The technology industry serves as the catalyst for global innovation, seamlessly linking individuals and businesses with cutting-edge solutions and fostering continuous progress. So, I think investors could consider grabbing top tech stocks LiveRamp Holdings, Inc. (RAMP), Daktronics, Inc. (DAKT) and Eltek Ltd. (ELTK) this month.
The technology industry is a dynamic and ever-changing field that encompasses creating, developing, and distributing technological products and services. Moreover, the increasing demand for cloud services and infrastructure upgrading activities significantly drives the demand for managed IT services across the market.
The IT Services market in the US is anticipated to reach a revenue of $454.70 billion in 2023, with IT Outsourcing dominating at a projected $167.90 billion. The industry is expected to expand at a CAGR of 6.7% to reach $628.80 billion by 2028.
Worldwide, the IT Services market is anticipated to achieve a projected revenue of $1.24 trillion this year. The growth is expected to expand at a CAGR of 7.4% to reach revenue of $1.77 trillion by 2028.
In addition, the expansion of the IT industry is fuelling a demand for sophisticated and effective IT hardware solutions. Concurrently, ongoing innovations in IT hardware, including accelerated processors, expanded storage capacities, refined networking technologies, and energy-efficient designs, are compelling businesses to upgrade and elevate their IT infrastructure.
As a result, the global IT Hardware Market is expected to grow from $121.32 billion in 2023 to $177.11 billion by 2028, expanding at a CAGR of 7.9%.
Considering these conducive trends, let’s look at the fundamentals of the three best tech stocks, starting with number 3.
LiveRamp Holdings, Inc. (RAMP)
RAMP is a global technology company operating a data collaboration platform. The company’s platform enables organizations to unify customer data while prioritizing privacy. It provides people-based marketing solutions, serving diverse industries such as finance, insurance, retail, automotive, and healthcare.
RAMP’s trailing-12-month gross profit margin of 72.05% is 46.6% higher than the industry average of 49.14%. Its 23.86% trailing-12-month levered FCF margin is 202.2% higher than the 7.90% industry average.
On October 17, RAMP launched its new partner solution for identity integration with AWS Entity Resolution by Amazon Web Services (AWS) to increase market interoperability.
With this integration, marketers, publishers, tech platforms, and agencies can extend the data interoperability in the cloud to marketing and advertising destinations using RampID™, RAMP’s durable, privacy-centric identifier connecting clients to the digital and martech ecosystem.
On October 16, 2023, RAMP and Yahoo expanded their collaboration to improve advertising addressability. Publishers who use RAMP’s Authenticated Traffic Solution (ATS) can now use Yahoo ConnectID to increase demand. Through Yahoo ConnectID, brands using the Yahoo DSP can expand their reach.
The partnership enables authenticated addressability across platforms, allowing for deeper customer relationships and data control. The collaboration aims to increase the reach of authenticated users while providing marketers and publishers with seamless transactions across the open web.
During the second quarter ended September 30, 2023, the company’s revenues grew 8.7% year-over-year to $159.87 billion. Its non-GAAP net earnings from continuing operations amounted to $29.13 billion, up 96% from the year-ago quarter. RAMP earned non-GAAP EPS from continuing operations of $0.43, up 95.5% year-over-year. Also, its adjusted EBITDA grew 77.7% year-over-year to $32.38 billion.
In the third quarter of fiscal year 2024, RAMP expects to report $165 million in revenue, a 4% increase, with non-GAAP operating income of $29 million.
Analysts expect RAMP’s revenue and EPS to grow 4.2% and 26.7% year-over-year to $165.27 million and $0.35 for the third quarter ended December 2023. The company has surpassed the revenue and EPS estimates in each of the trailing three quarters and four quarters, respectively, which is impressive.
The stock has soared 65.6% over the past year and 43.6% year-to-date to close the last trading session at $33.65.
RAMP’s POWR Ratings reflect this positive outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
RAMP has an A grade for Sentiment and a B for Growth and Quality. Within the Technology – Services industry, it is ranked #3 out of 72 stocks.
In addition to the POWR Ratings stated above, one can access RAMP’s additional Value, Momentum and Stability ratings here.
Daktronics, Inc. (DAKT)
DAKT designs and manufactures electronic display systems for various applications globally, including sporting events, commercial spaces, and transportation. Its product range includes video displays, scoreboards, intelligent transportation systems, and digital billboards, complemented by software solutions like the Venus control suite.
DAKT’s trailing-12-month EBIT margin of 8.80% is 89.4% higher than the industry average of 4.65%. Its 10.96% trailing-12-month EBITDA margin is 21.2% higher than the 9.04% industry average.
On August 4, DAKT announced the installation of 14 new LED displays at Gillette Stadium, which includes the largest outdoor videoboard in any sports venue in the country.
The recent additions have increased the digital space at the stadium by 29,500 square feet, resulting in a total of 47 DAKT LED displays. This expansion brings the overall digital canvas within Gillette Stadium to an impressive 48,500 square feet.
For its first quarter, which ended July 29, 2023, its net sales and gross profit grew 35.3% and 175.8% year-over-year to $232.53 billion and $71.15 billion, respectively. The company generated adjusted net income of $28.75 billion, up 639.7% year-over-year. Its EPS and free cash flow grew 450% and 144.5% year-over-year to $0.42 and $14.73 billion, respectively.
The stock has soared 186.4% over the past year and 265.6% year-to-date to close the last trading session at $10.31.
DAKT’s POWR Ratings reflect this sound outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
DAKT has an A grade for Value and a B for Growth, Sentiment, and Quality. Within the B-rated Technology – Hardware industry, it is ranked #1 out of 38 stocks.
To see DAKT’s additional POWR Ratings for Momentum and Stability, click here.
Eltek Ltd. (ELTK)
Headquartered in Petach Tikva, Israel, ELTK is a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), serving industries like defense, aerospace, medical, industrial, and telecom. It offers custom-designed rigid, double-sided, and multi-layer PCBs, as well as flexible circuit boards. ELTK markets its products through direct sales, sales representatives, and partnerships with PCB trading and manufacturing companies.
RAMP’s trailing-12-month EBIT margin of 11.44% is 146.3% higher than the industry average of 4.65%. Its 14.42% trailing-12-month EBITDA margin is 59.5% higher than the 9.04% industry average.
On September 20, 2023, ELTK secured a $2.90 million purchase order from an existing customer. The order, resulting from a four-year product development process, will be fulfilled over 16 months starting in February 2024. The technological advancements achieved during this project will pave the way for more high-complexity orders from other customers in the future.
In the second quarter ended June 30, 2023, ELTK’s revenue amounted to $11.04 million, up 21.5% year-over-year. Its gross and operating profits increased 75.9% and 302.9% year-over-year to $2.95 million and $1.39 million, respectively. The company achieved net income of $1.31 million, up 74.4% year-over-year. Moreover, its non-GAAP EBITDA grew 114.3% year-over-year to $1.70 million.
Street expects ELTK’s revenue and EPS to be $11.90 million and $0.31 for the third quarter that ended September 2023.
Shares of ELTK increased 207.6% over the past year and 175.9% year-to-date to close the last trading session at $11.35.
ELTK’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
ELTK has an A grade for Sentiment and Quality and a B for Growth and Momentum. It is ranked #3 among 39 stocks in the B-rated Technology – Electronics industry.
Click here for ELTK’s additional Value and Stability ratings.
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RAMP shares were trading at $33.05 per share on Monday morning, down $0.60 (-1.78%). Year-to-date, RAMP has gained 41.00%, versus a 16.62% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...
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