3 Next-Gen Tech Stocks to Buy for Long-Term Wealth


  • These tech companies evolve and adapt to the next-generation demands of the digital age. 
  • Ring Energy (REI): The oil company exceeded sales guidance and hit record production.
  • Palantir Technologies (PLTR): The artificial intelligence company attained a solid adjusted operating margin, marking constant margin expansion.
  • Mitek Systems (MITK): The company focuses on top-line diversification and strong gross margins.
Next-Gen Tech Stocks to Buy - 3 Next-Gen Tech Stocks to Buy for Long-Term Wealth

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Finding profitable ventures that guarantee long-term wealth-building is still crucial. Three next-generation tech stocks have stood out as promising investments throughout this hunt. These companies, which are involved in software development, information technology and energy, provide solid prospects for expansion and long-term financial success.

The first one has outstanding success, exceeding sales volume targets, which indicates strong asset management and operational competence. Meanwhile, the second company’s adjusted, solid operating margin and steadily rising Rule of 40 scores demonstrate its ability to balance profitability and expansion, an uncommon accomplishment in the tech sector. Typically applied to software-as-a-service (SaaS) businesses, the Rule of 40 says a company’s revenue growth plus profit margin should equal or exceed 40%.

The third one, with its great revenue diversification and good gross margins, also reiterates its revenue projection for 2024.

Overall, these companies are influencing the direction of their respective sectors, not just surfing the tides of technical innovation. Investors have a rare opportunity to position themselves for significant gains in the years to come, with the first company optimizing production assets, the second mastering the art of balancing growth and profitability, and the third diversifying revenue streams while maintaining strong margins.

Ring Energy (REI)

miniature oil barrel and oil well figures on top of stack of money
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Ring Energy (NYSEMKT:REI) sold 13,394 barrels of oil per day (Bo/d) in Q1 2024. This was 5% more than the company had projected. With oil holding for 70% of the mix, total sales volumes reached 19,034 barrels of oil equivalent per day (Boe/d), surpassing the upper end of the forecast by 3%. Sales volumes that are higher than anticipated are a sign of efficient operations and well-managed manufacturing assets. Indeed, this performance indicates Ring Energy’s capacity to meet its production goals regularly, which is critical for increasing revenue and boosting valuations. 

At $10.60 per boe, lease operating expense (LOE) per boe was less than the lower end of the projection range. The $36.3 million in capital expenditures (capex) was less than the lower end of Ring’s projected range. The company’s dedication to cost control and operational edge is demonstrated by its ability to sustain lower-than-expected LOE and capex.

Overall, through efficient cost management, Ring Energy can improve profitability and maintain cash flow. Hence, this may fortify its financial standing and bolster its expansion plans.

Palantir Technologies (PLTR)

Palantir logo on the smartphone and the company share price on the day of opening the trade October 1, 2020. Palantir valued at $15.8bn in stock market debut. PLTR stock
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Palantir Technologies (NYSE:PLTR) had great unit economics and operational edge in Q1 2024, demonstrated by the substantially adjusted operating margin of 36%. The company’s adjusted operating margins increased for the sixth consecutive quarter, indicating a sustained expansion of its margins.

Additionally, Palantir’s Rule of 40 score was 57% in Q1. The Rule assesses how well revenue growth and profitability are balanced. Further, the company has a striking balance between top-line growth and bottom-line profitability, reflected in this score. Over the last three quarters, Palantir’s Rule of 40 score has steadily rise. This demonstrates the company’s fundamental capacity to maintain expansion while boosting the bottom line.

Palantir demonstrated robust financial performance in Q1 2024, with solid operational margins and cash flows. The company generated $149 million in adjusted free cash flow and $130 million in cash from operations, translating to 23% and 20% margins, respectively. With a substantial cash reserve of $3.9 billion in cash and short-term securities, Palantir is well-positioned for future projects.

Finally, this solid financial position and the company’s upward revision of its full-year 2024 revenue projection to between $2.677 billion and $2.689 billion instills optimism in Palantir’s potential.

Mitek Systems (MITK)

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The sales projection for Mitek Systems (NASDAQ:MITK) for 2024 is $180 million to $185 million. Here, the non-GAAP operating margin is projected at 30.0% to 31.0%. It reiterates its revenue projections and non-GAAP operating margin objectives for 2024, showing Mitek’s confidence in future growth.

Additionally, Mitek reduces the risks associated with relying on a single product or market by diversifying its top-line product sectors, including deposits and identities. Moreover, the company may continue to utilize various income sources for growth. This is reflected in the rise in deposit revenue, which is mostly due to mobile deposit reorders and consistent identification revenue growth.

Further, with hardware and software gross margins approaching 100%, the gross margin was steady at 87% in Q2 2024. The large gross margins for hardware and software highlight the profitability of these product categories. These are essential for maintaining growth and funding further innovation.

Finally, Mitek’s 2024 non-GAAP operating margin target ranges from 30% to 31%. Further, in the second half of 2024, the company expects a margin increase, driven by growth in revenue from new products and adjusted operating expenses.

As of this writing, Yiannis Zourmpanos held a long position in PLTR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/3-next-gen-tech-stocks-to-buy-for-long-term-wealth/.

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