Magic Software Enterprises Ltd. News, Ratings, and Charts

MGIC – Legions of investors have rotated away from expensive tech stocks this year on concerns over rising inflation and to exploit the opportunity to capitalize on the economic recovery by betting on cyclical stocks. But the resulting decline in tech stock prices has created an opportunity to buy fundamentally strong software stocks at low prices. Given this industry’s massive growth potential, we think it could be wise to bet on Magic Software (MGIC), Brightcove (BCOV), and Immersion (IMMR). All three names are currently trading at below $20 per share. Read on.

Even though the majority of the software stocks generated massive returns last year on the back of an increased remote working trend amid the COVID-19 pandemic, investors have been rotating away from expensive tech stocks this year on concerns over rising inflation and to benefit from the strong upside potential of cyclical stocks amid the economic recovery. However, tech stocks’ price retreat has made the valuations of fundamentally strong software stocks reasonable now.

Because the hybrid working model is here to stay, the software industry should witness solid growth this year and beyond. It is also expected to benefit from the ongoing, global  digital transformation and increasing automation of processes across several industries, including retail, manufacturing and healthcare. According to Grand View Research, the global business software and services market is expected to grow at an 11.3% CAGR over the next seven years.

Software companies Magic Software Enterprises Ltd. (MGIC), Brightcove Inc. (BCOV), and Immersion Corporation (IMMR) have immense growth potential, but their stocks are currently trading below $20 per share. So, we think it could be wise to bet on them now.

Click here to check out our Software Industry Report for 2021

Magic Software Enterprises Ltd. (MGIC)

Headquartered in Or Yehuda, Israel, MGIC provides application development, business process integration platforms, vertical software solutions and related professional services. The company’s product portfolio includes its Magic xpa Application Platform, AppBuilder Application Platform and Magic xpi Integration Platform.

MGIC’s revenue increased 25.9% year-over-year to $107.30 million for the first quarter, ended March 31, 2021. Its non-GAAP net income for the quarter came in at $10.30 million, up 9.5% from the prior-year quarter. And its non-GAAP EPS was $0.21, which represents a 10.5% increase year-over-year.

Analysts expect MGIC’s EPS to increase 23.5% year-over-year to $0.21 for the current quarter, ending June 30. It surpassed consensus EPS estimates in each of the trailing four quarters. Its revenue is expected to increase 22.4% year-over-year to $108.97 million for the quarter ending September 30, 2021.

MGIC introduced FactoryEye to North American manufacturers in April. It is  powered by a dynamic IIoT (Industrial Internet of Things) platform. This affordable solution is expected to help mid-sized manufacturers transform data into actionable intelligence and provide visibility from the shop floor to the top floor in real time. The stock has gained 34.4% over the past year to close yesterday’s trading session at $15.52.

It’s no surprise that MGIC has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

The stock has an A grade for Stability, and a B grade for Sentiment, Momentum, Value and Growth. Click here to see MGIC’s rating for Quality also.

MGIC is ranked #5 of 125 stocks in the Software-Application industry.

Brightcove Inc. (BCOV)

BCOV is a provider of cloud-based services for the video industry. Its flagship products include Video Cloud, which is an online video platform that enables its customers to publish and distribute video to internet-connected devices. BCOV serves media, sports, and entertainment companies, broadcasters, and publishers, among others.

For the first quarter, ended March 31, 2021, BCOV’s revenues were $54.82 million, which represents a 17.5% year-over-year rise. The company’s non-GAAP net income came in at $6.22 million, up 321.9% year-over year. And its non-GAAP EPS increased 275% year-over-year to $0.15.

For its fiscal year 2021, analysts expect BCOV’s EPS to increase 33.3% year-over-year to $0.48. It surpassed consensus EPS estimates in each of the trailing four quarters. The company’s annual revenue is expected to increase 10.6% year-over-year to $237.72 million in 2022.

Last month, BCOV partnered with Chinese e-commerce giant Alibaba Group Holding Limited (BABA) to create its Brightcove China Delivery via Alibaba Cloud solution, making BCOV the first video provider in the country to enable on-demand video streaming. BCOV’s Chief Product Officer Namita Dhallan said, “We’re pleased to finally enable customers to stream video within China. No longer is there a separate, complex, and disappointing process for attempting video-driven business in China.” The stock has rallied 70.2% over the past year to close yesterday’s trading session at $13.77.

