If you’re looking for a discount in the innovation space, we have beaten-down tech stocks that you’ll want to keep on your radar. It’s quite possible that the Federal Reserve has given speculators something to cheer about.
Now, it’s fair to say that few investors like to see red ink – unless we’re talking about folks who missed the boat. In that case, these tardy individuals won’t have to rue opportunities that slipped through their fingers. Instead, they can target compelling ideas – ideas that are backed by analyst buy ratings – on discount.
After all, you won’t insist on paying full retail if you don’t have to. It’s the same thing here. Below are beaten-down tech stocks to add to your wish list.
Workiva (WK)
Operating in the application software industry, Workiva (NYSE:WK) provides cloud-based reporting solutions. It offers a multi-tenant cloud software that provides data-lining capabilities. It also offers many other services, such as audit trails and access management. Financially, Workiva’s main strength is arguably its top-line expansion. In the past three years, its revenue growth rate came in at 17.1%.
For the current fiscal year, covering experts anticipate earnings per share of 60 cents. That’s a far cry from last year’s result of 42 cents in the red. On the top line, they’re seeking revenue of $720.8 million. That’s up 14.4% from 2023’s haul of $630.04 million. Further, the most optimistic target calls for sales of $722.23 million.
Given the relevance of the business combined with the impressive growth rate, WK isn’t trading at a discount. Specifically, its trailing-year revenue multiple comes in at 6.77X. However, it’s fair to point out that in the first quarter of 2023, the multiple had soared to over 10X.
Analysts rate shares a consensus strong buy with a $103.25 average price target. It’s one of the beaten-down tech stocks to consider.
Concentrix (CNXC)
Specializing in the information technology services category, Concentrix (NASDAQ:CNXC) engages in the provision of tech-infused customer experience (or CX) solutions worldwide. It aims to optimize processes and provide automated solutions wherever possible to boost its enterprise-level clients’ bottom line. Concentrix is consistently profitable compared to other tech firms. It also benefits from solid revenue growth.
For fiscal 2024, covering experts believe that EPS will land at $11.91. That’s a solid improvement over last year’s result of $11.45. Also, the high-side estimate calls for earnings of $12.10 per share. On the top line, the Wall Street suits are looking for revenue of $9.6 billion, up 34.9% from last year’s print of $7.11 billion.
Interestingly, if you’re looking for a fundamental discount among beaten-down stocks (and not just a “chart” discount), CNXC trades for only 0.4X trailing-year revenue. That’s well below the sector median of 2.27X.
Analysts peg shares a consensus moderate buy with an $88.50 price target. It’s worth considering since the market isn’t respecting the anticipated revenue growth in fiscal 2024.
Corsair Gaming (CRSR)
Focused on the computer hardware space, Corsair Gaming (NASDAQ:CRSR) designs, develops, markets and sells gaming and streaming peripherals, components and systems. Per its public profile, Corsair offers gaming keyboards, mice, headsets, controllers, capture cards and stream decks. Financially, it’s not the most robust enterprise, with CRSR moving higher based on the underlying gaming narrative.
Still, that’s not necessarily a bad thing. Both gaming and streaming have become wildly popular and Corsair resonates with many customers. For fiscal 2024, analysts anticipate that revenue will land at $1.53 billion. That’s up almost 5% from last year’s tally of $1.46 billion. However, the meat of the growth may occur in fiscal 2025. That’s when sales could rise to $1.69 billion.
Currently, CRSR trades at 0.82X trailing-year revenue. That’s low compared to the computer hardware industry. Corsair suffered a demand hit in 2022 and is steadily recovering. Still, given the projected growth, CRSR appears to be trading at a decent discount.
Analysts rate shares a consensus moderate buy with a $15.50 price target, implying almost 38% upside potential. It’s one of the beaten-down tech stocks to consider.
Gilat (GILT)
Falling under the communication equipment category, Gilat (NASDAQ:GILT) provides satellite-based broadband communication solutions in multiple markets, including the U.S. and its home market of Israel. The business is part of the broader space economy, offering solutions such as cloud-based satellite network platforms and on-the-move antennas. Operationally, its core strength lies in its 16.2% three-year revenue growth rate.
