The S&P 500 has climbed roughly 15% this year, driven by growth from tech giants such as Netflix NFLX. With that said, it might be time to dive back into technology stocks that look poised for strong growth within industries set to continue to boom.
Therefore, we have highlighted three tech stocks that investors might want to consider buying right now that offer exposure to the internet of things, cloud computing, and cybersecurity. All of these stocks also sport a Zacks Rank #2 (Buy) or better right now.
1. Zebra Technologies Corporation ZBRA
Zebra Technologies sells tablets, barcode scanners, RFID products, location-tracking tech, and much more to a variety of industries, including healthcare, retail, transportation, and manufacturing. The Lincolnshire, Illinois-based firm boasts over 10,000 clients around the world and seems set to expand as part of the continued expansion of IoT and cloud computing. Shares of ZBRA have soared 40% this year and roughly 60% over the last 12 months. The climb has helped the firm reach multiple new highs throughout 2019, including Friday.
Looking ahead, Zebra’s adjusted first-quarter earnings are projected to jump 12.1% on the back of 7.7% revenue growth, based on our current Zacks Consensus Estimates. Meanwhile, the company’s fiscal 2019 revenue is expected to pop over 6% to hit $4.47 billion, with its EPS figure projected to climb 13.4%. On top of its solid bottom-line growth estimates, Zebra’s earnings estimate revision activity has trended completely in the right direction recently to help ZBRA earn a Zacks Rank #1 (Strong Buy) at the moment.
The company also sports an “A” grade for Growth in our Style Scores system. Plus, the Manufacturing - Thermal Products industry that it is a part of sits in the top 4% of our 256 Zacks industries, which is often a good sign as stocks in hot industries have a better chance of climbing as part of broader momentum. Furthermore, Zebra is trading right near its industry’s average at 17.9X forward 12-month Zacks Consensus EPS estimates and its price/sales ratio of 2.73 is hardly that stretched compared to some of its peers, especially considering its impressive 12-month climb.
2. Palo Alto Networks PANW
Palo Alto Networks is a pure-play cybersecurity firm that boasts over 60,000 customers around the world. The Santa Clara, California-based company has worked with 85 Fortune 100 firms and has partnered with Amazon, Google GOOGL, and Microsoft MSFT to help secure their massive public clouds. The company’s firewall technology has been an industry leader for years and helped its fiscal 2018 revenue surge 29% to $2.3 billion. PANW competes alongside companies such as Cisco CSCO and McAfee and looks set to grow as digital crime and cybersecurity threats mount.
The company also offers threat prevention services and end-point protection to secure desktops, laptops, mobile devices, and other similar products. Shares of Palo Alto Networks have jumped over 26% to start the year, yet still rest roughly 9% below their 52-week high. The company’s third-quarter fiscal 2019 revenue is projected to jump 24%, with full-year sales expected to climb over 26% to reach $2.87 billion. Meanwhile, at the bottom end of the income statement, PANW’s adjusted earnings are expected to surge 26.3% this quarter. Better yet, the company’s full-year 2019 EPS figure is projected to soar roughly 37%.
Palo Alto Networks’ superb earnings estimate revision activity for fiscal 2019 and 2020 help the company earn a Zacks Rank #2 (Buy) right now. The company also boasts a strong history of quarterly earnings beats, which includes a 12% average surprise over the trailing four periods.
3. Amazon AMZN
Amazon has seen its stock price climb over 22% this year, alongside comebacks from fellow FAANG powers. Despite the strong start, AMZN stock sits roughly 11% below its 52-week high to help give shares room to run heading into Q1 earnings. Jeff Bezos’ company is expected to see its adjusted Q1 2019 earnings soar roughly 41%. The e-commerce power is also projected to see its adjusted full-year EPS figure jump 33% and surge 50% higher than our 2019 estimate in the following year.
Furthermore, AMZN’s quarterly revenue is projected to pop 16.8%. This would mark a slowdown from Q4’s 20% sales growth, which was already Amazon’s smallest top-line expansion since 2015. Despite slowing revenue expansion, Amazon is still projected to see its full-year sales jump over 18% to $275.58 billion and its fiscal 2020 revenue is expected to surge 17.5% higher than our current year estimate.
On top of that, Amazon remains the undisputed cloud computing champion, crushing its closest competitors Microsoft, IBM, and Google. And its share of the total U.S. e-commerce market is projected to reach 52.4% in 2019, up from 48% last year, according to eMarketer. The company is also set to grow its digital advertising business and its streaming TV service, while also expanding its pharmaceutical offerings and logistics services. Amazon is currently a Zacks Rank #2 (Buy) that rocks “A” grades for Growth and Momentum. Lastly, the firm has started to trade at a more reasonable P/E and its 3.84 P/S ratio sits well below its Chinese counterpart Alibaba’s BABA 8.86.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Zebra Technologies Corporation (ZBRA) : Free Stock Analysis Report
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