Persistent geopolitical uncertainties and the Fed’s aggressive interest hikes have led to massive tech sell-off lately. However, continued digitization and increasing dependence on…
technology solutions should drive growth for the tech sector. In addition, strong corporate earnings and increasing investments in tech upgrades should help revive investors’ sentiment about the technology sector.
According to data from Bain & Company, “born tech” companies have contributed to 52% of total market value growth since 2015, whereas 20% of market value growth has come from companies with a tech-led strategy. According to IDC, the technology industry is on pace to exceed $5.3 trillion in 2022.
That’s why today we’re highlighting 3 exciting stocks from our Top 10 Small-Cap screen, which is just 1 of the 10 screens in our POWR Screens 10 service (more on that below). PCTEL, Inc. (PCTI), Photronics, Inc. (PLAB), and Xperi Holding Corporation (XPER) are quality small-cap tech stocks that deserve a place in investors’ portfolios.
PCTEL, Inc. (PCTI)
Headquartered in Bloomingdale, Illinois, PCTI and its subsidiaries offer industrial Internet of Thing devices (IoT), antenna systems, and test and measurement solutions worldwide. The company designs and manufactures precision antennas and industrial IoT devices that are deployed in small cells, enterprise Wi-Fi access points, fleet management, transit systems, and equipment and devices for the industrial IoT. It has a market capitalization of $79.05 million.
PCTI’s revenue increased 27.3% year-over-year to $22.54 million for the first quarter ending March 31, 2022. Its Non-GAAP operating income grew 200.9% from its year-ago value to $319.00 million, while its Non-GAAP net income improved 128.6% from its prior-year quarter to $304.00 million. The company’s EPS grew 100% year-over-year to $0.02.
In April, PCTI announced a strategic partnership with Stargent IoT, an Internet of Things (IoT) company providing IoT solutions for an array of use cases for smart manufacturing, process automation, and asset tracking. This alliance will enable end-to-end remote monitoring solutions to monitor various conditions, including detection of air quality, temperature, relative humidity, acceleration, angular rate of change, magnetic field, range, and sound.
Analysts expect PCTI’s revenue to increase 13% year-over-year to $24.50 million in the second quarter (ending June 2022). The company’s EPS is expected to grow 63% year-over-year to $0.44 for fiscal 2022. In addition, it has an impressive earnings history, as it surpassed the consensus EPS estimate in three of the trailing four quarters.
PCTI’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
PCTI is also rated an A grade for Sentiment and Value. Within the B-rated Technology – Communication/Networking industry, it is ranked #6 of 55 stocks.
To see additional POWR Ratings for Stability, Momentum, Quality, and Growth for PCTI, click here.
Photronics, Inc. (PLAB)
With a market capitalization of $1.39 billion, PLAB and its subsidiaries engage in the manufacture and sale of photomask products and services internationally. The company provides photomasks that are used to manufacture integrated circuits and flat panel displays (FPDs) and to transfer circuit patterns onto semiconductor wafers, FDP substrates, and other electrical and optical components.
PLAB’s revenue increased 28% year-over-year to $204.51 million for the second quarter ending May 1, 2022. Its operating income grew 150.4% from its year-ago value to $52.11 million, while its net income attributable to PLAB improved 183.5% from its prior-year quarter to $29.84 million. The company’s EPS rose 188.2% year-over-year to $0.49.
Analysts expect PLAB’s revenue to increase 20.4% year-over-year to $192.37 million for the second quarter ending April 2022. The consensus EPS estimate of $0.35 during the same period indicates a 105.9% improvement year-over-year. In addition, it has an impressive earnings surprise history, as it surpassed…
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