Technology stocks can offer investors some of the biggest returns due to explosive growth. In fact, the tech sector is forecasted to increase profits as the highest rate for the 11 S&P sectors. Analysts forecast operational earning growth of more than 21% through next year. Financials and Health Care are the closest at approximately 16%.
We’ve identified three technology stocks with projected profit and revenue growth of at least 20% for this year and next.
Companies that should be on your watchlist:
Endava plc (DAVA)
Located in London, England, Endava is a leading next-generation technology services provider that helps accelerate disruption by delivering rapid evolution to enterprises. They help clients in finding new ways to interact with their customers and users, enabling them to become more engaging, responsive, and efficient.
Wall Street sees DAVA increasing their earnings per share (EPS) 20.32% to $1.87 in 2022 from $1.55 in 2021. Meanwhile, revenue is forecasted to climb 21.76% from $589.56 billion this year to $717.82 next year. (1) Profits per share could come in better than expected as the software company has exceeded forecast in each of the last four quarters (2).
If DAVA hits Wall Street’s 2022 top and bottom-line targets and trades at its current price to earnings (P/E) ratio of 93.72 and price to sales (P/S) ratio of 8.88, then shares could reach $175.26 and $114.76, respectively. DAVA is $80.83 as we type.
TechTarget, Inc. (TTGT)
TechTarget is the global leader in purchase intent-driven marketing and sales services that deliver business impact for enterprise technology companies. By creating abundant, high-quality editorial content across more than 140 highly targeted technology-specific websites, TechTarget attracts and nurtures communities of technology buyers researching their companies’ information technology needs. By understanding these buyers’ content consumption behaviors, TechTarget creates the purchase intent insights that fuel efficient and effective marketing and sales activities for clients around the world.
The communications services company is expected to increase its EPS to $1.68 this year, up dramatically from $1.23 in 2020. Sales are forecasted to grow at a robust 57% in 2021 versus last year’s top line of $148.38 million. (3)
Today, shares of the tech stock trace at $71.85. In the past 52-weeks, TTGT has been as low as $20.51 and as high as $101.12. Analysts see continued healthy gains for investors as the consensus one-year price target is $103.50. (4)
Universal Display Corporation (OLED)
Universal Display Corporation is a leader in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. Founded in 1994, the Company currently owns, exclusively licenses, or has the sole right to sublicense more than 5,000 patents issued and pending worldwide.
Demand for OLED’s technologies is surging. Sales are expected to increase 29.10% in 2021 compared to 2020 and rise another 23.90% in 2022. A soaring top line usually translates to a healthy bottom line. Analysts forecast earnings per share to step up a robust 41% this year and another 35% in 2022. (5)
At the moment, OLED exchanges hands at 85.05 times earnings and 26.23 times sales. If management can hit Wall Street’s 2022 earnings target of $5.33 per share, then the stock could hit $453.32, more than double its current price of $240.45.
Technology sales and profits are expected to outpace the overall market in the next couple of years. Endava plc (DAVA), TechTarget, Inc. (TTGT) and Universal Display Corporation (OLED) are companies that should continue to benefit from a positive business environment and three companies that investors should consider adding to their watchlists.
1 – https://www.zacks.com/stock/quote/DAVA/detailed-estimates
2 – https://finance.yahoo.com/quote/DAVA/analysis?p=DAVA
3 – https://finance.yahoo.com/quote/TTGT/analysis?p=TTGT
4 – https://finance.yahoo.com/quote/TTGT?p=TTGT
5 – https://finance.yahoo.com/quote/OLED/analysis?p=OLED