3 Under-the-Radar Tech Stocks Ready to Break Out
Technology stocks have staged a comeback for the ages. After being the worst performing asset class in 2022 during what became known as the “tech wreck,” shares of technology stocks have rallied big time this year, fueled in large part by the hype surrounding artificial intelligence (AI). Consider that, in 2022, the tech-laden Nasdaq index fell 33%, but this year it has gained 36% in a little more than six months.
While many of the biggest tech names have experienced extraordinary year-to-date increases in their share prices, doubling and, in some cases, tripling, there are many smaller tech names that are just beginning to recover from a downturn and start to breakout. While it might be too late for investors to buy the mega-cap tech stocks whose share price has risen more than 100% since January, there is still lots of opportunity to buy tech stocks on the cheap and ride them higher in coming months. Here are three under-the-radar tech stocks ready to breakout.
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EPAM Systems (EPAM)
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Software engineering company EPAM Systems (NYSE:EPAM) gets little attention. However, the company’s stock has proven to be a long-term winner and investors can buy it now on the cheap as it begins to recover from a sharp downturn over the past year. The broad rotation out of tech stocks, coupled with Russia’s invasion of Ukraine, sent EPAM stock down 72% from a peak of $705 reached in November 2021 to a 52-week low of $198. EPAM had a large workforce presence in Ukraine when Russia’s military invaded.
However, EPAM stock has started to recover, now trading 22% higher than its 52-week low. Since mid-June, the company’s share price has gained 10%. Many analysts remain bullish on this information technology service provider, and also see the company as a beneficiary of AI. Analysts point out that EPAM Systems has largely removed its workforce from the conflict zone in Ukraine and point to the company’s strong balance sheet that includes $1.7 billion in net cash and forecasts for 20% annual growth.
EPAM is also buying back $500 million of its own stock. This is definitely an under-the-radar tech stock that is just starting to breakout.
Docebo (DCBO)
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Docebo (NASDAQ:DCBO) is a software as a service company that specializes in educational courses and training programs. It is another lesser known technology stock that got badly bruised during the 2022 tech wreck. Peak to trough, DCBO stock fell 74%. However, the share price is now in recovery mode, having climbed 65% above its 52-week low. The long-term performance of the stock is even more impressive, having gained 280% over the last five years.
With a market capitalization of less than $2 billion, Docebo is firmly entrenched in the small cap stock category. The company’s most recent earnings were impressive. For this year’s first quarter, Docebo reported 29% year-over-year growth in its revenues to $41.5 million, and swung to a net profit of $1.2 million compared to net loss of $7 million a year earlier. Things are looking up.
Turtle Beach (HEAR)
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Turtle Beach (NASDAQ:HEAR) is an under-the-radar tech stock that makes video game accessories, namely the popular headsets that gamers use to communicate with one another when playing online. With a market cap of less than $200 million and annual revenues of about $250 million, Turtle Beach is a small company and stock. However, its share price is rebounding after getting knocked lower between late 2021 and the autumn of 2022.
Year-to-date, HEAR stock has increased 53%. However, even with that big gain, the stock remains 31% below its 52-week high, and it is trading 230% below its all-time high reached in June 2021 when sales of video games and their accessories were thriving during pandemic lockdowns. There is still plenty of runway ahead for Turtle Beach stock. The company remains unprofitable, but its earnings have been improving and most recently beat Wall Street expectations. Turtle Beach is a high potential growth stock that’s worth a look.
On the date of publication, Joel Baglole 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.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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