After stellar gains in the last two years on a pandemic-driven boom, the tech industry has been under pressure since the start of this year. Concerns surrounding overvaluations, a tech bubble formation, and Fed’s hawkish stance, have caused investors to rotate out of tech stocks over the past few months. And due to escalating geopolitical tensions and other macroeconomic headwinds, surging market volatility has caused tech stocks to sink further in price lately. This is evident in the benchmark tech-heavy Nasdaq Composite index’s 19.6% decline year-to-date and 11% slump over the past month.
However, because COVID-19 cases rise again in Europe and several Asian countries, the remote working trend will likely continue globally. And given increased employee productivity and reduced overhead expenses, many businesses have been adopting a hybrid working model as a permanent structure. The increased dependency on advanced technological solutions, such as artificial intelligence (AI), 5G networking, Internet of Things (IoT), and cloud computing is expected to fuel the tech industry’s long-term growth prospects.
NICE Ltd. (NICE)
NICE is a Ra’anana, Israel-based global enterprise software provider. The company operates in two segments: Customer Engagement: and Financial Crime and Compliance. NICE provides services for contact centers, back-office operations, and retail branches to industries that include communications, banking, insurance, healthcare, business processes outsourcing (BPO), government, utilities, travel, and entertainment.
On March 10, 2022, NICE received the 2022 Best Practices Company of the Year Award in the North American Contact Center industry from Frost & Sullivan. The recognition symbolizes NICE’s continuing innovations to accelerate digital transformation, omnichannel service delivery, and customer engagement.
Also this month, NICE partnered with Zoom Video Communications Inc. (ZM) to provide an NTR-X accessibility solution for all types of communications on ZM. Regarding this, NICE Executive Vice President Chris Wooten said, “Our solution for Zoom continues to reinforce the fact that firms can put their trust in NICE and NTR-X for compliance recording coverage for all types of communications, from audio and video, to screen sharing and chat.”
NICE’s non-GAAP total revenue increased 17.6% year-over-year to $515.47 million in the fourth quarter, ended Dec. 31, 2021. Its non-GAAP operating income grew 10.6% from its year-ago value to $145.60 million, while its non-GAAP net income improved 9.2% year-over-year to $116.66 million. The company’s non-GAAP EPS increased 7.5% from its year-ago value to $1.73.
Analysts expect NICE’s revenue for its fiscal year 2022 first quarter (ending March) to come in at $510.81 million, representing 11.8% year-over-year growth. The consensus $1.71 EPS estimate for the current quarter indicates an 11% improvement from the same period last year. The company has an excellent earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock has declined 31.4% in price year-to-date to close yesterday’s trading session at $202.74.
NICE’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. NICE also has a B grade for Growth, Quality, and Stability. The stock is ranked #18 of 163 stocks in the Software – Application industry.
To see additional POWR Ratings for Sentiment, Value, and Momentum for NICE, click here.
Semtech Corporation (SMTC)
SMTC is a leading supplier of analog and mixed-signal semiconductor products and advanced algorithms. Camarillo, Calif.-based SMTC operates through three segments: Signal Integrity; Wireless and Sensing; and Protection. It sells its products through its own sales and independent sales representative firms and distributors in the United States, Europe, and Asia.
On March 8, SMTC announced the production availability of GN1812 linear transimpedance amplifiers. This product is designed to enable next-generation data center single-mode connectivity and optical transceivers.
On Feb. 24, 2022, SMTC collaborated with Smart Paddock to develop its LoRa devices integrated with Paddock’s “Bluebell” smart GPS ear tag. This jointly developed product has immense applications in the agriculture industry.
SMTC’s net sales increased 26.5% year-over-year to a record $194.93 million in its fiscal third quarter, ended Oct. 31, 2021. Its operating income grew 74.2% from its year-ago value to $37.42 million, while its non-GAAP net income improved 56.8% year-over-year to $48.30 million. Its non-GAAP EPS increased 57.4% from its year-ago value to $0.74.
The $0.46 consensus EPS estimate for the fiscal fourth quarter (ended January 2022) represents a 90.6% improvement year-over-year. The $189.34 million consensus revenue estimate for the about-to-be-reported quarter indicates a 15% increase from the same period last year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
Shares of SMTC have fallen 32.3% in price year-to-date and 12.8% over the past month.
SMTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. SMTC has an A grade for Growth and a B grade for Sentiment and Quality. Among the 97 stocks in the B-rated Semiconductor & Wireless Chip industry, it is ranked #6.
Click here to see the additional POWR Ratings for SMTC (Stability, Value, and Momentum).
Vivint Smart Home, Inc. (VVNT)
Headquartered in Provo, Utah, VVNT specializes in delivering an integrated smart home system with in-home consultation, professional installation, and support, along with 24/7 customer care and monitoring. As of March 31, 2021, VVNT had approximately 1.9 million subscribers and managed approximately 26 million in-home devices.
On March 7, VVNT was recognized as the Best Home Security Company Of 2022 by Forbes Home. In addition, it was also recognized as “Best Professionally Installed Security System” for the third consecutive year by U.S. News & World Report. Thanks to its world-class product suite, these awards demonstrate VVNT’s leading position in the home security market.
On February 3, New American Funding partnered with VVNT to aid homeowners in protecting their homes by offering VVNT’s services at discounted prices. This should allow VVNT to leverage New American Funding’s customers to boost its revenues.
VVNT’s total subscribers grew 9.4% to record 1,855,141 as of Dec. 31, 2021. Its total revenue increased 19.7% year-over-year to $396.21 million in its fiscal fourth quarter, ended Dec. 31, 2021. Its total monthly recurring revenue improved 14% from the prior-year quarter to $125.20 million. And the company’s adjusted EBITDA came in at $178.40 million, up 23.4% from the same period last year.
Analysts expect VVNT’s revenue to be $384.51 million for its fiscal first quarter (ending March 2022), representing 12% growth year-over-year. In addition, the Street expects the company’s EPS to rise 21.4% in the ongoing quarter.
The stock has declined 37.5% in price year-to-date to close the last trading session at $6.25.
VVNT’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. VVNT also has a B grade for Quality and Sentiment. In addition, the stock is ranked #7 of 63 stocks in the Consumer Goods industry.
To see additional POWR Ratings for Growth, Momentum, Stability, and Value for VVNT, click here.
Want More Great Investing Ideas?
NICE shares were trading at $202.59 per share on Tuesday morning, down $0.15 (-0.07%). Year-to-date, NICE has declined -33.27%, versus a -11.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|NICE||Get Rating||Get Rating||Get Rating|
|VVNT||Get Rating||Get Rating||Get Rating|
|SMTC||Get Rating||Get Rating||Get Rating|