3 overlooked bargains on tech stocks ready to take off

Searching for undervalued stocks isn’t easy, especially in the technology sector. There are hundreds of companies to choose from and many things to consider. Yet we find overlooked tech stocks could It’s worth it because companies in the industry often experience explosive growth.

But how do you pick winners without combing through all the tech stocks? It’s not always about hype and prospects; their fundamentals and past financial data should also reflect their potential. Additionally, taking a look at what analysts are saying about the stock is another good indicator.

So today let’s take a look at some overlooked tech stocks and discuss why they deserve your attention.

To get the list of stocks here, I screened the market with the following criteria:

• Small cap (between $300 million and $2 billion in market capitalization),
• At least a Buy rating from analysts,
• A minimum of 5 analysts covering the stock,
• Constant positive growth in turnover over three years,
• Latest increase in turnover for the whole year of at least 10%,
• Latest full-year EPS growth of at least 10%, and
• Trading at $5 and up.

I then sorted the list based on potential benefits (according to analysts); here are the first three:

Top Overlooked Tech Stocks: Pagaya Technologies (PGY)

Fintech is today one of the transformative industries. It gives consumers underserved by traditional banks access to financing, which is why companies like Pagaya Technologies (NASDA:PGY) continue to thrive.

Pagaya is an Israel-based software company specializing in data science and artificial intelligence that enables lenders to perform accurate credit assessments in real time. The company’s network allows its clients to easily identify which of their customers are potentially high risk and avoid unnecessary risks.

Pagaya recorded a record T1’24. Network volume reached a record high of $2.4 billion, beating company expectations, up 31% year-over-year. Likewise, total revenue and other income reached $245 million, an additional increase of 31%.

The company has recorded three consecutive years of impressive revenue growth and shows no signs of slowing down. Meanwhile, EPS fell from minus $8.22 in 2022 to minus $2.14 in 2023. Analysts share this optimism by rating the stock a Strong Buy. High target estimates for PGY reach $42, representing an impressive 247% upside potential, making it one of the most attractive overlooked tech stocks today.

Weaving Communications (WEAV)

Weaving communications (NYSE:WEAVING) is a healthcare-focused business phone systems provider that enables healthcare businesses to streamline their daily operations through various product offerings.

Its platform features include Weave Email Marketing, Web Assistant, and Weave Text Messaging. The company continually improves its services through integration with other tools, such as InfiniteVT for vision therapy and Shepherd, a cloud-based veterinary management software.

In FY23, Weave’s revenue grew 19.9% ​​year-over-year. Net cash flow from operating activities also reached $10.2 million – a significant improvement from last year’s negative $12.8 million. Even though the year ended in a loss, the company still saw a considerable improvement in its financial results, which resulted in a loss of $34.4 million, compared to the loss of $49. .7 million dollars last year.

This continued trend of improving revenue and profits shows that Weave is taking the right steps toward profitability. Analysts rate Weave a Strong Buy with over 98% upside potential, making it a potential bargain for investors looking for overlooked tech stocks.

ACM Research (ACMR)

The semiconductor industry is taking over the news, thanks in part to the massive demand for AI. This is why companies like ACM Research (NASDAQ:ACMR) continue to thrive.

ACM Research specializes in semiconductor processing equipment used in batch and single-wafer wet cleaning, polishing, and thermal processes, as well as electroplating, essential for advanced manufacturing of semiconductor processing devices. drivers.

The company recently introduced a new frame wafer tool for advanced packaging. The product aims to provide residue-free cleaning during the post-peel process with minimal environmental impact.

ACM Research’s metrics for fiscal 2023 were quite impressive. As President and CEO Dr. David Wang puts it, the company “grew revenue 43%, well above market growth for wafer fabrication equipment (WFE) spending in mainland China “. Gross margins improved to 49.5%, revenue reached $557.7 million, and EPS fell from 66 cents to $1.29.

The company fully expects this momentum to continue through FY24. Revenue guidance is between $650 million and $725 million. Additionally, analysts at major banks like Morgan Stanley and Goldman Sachs consider it a strong buy. The high price target for ACMR stock is $40, representing nearly 70% upside potential.

So if you’re looking for overlooked tech stocks, keep an eye on ACMR.

As of the date of publication, Rick Orford did not hold (either directly or indirectly) any positions in any securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.