While many investors are clamoring for the most popular tech stocks to buy, it’s vital to recognize that many of these equities have already posted staggering gains. With the economic landscape currently dotted with concerns — from persistent inflation to alarming job cuts — it might be wise to turn our attention towards more inconspicuous opportunities. The question beckons: can we unearth tech stocks to buy on the dip?
The short answer is a resounding yes. The vast sea of the equities market, brimming with thousands of publicly traded entities, ensures that not every company receives its due spotlight. This imbalance often means some true innovators remain overlooked.
Seeking these unsung heroes, I turned to the TipRanks stock screener tool. This invaluable platform lets me zero in on firms that the media largely ignores. Couple that with favorable reviews from industry analysts, and we may just have a winning strategy for identifying tech stocks to buy on the dip.
Tech Stocks to Buy: Gen Digital (GEN)
Cybersecurity, an increasingly crucial domain, features notable players like Gen Digital (NASDAQ:GEN). This multinational entity offers state-of-the-art cybersecurity software and services, aiming to thwart the persistent rise of cyber threats. Despite its significant contributions, the market has been less than kind, with GEN shedding over 12% of its equity value.
For discerning investors, this downturn might signal a golden opportunity. When assessing GEN as one of the tech stocks to buy on the dip, the numbers tell a compelling story. Financially, it trades at a mere 9.67x forward earnings, making it appear undervalued compared to its sector’s median of 23.23x.
Investment platforms like Gurufocus hint at a potential value trap, but a deeper look into GEN’s performance presents an opposing narrative. A notable operating margin of over 39% and consistent revenue growth suggest resilience and profitability. Analysts seem to concur, leaning towards a moderate buy, with an average target of $22.33, hinting at an enticing potential upside.
Zebra Technologies (ZBRA)
In the dynamic domain of mobile computing, Zebra Technologies (NASDAQ:ZBRA) stands out. The company is renowned for its real-time smart data capture, a linchpin in autonomy and artificial intelligence. Despite its palpable relevance, the start of the year saw ZBRA’s shares dip by 3%.
However, a deeper dive into its fundamentals and performance could place ZBRA squarely on the list of tech stocks to buy on the dip. Financially speaking, the firm boasts an impressive three-year revenue growth rate, outpacing a majority of its industry peers. Couple that with a net margin hovering around 12%, and ZBRA’s profitability potential becomes evident.
While certain metrics seem to demand a premium, the company trades at a favorable 0.65x against discounted cash flow. In the world of market analysis, the sentiment around ZBRA leans heavily towards a strong buy. The consensus hints at a target of $301.86, offering promising growth potential.
Tech Stocks to Buy: NetEase (NTES)
NetEase (NASDAQ:NTES), the prominent Chinese internet technology company, delivers an intriguing mix of content, social media, and e-commerce solutions. Despite having enjoyed a robust increase in equity value of nearly 33% since the start of the year, a deeper dive suggests that this growth trajectory might not have reached its zenith just yet.
Central to this optimism is the company’s solid financials. With a three-year revenue growth rate of 17.3%, NetEase outpaces 67.38% of its peers. Its free cash flow growth during the same timeframe is equally impressive, outclassing 66% of competitors. Admittedly, not all of NetEase’s multiples immediately catch the eye. However, it trades at just 0.62x discounted cash flow offering a compelling proposition, especially when compared to 60.61% of its industry counterparts.
Given these factors, it’s no surprise that analysts are bullish, awarding NTES a unanimous strong buy rating. With an average price target of $126.18, the potential for roughly 25% upside becomes hard to ignore. Those at the more optimistic end even see room for over 33% growth, setting sights on $135.
Tencent Music Entertainment (TME)
Navigating the vast expanse of China’s music streaming landscape, Tencent Music Entertainment (NYSE:TME) has undeniably cemented its relevance. Yet, despite the inherent promise of operating within the world’s second-largest economy, TME shares have shed almost 28% of their value this year. A cloud of uncertainty surrounding the Chinese economy casts a shadow on many native entities, and TME hasn’t been immune.
