Is there any corner of our lives that has not been impacted by the digital revolution of the 21st century? More and more, everything we do is growing dependent on the tech industry; high-tech systems have become ubiquitous.
Wedbush tech analyst Daniel Ives has recently released a report on the state of the tech sector, describing now as a ‘risk off moment,’ and ‘golden opportunity to own secular winners.’
“While front office collaboration software… will clearly see moderating growth into 2022, we are hearing a clear message from many CEOs we speak to around the world that 30%-40% of employees could be remote in a semi-permanent structure, which will put further pressure on CIOs to rip the band-aid off and go aggressive on its cloud/digital transformation roadmap the next few years,” Ives noted.
In other words, the pandemic has accelerated the natural trends of the tech world.
Bearing this in mind, we used TipRanks’ database to pinpoint three tech stocks that the analysts believe could soar over 60% in the year ahead. Not to mention, all three boast a “Strong Buy” consensus rating.
We’ll start with distance learning. Docebo, whose name means ‘I will teach’ in Latin, is a cloud-based SaaS platform for a learning management system. The company offers services to business clients, seeking corporate e-learning solutions. Using Docebo, clients can load courses, create usernames and passwords, and track employee progress through the course. Docebo is available in over 40 languages and caters to mid-sized companies, although its service has been used by both larger and smaller corporations.
Docebo is a global company, that got its start in Italy. From an investor perspective, the company first got on the radar in 2019, when it went public on the Toronto stock exchange. In December 2020, DCBO started trading on the NASDAQ. In the New York IPO, shares were priced at $48 and the 3.9 million shares put on the market grossed $165.6 million for Docebo.
As can be imagined, Docebo had a good year in 2020. The company’s revenues increased in each quarter, with the most recent reported, Q3, showing $16.98 million. The Q4 report, scheduled later this week, is expected to show both sequential and year-over-year gains. Revenues are predicted between $18.25 million and $18.75 million – up 50% at the midpoint from the 4Q19 result. Strong gains in annual recurring revenue and average contract value are expected to drive the positive results.
Covering the stock for National Bank of Canada, 5-star analyst Richard Tse writes: “We continue to believe Docebo is a developing growth story in its early innings where we see a multi-year growth runway. We continue to like this name for the same reasons outlined in our previous research notes – most notably is its differentiated product offering led by technology and a highly efficient sales and marketing model that puts Docebo in a position to make meaningful market share gains. The following summarizes the main reasons why we continue to like this name."
In line with his bullish comments, Tse rates DCBO an Outperform (i.e. Buy), and sets a $70 price target that implies a 69% one-year upside potential. (To watch Tse’s track record, click here)
Like Tse, the rest of the Street has high hopes for DCBO. With 5 Buy ratings and 1 Hold received in the last three months, the message is clear: the e-learning stock is a "Strong Buy." At an average price target of $68.56, the potential twelve month gain lands at ~66%. (See DCBO stock analysis on TipRanks)
LiveRamp Holdings (RAMP)
Businesses have a multitude of technical needs. LiveRamp, based in San Francisco, like Docebo above, is a SaaS company – only LiveRamp’s services are centered around data, including data connectivity and infrastructure, data onboarding, and data transfer. LiveRamp’s platform allows for the safe and secure connections that allow data to be easily used for measurement and analytics.
In short, LiveRamp offers a service that has become indispensable in today’s business world. The company’s revenue, in the recent fiscal Q3 report, showed that; it was up 17% year-over-year to $120 million. A 15% gain in subscription revenue, which rose to $93 million, was a main driver of the total increase, as subscriptions make up 78% of the company’s total revenue. Like many high-techs, RAMP operates at a net loss, which in fiscal Q3 was 18 cents per share. On a positive note, the company finished the quarter – and calendar year 2020 – with $663 million in cash and cash equivalents, and no net debt.
LiveRamp has attracted attention from one of Wall Street’s top analysts. Jack Andrews, a 5-star analyst with Needham, reviewed the stock, writing: “The removal of cookies from Google Chrome is expected to create material headwinds as large marketing clouds unwind their licensed usage of RAMP's cookie-based identity graph in FY22…. Excluding the impact of platform relationships in FY22, RAMP's guidance implies that its core revenue growth is expected to grow ~20%.... We believe demand for omnichannel marketing is accelerating, and RAMP is a key enabler in allowing marketers to deliver advertisements across devices and channels.”
Andrews put an $88 price target on RAMP shares, indicating a potential for 80% upside in the next year. His rating on the stock is a solid Buy. (To watch Andrews’ track record, click here)
The analyst’s bullishness gets the backing of his colleagues, as the data platforms provider currently has a Strong Buy rating from the Street. The 6 Buys and 1 Hold ratings provide an average price target of $90.14, implying upside of 75% from RAMP’s current price of $51.47. (See RAMP stock analysis on TipRanks)
MTBC, Inc. (MTBC)
The last stock on our list here is a medical and healthcare IT specialist. By operating in both the healthcare and tech sectors, MTBC has its feet in two growth opportunities – tech and healthcare, each for its own reason, have seen gains due to effects of the pandemic year. MTBC offers products and solutions to physician practices, hospitals, and clinics for medical billing, practice management, and transcription, all vital support services in medical practices.
MTBC’s final quarterly report for 2020, and the full year results, showed record gains. The Q4 revenues hit $32 million, doubling the 4Q19’s number. For the full year, the top line grew 63% year-over-year to reach $105.1 million. EPS came in at a loss, and the 27-cent EPS deficit reported was worse than 4Q19, the company’s net loss showed a moderating trend through 2020.
In coverage of MTBC for B. Riley Securities, Marc Wiesenberger, another of the Street’s 5-star analysts, wrote, “[We] believe MTBC’s expanded platform offerings are not only resonating with existing customers, but also helping the company’s beefed-up sales and marketing team drive organic growth, which we model at high-single-digits in FY21. Beyond above-industry growth, we expect notable margin expansion in FY21, driven by increased scale and continued cost rationalizations… We believe both organic and inorganic opportunities are lining up to present a compelling opportunity, and with shares trading at just 10x FY21 EV/EBITDA, we continue to believe that MTBC remains undervalued…”
Wiesenberger rates MTBC as a Buy with a $20 price target that suggests a robust 119% one-year upside. (To watch Wiesenberger’s track record, click here)
The healthcare IT company is without question a Wall Street favorite, MTBC’s Strong Buy consensus rating is based on 5 Buys, with no Holds or Sells. With a return potential of ~83%, the stock's consensus target price stands at $16.70. (See MTBC stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.