U.S. stocks climbed again through morning trading Tuesday as part of a larger rally over the last serval weeks that has seen the S&P 500 jump roughly 25% from its March 23 lows. The recent positivity comes as the Fed and the U.S. government try to support the economy amid the coronavirus downturn.
On top of that, there are signs that social distancing measures are working to flatten the curve. There are now even calls to start to reopen some parts of the economy that have been shut down to help slow the spread of the coronavirus.
Volatility could clearly remain, but the stock market is forward looking. This means that some investors might want to start to buy stocks, or at least add them to their watchlists because avoiding the market amid uncertainty can prevent you from catching some big rallies.
That said, let’s dive into three tech industry stocks trading under $10 a share that we screened for today. Stocks trading under $10 can be more volatile than their pricier peers, but investors can still scoop up solid returns with the right low-priced stocks…
Prior Close: $7.99 USD
Cloudera is an enterprise data cloud firm that completed its merger with big-data peer Hortonworks in January 2019. The firm’s new Cloudera Data Platform made its debut on Microsoft MSFT Azure Marketplace last fall, which should provide strong exposure. Then in January of this year, Rob Bearden took over as chief executive after previously co-founding and running Hortonworks.
CLDR topped our Q4 fiscal 2020 estimates in March, with the company’s annualized recurring revenue up 11% to $731.2 million. Bearden said on Cloudera’s Q4 earnings call that it “will transform from a mostly on-premise enterprise data management vendor to a true hybrid multi-cloud data platform company… CDP Public Cloud services will reflect our competitive advantage in addressing the full lifecycle of data.”
Cloudera’s consensus earnings estimates for fiscal 2021 and 2022 have soared since it reported. This helps CLDR earn a Zacks Rank #1 (Strong Buy) at the moment, alongside a “B” grade for Momentum in our Style Scores system. Our Zacks estimates call for CLDR’s revenue to jump 8% this year and another 9% in FY22 to reach $935.63 million.
Cloudera shares have failed to find their footing overall, but they have traded at nearly $12 a share in the last year. Therefore, some investors might want to take a chance on this “cheap” enterprise data cloud stock.
Limelight Networks, Inc. LLNW
Prior Close: $5.87 USD
Limelight provides digital content delivery, video, cloud security, and edge computing services. The Scottsdale, Arizona-based firm allows its customers to deliver streaming video and other digital content to “any device, anywhere.” This makes it highly attractive as people around the world are largely confined to their homes. The Wall Street Journal noted in early April that the manager of the Needham Small Cap Growth fund, Chris Retzler, which “posted the best stock-fund performance of the past 12 months,” is a Limelight fan.
Limelight, which services industries from media and broadcasting to gaming and more, has seen its stock price surge over 70% since March 16. LLNW shares have now jumped roughly 55% in 2020 and 105% in the past year, from under $3 a share to its current price. Plus, Limelight shares jumped over 6% again through morning trading Tuesday and might continue to climb amid the stay-at-home push.
Our current Zacks estimates call for LLNW’s fiscal 2020 revenue to climbed over 15% to reach $231.2 million, with sales set to jump another 8% higher next year. Meanwhile, Limelight is expected to jump from an adjusted loss of -$0.02 in 2019 to +$0.05 a share in FY20. Peeking ahead, its adjusted EPS figure is projected to soar another 115% higher to $0.11 per share in FY21.
Limelight is currently a Zacks #2 (Buy) that sports “A” grades for both Growth and Momentum in our Style Scores system. Plus, LLNW is trading at a slight discount compared to the S&P 500’s average in terms of forward 12-month Zacks sales estimates, which is rather impressive given its strong run.
Digital Turbine, Inc. APPS
Prior Close: $4.83 USD
Digital Turbine connects OEMs, mobile operators, and publishers with advertisers and app developers. The Austin, Texas-based firm has landed on Deloitte's Technology Fast 500 list multiple times and it completed on March 3 its acquisition of Mobile Posse. The company said that Mobile Posse’s “suite of highly-engaging content discovery products is a perfect complement to our core Digital Turbine platform offering.”
Looking ahead, Digital Turbine’s adjusted Q4 2020 earnings are projected to soar 67% on over 41% stronger revenue. Meanwhile, its full-year fiscal 2020 EPS figure is expected to surge 163%, while sales are set to jump over 33% to $137.8 million. APPS is then expected to see its adjusted 2021 EPS figure surge another 83% higher, on 61% stronger revenue,
Digital Turbine’s growth outlook, which reflects the expected Mobile Posse contribution, is strong. The firm’s earnings revisions have remained positive despite the current economic conditions, which helps it earn a Zacks Rank #1 (Strong Buy) at the moment. APPS is also part of highly-ranked Zacks industry and boasts an “A” grade for Growth.
Plus, Digital Turbine’s valuation picture is solid, trading at a significant discount against the S&P 500, its industry and its own recent history. Digital Turbine shares have fallen in 2020, but are still up 40% in the last 52 weeks and they have rallied recently as part of the broader market comeback.
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