However, discerning investors might see this red ink as an invitation, potentially making TME one of the tech stocks to buy on the dip. The company’s financial health is a significant part of the allure. With a rock-solid balance sheet and a commendable net margin of 16%, TME outshines about 82% of its competitors.
The stock’s valuation metrics further bolster its case: a trailing earnings multiple of 14.95x, a forward multiple of 11.55x, and a particularly compelling 8.89X free cash flow, especially when compared against a sector median of 18.71x. Echoing this sentiment, analysts grant TME a moderate buy rating. Their average price target stands at $8.04, suggesting that there’s room for a leap of over 29%.
Tech Stocks to Buy: Box (BOX)
Emerging from the heart of California’s tech hub, Redwood City, Box (NYSE:BOX) crafts and markets its cloud-centric tools, focusing on content management, collaboration, and file sharing tailored for businesses. The offering might sound pivotal for enterprises, but, ironically, BOX’s stock performance tells a different story. This year has been brutal, with the equity shedding nearly 22% of its value, a staggering 19% of which was lost in just the past month.
Though these metrics push BOX into the risky territory of tech stocks to buy on the dip, they’ve also produced some alluring valuation numbers. BOX’s 16.21x forward earnings multiple sits comfortably below the sector median of 23.23x.
Similarly, a 12.54x FCF adds another dimension of attractiveness, given its contrast to the 23.67x sector median. However, investing isn’t just about figures. Box’s high debt, looming large over its balance sheet, is a concern. Still, analysts aren’t entirely downcast. BOX has been labeled a moderate buy, with a $32 price target. This projection hints at an upside potential nearing the 31% mark.
As pioneers in the realm of action cameras, GoPro (NASDAQ:GPRO) introduced a new dimension to consumer tech. The brand’s explosive success spawned a multitude of copycats. But as they say, imitation is the sincerest form of flattery. GoPro’s unique brand value seems here to stay, even if investors are somewhat skittish about GPRO stock.
The equities graph for GoPro has been in a freefall, with a drop of almost 32% since the year’s start. While the post-pandemic era initially boosted GPRO, setting it on an upward trajectory in early 2021, the graph has trended downward since. The smartphone revolution, boasting ever-improving integrated camera tech, could be relegating GoPro to the sidelines.
However, potential tailwinds like the revenge travel trend could inject new life into GoPro’s sales. This possible resurgence makes GPRO’s sales multiple of 0.57x – undershooting about 77% of its peers – all the more enticing. Further, GPRO’s 0.94x book value is lower than 77.28% of its industry counterparts. Reflecting a blend of optimism and caution, analysts have accorded GPRO a moderate buy rating. They’ve also set an average price target of $5.15, suggesting a tempting 48% upside potential.
SkyWater Technology (SKYT)
Nestled in Bloomington, Minnesota, SkyWater Technology (NASDAQ:SKYT) stands as a beacon in the semiconductor engineering and fabrication sector. Distinguishing itself further, it wears the badge of being the only pure-play silicon foundry that’s entirely U.S.-owned. Given the tense, politically charged backdrop that characterizes today’s global semiconductor supply chain, one could argue there’s no understating of SkyWater’s importance.
However, as the markets often remind us, relevance isn’t always synonymous with stock performance. A glance at SKYT’s performance chart reveals a slump of over 19% since the onset of this year. Extend that view to a year, and the decline sharpens to a concerning 27%. The stock’s trajectory has undeniably been on a downtrend, planting SKYT firmly in the “risky” category of tech stocks to buy.
Yet, for the more audacious investors out there, SKYT presents a tantalizing proposition. It currently trades at just 1.05x its trailing sales, a figure that sits in stark contrast to the sector’s median of 2.71x. While its 13.2% revenue growth may not have investors leaping from their chairs, it’s still above average. Moreover, recent quarterly outputs hint at a promising trajectory for SkyWater.
When we turn to the analysts’ corner, the sentiment mirrors cautious optimism. They’ve labeled SKYT as a moderate buy, setting the crosshairs on an $18 price target. If realized, that would mean a staggering 201% upside.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.