The Fed’s forthcoming interest rate hike to curb inflation is expected to keep the tech industry under pressure in the near term. However, many investors are buying the current dip because they expect tech stocks to rebound strongly in the coming months. Given the rapid digitization of virtually every industry, and emerging disruptive trends, the tech industry is expected to remain one of the biggest industries over the long term. Head of U.S. equity strategist at RBC, Lori Calvasina, said recently, “I don’t think this is the end of tech investing.”
In addition, the remote life and work culture will eventually become the norm. So, the overwhelming demand for tech and digital applications is driving the sector for the long haul. According to a Fuentitech report, the U.S. technology industry is expected to grow at a 5% CAGR through 2024.
So, we think it could be wise to bet on quality tech stocks Veeva Systems Inc. (VEEV), Open Text Corporation (OTEX), and Vontier Corporation (VNT), which are currently trading near their 52-week lows.
Veeva Systems Inc. (VEEV)
Pleasanton, Calif.-based VEEV provides cloud-based software for the life sciences industry in North America, Europe, the Asia Pacific, the Middle East, Africa, and Latin America. It is a global leader in cloud software for the life sciences industry, serving more than 1,000 customers globally.
On Dec. 13, 2021, VEEV announced that it had acquired Veracity Logic, a cloud software for randomization and trial supply management (RTSM) provider. Jim Reilly, vice president, Vault R&D, and Quality at VEEV, said, “We are pleased to have the Veracity Logic team join Veeva and look forward to bringing RTSM excellence to our customers. This expands Veeva’s clinical offering with flexible and user-friendly RTSM capabilities.”
For its third quarter, ended Oct. 31, 2021, VEEV’s total revenues increased 26.1% year-over-year to $476.11 million. The company’s non-GAAP net income came in at $158.21 million, up 26% year-over-year. Also, its non-GAAP EPS increased 24.4% year-over-year to $0.97.
Analysts expect VEEV’s revenue to be $1.85 billion in its fiscal 2022, representing a 26.1% year-over-year increase. The company’s EPS is expected to rise 25.5% to $3.69 for its fiscal 2022. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. The stock closed yesterday’s trading session at $214.58. It is currently trading 1% above its 52-week low of $212.49, which it hit on January 27, 2022.
VEEV’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
VEEV has an A grade for Quality and a B grade for Growth and Sentiment. It is ranked #23 out of 87 stocks within the Medical – Services industry. Click here to see the additional POWR Ratings for Momentum, Value, and Stability for VEEV.
Open Text Corporation (OTEX)
Based in Waterloo, Canada, OTEX provides information management software and solutions, such as OpenText security solutions, OpenText Information Management, and OpenText Developer Cloud. Also, its solutions incorporate collaborative & mobile technologies.
On Nov. 8, 2021, OTEX announced its definitive agreement to acquire Zix Corporation, Inc., a leader in SaaS-based email encryption, threat protection, and compliance cloud solutions for small- and medium-sized businesses. OTEX’s CEO & CTO Mark J. Barrenechea said, “Acquisitions of cloud growth assets like Zix highlights our commitment to our Total Growth strategy and approach to cash-based returns.”
OTEX’s total revenues increased 3.5% year-over-year to $832.31 million in its fiscal 2022 first quarter, ended Sept. 30, 2021. Its gross profit came in at $574.18 million, up 3.4% year-over-year. Its income from operations came in at $182.69 million, compared to $182.36 million in the year-ago period. Its net income came in at $131.91 million, up 27.6% year-over-year.
Analysts expect OTEX’s revenue to increase 3.2% year-over-year to $4.36 billion in its fiscal 2022. Its EPS is estimated to grow 3.9% year-over-year to $4.5 in its fiscal 2023. The stock closed yesterday’s trading session at $45.34. It is currently trading 3% above its 52-week low of $44.03, which it hit on March 5, 2021.
OTEX has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The stock also has a B grade for Value, Sentiment, Stability, Growth, and Quality. Within the Software-Application industry, it is ranked #1 of 165 stocks. Click here to see the additional POWR Ratings for Momentum for OTEX.
Vontier Corporation (VNT)
VNT in Raleigh, N.C., researches and develops, manufactures, sells, and distributes critical technical equipment, components, software, and services for manufacturing, repair, and servicing in the mobility infrastructure industry worldwide.
On Nov. 4, 2021, Mark D. Morelli, President, and CEO, stated, “We are well-positioned to deliver sustainable mobility solutions to market. Our track record of transformation and strong cash generation drive our long-term value creation flywheel and we are committed to staying laser focused on delivering more profitable growth and compounding returns.”
VNT’s sales for the third quarter, ended October 1, 2021, came in at $768.5 million, up 2.9% year-over-year. Its non-GAAP net earnings were $136.6 million, up 1.6% year-over-year, and its non-GAAP EPS remained constant at $0.80.
For its fiscal year 2022, analysts expect VNT’s revenue to increase 4.4% year-over-year to $3.14 billion. Its EPS is also estimated to increase 6% to $3.02 for fiscal 2022. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. The stock closed yesterday’s trading session at $27.21. The stock is currently trading 3% above its 52-week low of $26.41, which it hit on Jan. 27, 2022.
VNT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system.
The stock has a B grade for Value and Quality as well. Within the Industrial – Equipment industry, it is ranked #33 of 93 stocks. Click here to see the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for VNT.
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VEEV shares were trading at $221.11 per share on Friday afternoon, up $6.53 (+3.04%). Year-to-date, VEEV has declined -13.45%, versus a -8.10% 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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