BCOV’s POWR Ratings reflects this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. It has an A grade for Value, and a B grade for Growth, Quality and Sentiment. In addition to these grades, one can see BCOV’s ratings for Stability and Momentum here.

BCOV is ranked #6 in the Software-Application industry.

Immersion Corporation (IMMR

IMMR creates, designs, develops and licenses haptic technologies that allow people to use their sense of touch when operating digital devices. Its products and services are used across several markets, including the wearables, consumer electronics, console and PC gaming, automotive, and medical markets.

The company’s total revenues came in at $7.16 million for the first quarter, ended March 31, 2021, which represents a 14.4% year-over-year rise. Its non-GAAP net income for the quarter was $2.80 million, compared to a $2.60 million loss during the same period last year. Its non-GAAP EPS was $0.10 compared to an $0.08 loss per share in the prior-year quarter.

Analysts expect IMMR’s EPS to increase 266.7% year-over-year to $0.11 for the current quarter. ending June 30, 2021. It surpassed the Street’s EPS estimates in three of the trailing four quarters. Its revenue for the quarter ending September 30, 2021, is expected to be $10.75 million, up 44.3% year-over-year.

On May 20, IMMR announced a collaborative effort to provide automotive UI designers with the ability to use Kanzi Studio with IMMR’s APIs to design haptics. This is expected to help car manufacturers test and experience haptics on a haptic-enabled HMI unit as they create their Kanzi-powered UIs for automotive touchscreens and center stack displays. The stock has gained 31.5% over the past year to close yesterday’s trading session at $8.98.

IMMR’s strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has an A grade for Quality and a B grade for Value and Growth. Click here to see the additional POWR Ratings for IMMR (Stability, Sentiment and Momentum).

IMMR is ranked #18 in the Software-Application industry.

Click here to check out our Software Industry Report for 2021

Want More Great Investing Ideas?

7 SEVERELY Undervalued Stocks

9 “Must Own” Growth Stocks for 2021

How to Trade The NEW Stock Market Bubble?

5 Ways to Beat the S&P 500


MGIC shares were trading at $15.66 per share on Friday morning, up $0.14 (+0.90%). Year-to-date, MGIC has gained 1.34%, versus a 13.75% rise in the benchmark S&P 500 index during the same period.


About the Author: Ananyo Guha Niyogi


Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
MGICGet RatingGet RatingGet Rating
BCOVGet RatingGet RatingGet Rating
IMMRGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Should Investors BEWARE this Market?

The S&P 500 (SPY) has been on a tear since November 1st when the Fed started to make their dovish tilt opening the door to future rate cuts. Unfortunately they keep not happening and start date keeps getting pushed further and further out. That has many wondering if stocks are getting ahead of themselves setting things up for a fall. Thus a good time to tune into what investment veteran Steve Reitmeister has to say about the market outlook along with his trading plan and top picks to stay ahead of the pack. Read on below for more...

Top 4 Tech Giants Poised for Explosive Growth

Fueled by the ever-growing demand for advanced technological solutions across various sectors and ongoing innovation, the tech industry has robust growth prospects. Thus, it could be wise to invest in top tech stocks Dropbox (DBX), TTM Technologies (TTMI), Lantronix (LTRX) and AstroNova (ALOT) for potential growth. Continue reading…

3 Top Rated Software Stocks to Streamline Your Investments

The software industry is thriving with soaring demand, presenting ample investment opportunities. So, fundamentally solid software stocks ServiceNow (NOW), Autodesk (ADSK), and Docebo (DCBO) might be ideal buys for promising returns. Read on...

Biotech Investors: Should You Buy, Hold, or Sell Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR)?

Despite facing several challenges, the biotech sector thrives due to growing demand for effective treatments, consistent innovations, and a sustained demand for high-quality drugs and therapies. Let's assess whether one should Buy, Hold, or Sell biotech stocks Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR). Keep reading...

Is the Bull Market Growing Tired?

On the one hand it is fun to celebrate the new highs for the S&P 500 (SPY) that came in this Tuesday. On the other hand...it doesn’t make a lot of sense calling into question the next moves for the stock market. Read on below to appreciate investment veteran, Steve Reitmeister’s, market outlook and top picks to outperform.

Read More Stories

More Magic Software Enterprises Ltd. (MGIC) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All MGIC News