All three major U.S. indexes ripped to new highs to start the week on the back of Pfizer’s PFE potentially game-changing Covid-19 vaccine announcement. This followed the big post-election climb as Wall Street seems happy enough with the prospects of divided government in Washington.
Analysts at Goldman Sachs GS and other major investment firms, such as JPMorgan Chase (NYSE:JPM) JPM have turned more bullish given the recent events. Goldman strategists now project that administration of at least one Covid-19 vaccine next year will help the S&P 500 jump 16% to 4,300, with more growth to come in 2022.
Clearly, there are still unknowns and more hurdles to climb and it might not be time to dive head-first into the travel and leisure space. That said, third quarter earnings results for the S&P 500 have come in stronger than expected and the earnings outlook for Q4 continues to improve. Better still, the overall earnings are projected to bounce back in a big way in fiscal 2021 (also read: Handicapping the Improving Earnings Picture).
On top of all of this, the low interest rate environment should help support the equities market. So now might be time for investors to consider buying stocks with solid growth potential that don’t necessarily need much of any vaccine help. Today, we explore three such tech stocks that also trade for under $10 per share that might be worth buying amid broader bullish vaccine sentiment in the market...
Prior Close: $7.10 USD
AXT is a manufacturer of compound semiconductor substrates. The company posted its strongest quarter of revenue growth in a few years in the third quarter, with sales up 28% to $25 million. “These results were driven by meaningful contribution from strategic applications such as 5G telecommunications, passive optical networks, and data center connectivity, where our indium phosphide substrates play an important role in enabling ongoing technological advancement,” CEO Morris Young said in prepared Q3 remarks at the end of October.
The stock has soared to new highs 52-week highs since then, including Wednesday’s 9% climb during regular trading, and it has easily topped our bottom-line estimates in the trailing four quarters. AXTI is now up 130% in the past 12 months to destroy its industry’s 30% average climb. This outperformance continued over the last three months, with AXT up over 40% vs. 6%. And even though it has easily topped its industry, it trades at a nearly 50% discount to its Electronic Semiconductor Market’s average in terms of forward 12-month sales.
Zacks estimates call for AXT’s Q4 revenue to jump 39% to help its adjusted earnings swing from a loss of -$0.05 per share in the year-ago period to +$0.03. Its FY20 EPS figure is also projected to climb from -$0.07 to +$0.06 on 13% higher revenue. The semiconductor’s firm’s FY21 sales are then expected to jump over 15% higher to help its earnings soar by 214%. These estimates mark a strong and stable return to growth within the historically cyclical industry after AXT’s sales fell in FY19.
AXTI still has nearly 30% more room to run before it would hit its 2017 highs. And the company’s earnings revisions activity help it grab a Zacks Rank #2 (Buy) right now. AXT also holds an “A” grade for Growth in our Style Score system and it is part of an industry that rests in the top 25% of our over 250 Zacks industries.
Prior Close: $8.12 USD
Glu is a mobile video gaming company with a portfolio that features Deer Hunter, Kim Kardashian: Hollywood, MLB Tap Sports Baseball, Disney Sorcerer’s Arena DIS, and more. The firm is ready to expand within the global gaming industry that is projected to climb from $159 billion in 2020 and over $200 billion by 2023. Better still, mobile gaming is projected to contribute the most in terms of growth and total sales. And people are simply addicted to their phones.
The company topped our Q3 estimates last week by roughly 60% and posted record revenue of $158.5 million. Glu’s top-line soared 48% and its bookings grew 22%. Zacks estimates call for its fiscal 2020 sales to climb 30% to $551.8 million, with another 9% expansion projected in FY21. The mobile gaming firm’s adjusted earnings are expected to soar 112% this year and another 20% next year.
Glu’s solid post-release earnings revisions help it grab a Zacks Rank #2 (Buy) right now. Glu’s Toys-Games–Hobbies industry is in the top 12% of our over 250 Zacks industries and it earns an “A” grade for Growth. Glu shares have climbed 40% in the last year to top its peer group that includes Electronic Arts EA, Take-Two (NASDAQ:TTWO) Interactive TTWO, and others. And the stock hovers about 30% below its spring 2019 highs.
iClick Interactive Asia Group Limited ICLK
Prior Close: $7.38 USD
IClick Interactive provides online marketing and enterprise data solutions. The company works with global brands to help provide exposure in the expanding Chinese market, where it claims it’s able to reach “98% of China Internet users.” The firm, which boasts that it connects “marketers worldwide to the right audience in China and beyond,” was founded in 2009 in Hong Kong and was listed on the Nasdaq in late 2017.
ICLK has beat our EPS estimates in the trailing two periods, with sales up 25% in Q1 and 18% in Q2. The company’s adjusted Q3 earnings, which its set to report on November 24, are expected to climb from a loss of -$0.02 to break even on 26% higher revenue. Peeking further ahead, the online marketing and enterprise data solutions firm is expected to swing from an adjusted loss of -$0.04 a share last year to +$0.03 in FY20 and then climb to +$0.09 in FY21. The company’s sales are projected to climb by 27% and 21%, respectively over this stretch.
Shares of ICLK have soared 130% in 2020 and they jumped over 4% on Wednesday. Despite its overall strength this year, the stock has cooled off recently and iClick comes in 20% below its early September highs. This could give it plenty of room to pop. ICLK sports a Zacks Rank #3 (Hold) at the moment, alongside “B” grades for Growth and Momentum in our Style Scores system. And all four brokerage recommendations that Zacks has accumulated for the stock come in at a “Strong Buy.”
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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JPMorgan Chase Co. (JPM): Free Stock Analysis Report
The Goldman Sachs Group, Inc. (NYSE:GS): Free Stock Analysis Report
Pfizer Inc. (NYSE:PFE): Free Stock Analysis Report
TakeTwo Interactive Software, Inc. (TTWO): Free Stock Analysis Report
The Walt Disney Company (NYSE:DIS): Free Stock Analysis Report
Electronic Arts Inc. (NASDAQ:EA): Free Stock Analysis Report
AXT Inc (AXTI): Free Stock Analysis Report
Glu Mobile Inc. (GLUU): Free Stock Analysis Report
iClick Interactive Asia Group Ltd. (ICLK): Free Stock Analysis Report
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