3 Underappreciated Tech Stocks That Deserve Some Investor Love
Thanks to the emergence of generative artificial intelligence, innovative public enterprises have soared over the past year but not all have benefited, which brings us to underappreciated tech stocks. Yes, they do exist.
Fundamentally, it comes down to a numbers game. With thousands of publicly traded securities available, investors have no shortage of possible opportunities. What’s more, the innovation space is filled with fresh upstarts claiming to forward the next big thing. It’s difficult for genuinely compelling entities to grab a piece of the spotlight.
Still, a little digging reveals some analyst-backed ideas to consider. If you can withstand volatility risk, these are the underappreciated tech stocks to put on your watch list.
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Gitlab (GTLB)
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A software specialist, Gitlab (NASDAQ:GTLB) focuses on programs for software development cycles in the U.S., Europe and the Asia Pacific market. Per its public profile, the company offers its namesake DevOps platform, which is a single application that leads to faster cycle time and allows visibility throughout and control over various stages of the DevOps lifecycle.
Over the past 52 weeks, GTLB stock gained over 53% of equity value. However, since the beginning of January, it slipped more than 7%. That makes it one of the underappreciated tech stocks presently. Still, it may be a mistake to ignore Gitlab.
For example, the company has consistently exceeded expectations regarding the bottom line. In the most recent fourth quarter, it posted earnings per share of 15 cents against an expected target of 8 cents. For the current fiscal year, experts anticipate EPS of 22 cents atop revenue of $731.94 million. Last year, Gitlab posted EPS of 20 cents on sales of $579.91 million.
Lastly, analysts rate GTLB a consensus strong buy with a $73.40 price target, implying 32% upside potential.
Vipshop (VIPS)
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Based in China, Vipshop (NYSE:VIPS) operates e-commerce platforms. According to its corporate profile, the company offers apparel for both men and women, along with sportswear, shoes, bags, fashion accessories and skincare and cosmetics. It also provides a variety of lifestyle products along with items commonly found in supermarkets. If that wasn’t enough business diversification, Vipshop also provides financing services.
Over the past 52 weeks, VIPS stock gained almost 17%. However, it’s off to a slow start this year, down more than 1%. Again, that makes VIPS one of the more underappreciated tech stocks. Still, investors could be passing up a bargain. Currently, Vipshop shares trade at only 8.06X forward earnings. And it trades at a modest 0.61X trailing-year sales.
Notably, the company beat EPS expectations in all four quarters last fiscal year. The average positive earnings surprise came out to 24.8%. For the current fiscal year, experts believe that Vipshop can generate EPS of $2.54 on sales of $16.75 billion. Last year, it posted per-share profits of $2.38 on revenue of $15.87 billion.
Conspicuously, analysts peg VIPS a unanimous strong buy with a $24.50 price target, implying 43% growth potential.
MoneyLion (ML)
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A financial technology (fintech) company, MoneyLion (NYSE:ML) provides personalized products and financial content for American consumers. Per its public profile, the underlying platform offers access to banking, borrowing, and investing solutions for customers. Its principal products include RoarMoney, an insured digital demand deposit account, and Instacash, a cash advance product.
It’s been on the move, gaining almost 300% in the past year. However, the company is off to a slow start in 2024, gaining 2% since the January opener. As a result, ML is currently one of the underappreciated tech stocks in the sense that few apparently believe it can produce a robust return this year. Still, MoneyLion is worth keeping tabs on.
Financially, it has done well to mitigate expected losses per share. In Q4, the company posted a loss of 33 cents, far better than the anticipated red ink of 43 cents. For the current fiscal year, experts believe EPS will land at 71 cents on revenue of $522.11 million. In fiscal 2023, MoneyLion incurred a per-share loss of $4.63 on sales of $423.43 million.
Finally, covering analysts rate ML a unanimous strong buy with a $95.50 price target, projecting 50% upside potential.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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