The U.S. economy is girding for a recovery from COVID-19 lows on the back of an ongoing mass vaccination program, a recent federal recovery package and a low interest rate environment. And stocks that have fared well over the past year thanks to the pandemic are now experiencing a correction as investors rotate to turnaround outdoor stocks…
This action is being driven primarily by a rotation away from pricey tech stocks to undervalued non-tech stocks. This is evident from the tech-heavy Nasdaq Composite’s 4.2% decline over the past month compared to 0.9% and 4.8% gains of S&P 500 and Dow Jones Industrial Average, respectively.
However, as pandemic-driven trends are expected to continue given certain benefits therein, the current price dip in some Nasdaq stocks could be a solid buying opportunity for investors. Continued innovations by these companies and an increasing demand for their offerings should help these stocks deliver significant returns in the long run.
Adobe, Inc. (ADBE – Get Rating), Workday, Inc. (WDAY – Get Rating), Autodesk, Inc. (ADSK – Get Rating), and Telefon AB L.M. Ericsson ADR (ERIC – Get Rating) are four stocks that have lost some value lately and now offer investors attractive entry points.
Adobe, Inc. (ADBE – Get Rating)
Adobe is involved in developing t and marketing a range of software products, including Photoshop, Lightroom, and Acrobat. The company has global operations. ADBE has gained 33.4% over the past year to close yesterday’s trading session at $447.59. However, the stock is down 10.3% over the past month.
ADBE has acquired Workfront, which is a market leading platform in work management. ADBE has also entered a partnership with Microsoft and c3.ai to develop CRM tools using artificial intelligence (AI).
For the quarter ended November 27, 2020, ADBE reported a 14% year-over-year rise in revenue. The company also reported a 20% gain in its Digital Media segment revenue during that period.
ADBE is expected to see revenue growth of 21.6% for the quarter ended February 28, and 18.2% in 2021. Its EPS is estimated to grow 11.5% in 2021 and at a rate of 16.7% per annum over the next five years.
ADBE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
ADBE has an A grade for Quality and B for both Sentiment and Stability. In the Software – Application industry, it is ranked #21 of 114 stocks.
In total, we rate ADBE on eight different levels. Beyond what we’ve stated above we have also given ADBE grades for Momentum, Value, and Growth. Get all the ADBE ratings here.
Click here to check out our Software Industry Report for 2021
Workday, Inc. (WDAY – Get Rating)
WDAY is involved in developing and marketing cloud-based applications for finance and human resource management. The company has worldwide operations. MSFT has returned 85% over the past year but declined 9.4% over the past month to close Monday’s trading session at $254.88.
WDAY recently completed the acquisition of Peakon, which is a leading employee success platform. The company has also launched a COVID-19 management platform to help organizations protect their workforces.
For the quarter ended January 2021, the company’s revenue rose 15.9% versus the same period last year. Its subscription revenue grew 19.8% during the period.
WDAY’s revenue is estimated to increase 15.8% for the quarter ended April 30 and 15.6% in 2022. Its EPS is expected to…
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