The increasing need to modernize processes, improve customer experiences, and stay competitive in the digital age has fueled significant demand for tech solutions. Thus, investors could consider adding fundamentally sound tech stocks trading under $10, Vimeo, Inc. (VMEO), Yext, Inc. (YEXT), and Lantronix, Inc. (LTRX), which could explode in 2025.

The tech industry is projected to experience sustained growth in 2025, propelled by progress in AI, automation, and cloud computing. The growing need for cybersecurity solutions and data-driven innovations will also contribute to this expansion. Additionally, the emergence of 5G and IoT will open up new opportunities in connectivity and digital transformation.

Moreover, the rise in adoption of public and hybrid cloud-based solutions in organizations increases system reliability and advances new realities created by the pandemic. Additionally, more enterprises are shifting to a hybrid cloud that makes use of on-premises solutions in accordance with public cloud solutions.

Considering these factors, let’s take a look at the fundamentals of the three tech stock picks.

Vimeo, Inc. (VMEO)

VMEO provides video software solutions worldwide. It provides video tools through a software-as-a-service model, which enables its users to create, collaborate, and communicate with video on a single platform.

VMEO forward EV/Sales of 1.68x is 14.6% lower than the industry average of 1.97x. Its forward EV/EBITDA multiple of 9.28 is 32.5% lower than the industry average of 13.75.

VMEO’s revenue for the nine-month period (ended September 30, 2024) increased marginally year-over-year to $313.85 million. The company reported an operating income of $17.42 million, indicating a 133% growth from the prior year period. VMEO’s net earnings came in at $25.48 million, and its earnings per share stood at $0.15, up 86.8% and 87.5% year-over-year, respectively.

Analysts expect VMEO’s EPS for the fiscal year (ended December 2024) to grow 40.4% year-over-year to $0.18; its revenue is expected to be $414.43 million. 

Shares of VMEO have plunged 25.8% over the past month to close the last trading session at $6.37.

VMEO’s POWR Ratings reflect its robust outlook. The stock has an overall rating of A, which translates 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.

VMEO has an A grade for Quality. It also has a B grade for Value and Sentiment. It is ranked #3 out of 18 stocks in the Software – SAAS industry.

In addition to the POWR Ratings we’ve stated above, we also have VMEO ratings for Momentum, Stability, and Growth. Get all VMEO ratings here.

Yext, Inc. (YEXT)

YEXT offers a cloud-based platform enabling businesses to control and update their information across various online platforms, helping them answer consumer questions and manage online reviews. The company primarily serves the healthcare, retail, and financial services industries.

YEXT’s forward EV/Sales of 1.98x is 39.2% lower than the industry average of 3.25x. Its forward EV/EBITDA multiple of 12.36 is 20.1% lower than the industry average of 15.48.

For the third quarter that ended October 31, 2024, YEXT’s revenue rose 6.9% year-over-year to $113.99 million, and its gross profit grew 34.4% from the year-ago value to $87.74 million. The company’s adjusted EBITDA came in at $23.09 million, reflecting growth of 39.9% from the prior year’s quarter.

Street expects YEXT’s revenue for the fourth quarter (ending January 2025) to grow 11.5% year-over-year to $112.77 million, and its EPS is expected to grow 32.5% year-over-year to $0.13 for the same quarter. Moreover, the company has topped the consensus EPS estimates in three of the trailing four quarters.

Over the past six months, YEXT’s stock has surged 25.9% and 18.1% over the past year to close the last trading session at $6.47.

YEXT’s robust fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

The stock has an A grade for Growth and a B for Sentiment and Quality. YEXT is ranked #4 out of 40 stocks in the B-rated Software – Business industry.

Click here to access the additional YEXT ratings (Value, Momentum, and Quality).

Lantronix, Inc. (LTRX)

LTRX develops, markets, and sells industrial and enterprise Internet of Things (IoT) products and services in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan.

LTRX’s forward EV/Sales of 0.97x is 70.2% lower than the industry average of 3.25x. Its forward EV/EBITDA multiple of 12.46 is 19.5% lower than the industry average of 15.48.

During the fiscal 2024 first quarter that ended on September 30, 2024, LTRX’s net revenue increased 24.9% year-over-year to $34.42 million. Its gross profit rose 13.6% from the year-ago value to $14.48 million. Also, LTRX’s total assets stood at $137.86 million as of September 30, 2024, compared to $136.21 million as of June 30, 2024.

Street expects LTRX’s revenue and EPS for the year ending June 2026 to increase 11.7% and 53.9% year-over-year to $152.05 million and $0.44, respectively.

LTRX’s stock gained 9.8% over the past nine months to close the last trading session at $3.47.

LTRX’s POWR Ratings reflect bright prospects. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.

The stock has an A grade for Value and a B for Momentum, Sentiment, and Growth. LTRX is ranked #8 out of 41 stocks in the Technology – Hardware industry.

In addition to the POWR Ratings highlighted above, one can access LTRX’s ratings (Stability and Quality) here.

What To Do Next?

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VMEO shares were trading at $6.26 per share on Thursday afternoon, down $0.11 (-1.73%). Year-to-date, VMEO has declined -2.19%, versus a 1.16% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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