3 Tech Stocks to Buy on the Dip

Thanks to continued digital transformation and increased technology reliance, the technology sector could quickly recover from the recent selloff caused by rising interest rates and recession fears. So we think buying dips in quality tech stocks Juniper Networks (JNPR), AudioCodes (AUDC), and Extreme Networks (EXTR) could be rewarding. Continue reading….

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Tech stocks have done poorly this year because of the The Fed’s aggressive interest rate hikes to tame the high inflation of several decades. The tech-heavy Nasdaq Composite is down 21% year to date.

While the macro environment is expected to remain challenging in the coming months and hurt the sector’s finances, significant declines in technology stock prices offer attractive buying opportunities for long-term investors. Also, many analysts expect bearish sentiment to ease in the second half of the year, thanks to better-than-expected corporate earnings.

Ongoing digital transformation and increasing use of cloud computing, artificial intelligence (AI), virtual reality (VR) and the Internet of Things (IoT) are expected to continue to drive growth over the long term term of the sector. The global information technology market It is expected to reach $13.81 trillion by 2026, growing at a CAGR of 10.3%.

Therefore, we believe investors should buy the dip in quality technology stocks Juniper Networks, Inc. (JNPR), AudioCodes Ltd. (AUDC) and Extreme Networks, Inc. (EXT).

Juniper Networks, Inc. (JNPR)

JNPR is a marketer of cloud security and networking solutions, artificial intelligence (AI) and the 5G era. It provides high-performance networking products and services that enable customers to build scalable, reliable, secure and cost-effective networks for their businesses while achieving agility and improved operational efficiency through automation.

On 31 July 2022, the company announced that Frasers Property Australia had chosen JNPR to upgrade its network infrastructure, improve business agility and IT efficiency for simplified connectivity and enhance the customer experience. ‘end user in various operations throughout the country. This reflects the growing demand for JNPR’s services and the company’s wide market reach.

JNPR’s net income for the fiscal second quarter ended June 30, 2022, increased 8.3% year-over-year to $1.27 billion. That of the company operating income grew 25.8% year-over-year to $107.80 million. Its non-GAAP net income rose 34.2% year over year to $136.40 million. Additionally, non-GAAP EPS increased 35.4% year-over-year to $0.42.

For the third quarter ending September 30, 2022, analysts expect JNPR’s EPS and revenue to rise 9% and 13.7% year-over-year to $0.50 billion and $1.35 billion, respectively. It beat EPS estimates in each of the four subsequent quarters.

Shares are down 22.4% year to date to close the last trading session at $27.71. It is currently trading 27.3% below its 52-week high of $38.14, which was reached on March 31, 2022.

JNPR’s POWR ratings they reflect solid perspectives. Based on our proprietary rating system, it has an overall rating of B, which translates to a buy. The POWR ratings evaluate stocks by 118 different factors, each with its own weighting.

It has a B grade for value and quality. It ranks number 11 out of 54 actions of the Technology – Communication/Networks industry Click here to see JNPR’s other ratings for growth, momentum, stability and sentiment.

AudioCodes Ltd. (AUDC)

Headquartered in Lod, Israel, AUDC is a leading provider of advanced voice networking and media processing solutions for the digital workplace. It provides solutions, products and services for unified communications, contact centers, VoiceAI lines of business and service provider companies.

On April 25, 2022, the company announced that it had been approved as a partner in Microsoft’s Operator Connect Accelerator. “AudioCodes Live Cloud is the ideal SaaS solution to help service providers accelerate the onboarding and operations of Operator Connect customers, all on a per-user, per-month plan,” said Lior Aldema, AudioCodes Chief Commercial Officer.

He added: “Service providers can take full advantage of AudioCodes’ field-proven voice expertise to simplify Microsoft Teams voice connectivity, as well as offer Microsoft-certified business phones and meeting room devices such as service”.

AUDC’s total revenue rose 12.8% year-over-year to $68.36 million in the second quarter ended June 30, 2022. The company’s gross profit grew 5.8% year-over-year to to $44.51 million.

Analysts expect AUDC’s revenue for the fiscal third quarter (ending September 2022) to rise 10.8% to $70.29 million. Its FY2023 EPS is expected to rise 22% year-over-year to $1.70. It beat EPS estimates in three of the trailing four quarters.

Over the past nine months, the stock has lost 36.9% to close the last trading session at $22.34. It is currently trading 40.2% below its 52-week high of $37.35, which was reached on November 17, 2021.

AUDC’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of A, which translates to a strong buy in our proprietary rating system.

It has an A for Quality and a B for Stability. It ranks first in the Technology – Communication/Networks industry. Click here to see AUDC’s other ratings for Growth, Value, Momentum and Sentiment.

Extreme Networks, Inc. (EXT)

EXTR is a provider of software-based networking solutions. It provides wireless network infrastructure equipment and develops software for network management, policy, analytics, security and access control.

On June 7, 2022, the company unveiled a suite of new solutions: AIOps and SD-WAN for smarter, more flexible and more secure networks. The new solutions with dual digital capabilities enhance ExtremeCloud’s portfolio and are expected to witness high demand among organizations.

In fiscal 2022 (ending June 30, 2022), EXTR’s revenue increased 10.2% year-over-year to $1.11 billion. Its non-GAAP net income rose 43.2% year over year to $103.50 million. The company’s non-GAAP net income per share was $0.77, representing an increase of 35% year-over-year.

Analysts expect EXTR’s Q2 (ending December 2022) EPS and revenue to rise 9.5% and 7.1% year-over-year to $0.23 and $300.84 million , respectively. The company beat consensus EPS estimates in three of the trailing four quarters.

Shares are up 46% over the past month. However, it is down 16.7% year to date to close the last trading session at $13.07. It is currently trading 21.3% below its 52-week high of $16.61, which was reached on December 30, 2021.

The stock has an overall rating of A, which equates to a strong buy in our POWR rating system. EXTR is rated B for Growth, Value and Quality. Again, in the same industry, the stock ranks second. Click here to see more EXTR component grades.

Shares of JNPR were flat in pre-market trading on Wednesday. Year-to-date, JNPR has declined -21.40%, versus a -13.45% increase in the benchmark S&P 500 over the same period.

About the Author: Shweta Kumari

Shweta’s deep interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. He uses his knowledge to help retail investors make educated investment decisions.


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