Looking to the end of the year, analysts believe that EPS will hit 33 cents. That’s a bit off from last year’s result of 41 cents. However, the focus is on the top line, with sales projected to reach $315.2 million. If so, that would be up 18.5% from 2023’s tally of $266.09 million. For fiscal 2025, EPS could rise to 39 cents on revenue of $340.5 million. That would be up 8% from forecasted 2024 sales.
What’s enticing about GILT stock is that it’s undervalued, though many observers warn that it’s a value trap. Right now, shares trade for only 1.06X trailing-year revenue. And back in Q2 2023, the multiple stood at 1.43X.
Given the burgeoning space economy, I see value here (not a trap). Therefore, it’s one of the beaten-down tech stocks to put on your watch list.
Upland Software (UPLD)
Working in the field of software application, Upland Software (NASDAQ:UPLD) provides cloud-based solutions. Specifically, its innovations enable enterprises to plan, manage and execute projects. It also helps multiple arms within an organization – marketing, sales, contact centers, project management and so on – to work seamlessly and be more productive and efficient.
Operationally, Upland is significantly a narrative play – it aims to make its clients better. Given the lack of fiscal girth, UPLD represents one of the riskiest ideas among beaten-down tech stocks. Still, the upside could be tremendous. However, the issue right now centers on the current economic environment. With companies laying off their workers, they may not be in a mood for process management expenditures.
That’s why for fiscal years 2024 and 2025, analysts see “negative” growth compared to 2023’s revenue of $297.85 million. Frankly, the economy needs to cooperate for Upland to rise.
Nevertheless, analysts rate shares a consensus moderate buy with a $7 price target. That implies over 241% upside potential. If you’re looking for a grand-slam swing, UPLD could be one of the beaten-down tech stocks to buy.
3D Systems (DDD)
Diving further into the extremely speculative section of beaten-down tech stocks, 3D Systems (NYSE:DDD) operates in the computer hardware segment. Per its public profile, 3D Systems offers 3D printer technologies, such as stereolithography, selective laser sintering and direct metal printing, among many other utilitarian applications. While a relevant enterprise, it carries financial risks.
Stated differently, 3D Systems represents another narrative play. However, analysts have varying ideas about what could lie ahead. For fiscal 2024, the company could incur a loss of 13 cents per share. If so, that would be an improvement over last year’s loss of 26 cents.
On the top line, revenue could land at $481.61 million. That’s off from last year’s print of $488.07 million. However, the high-side target calls for $490 million. And in fiscal 2025, sales could rise on average to $515.09 million, with a high-side target of $534 million.
As you might expect, DDD stock is priced at a lowly sales multiple of 0.91X. However, assuming that sales rise to the upper end of the estimate spectrum, 3D Systems could be legitimately undervalued.
SoundThinking (SSTI)
Working in the software application field, SoundThinking (NASDAQ:SSTI) is a controversial enterprise. On paper, it’s a public safety technology firm, providing advisory services for law enforcement. Specifically, it offers ShotSpotter, an outdoor gunshot detection, location and altering system. However, criticisms exist regarding the platform’s accuracy and effectiveness. As well, bias is always a nagging issue with this topic.
Let’s talk about the good stuff. While SoundThinking could use some shoring up of its bottom line, it enjoys a robust top line. In fact, the company’s three-year revenue growth rate clocks in at 24.2%. That’s above 79.45% of its peers in the broader software market.
For fiscal 2024, covering analysts forecast revenue to hit $104.84 million, up 13.1% from last year’s print of $92.72 million. Further, the most optimistic target calls for $105.7 million. For 2025, experts anticipate sales to reach $114.55 million on average, with a blue-sky target of $121.6 million.
Priced at 1.79X trailing-year revenue, SSTI isn’t objectively cheap. However, do note that in Q1 2023, this multiple shot up to nearly 6X. So, it’s a relative discount among beaten-down tech stocks.
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.
