Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive”, and rather than looking at the stock’s face value, we have a system that puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.
That being said, low-priced stocks can be attractive to smaller investors that can’t necessarily afford large stakes in companies with higher priced stocks. When looking at these low-priced stocks, we can look at the same trends in growth, value, and momentum and apply the Zacks Rank to properly analyze the potential that these companies have.
Today we’ve highlighted three stocks that fall into the broad “technology sector.” Each of these three stocks is currently trading for less than $10 per share and holds a Zacks Rank #2 (Buy) or better ranking. Take a look at the strong estimate revision activity and other factors that make these companies stick out right now.
1. PC-Tel, Inc. (PCTI)
Prior Close: $7.84
PCTEL designs, develops, and delivers wireless solutions, including precision antennas and RF devices that are marketed towards mobile providers and industrial manufacturers. It’s shaping up to be a year of aggressive earnings growth for PC-Tel, and our current Zacks Consensus Estimate calls for EPS growth of 80% when the company reports on May 9. Overall, PC-Tel is expected to post EPS growth of 150% this fiscal year. Moreover, the stock has gained more than 13% over the past 12 weeks, and as it approaches its 52-week high, PC-Tel will hope another solid earnings report can help it break into a new range. This stock is currently a Zacks Rank #1 (Strong Buy).
2. Planet Payment, Inc. (PLPM)
Prior Close: $4.17
Planet Payment is a provider of international payment processing and multi-currency processing services. It operates in two segments—processing solutions and merchant solutions—and offers a variety of products to a range of customers with payment processing needs. We’ve seen three positive estimate revisions for the company’s full-year earnings over the past 60 days, and when it reports its quarterly results next week, our consensus estimates call for EPS growth of 33%. The stock’s solid fundamentals are underscored by its “A” grades for Value and Growth, and it currently sports a Zacks Rank #2 (Buy).
3. Extreme Networks, Inc. (EXTR)
Prior Close: $7.77
Extreme Networks is a developer of next-generation switching solutions that provide ISPs and content providers better performance at lower costs. In the upcoming report expected on May 3, the current Zacks Consensus Estimate calls for earnings of 5 cents per share—up from break-even figures in the year-ago quarter. We also expect to see revenue growth of 25% in the quarter. Extreme Networks has an impressive earnings history, beating the Zacks Consensus Estimate by an average of 104% in the trailing four quarters. For the full year, our consensus estimates call for EPS growth of 75% and revenue growth of 13%.
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A stock’s market price is not a clear indicator of whether it is a good investment. However, the nice thing about the Zacks Rank is that it can be applied to stocks of any price. For smaller investors looking to find solid tech stocks at lower prices, this list is a great place to start.
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