Tech stocks took a hit during the market slump in May. But that kind of volatility is fertile ground for investors seeking solid long-term buying opportunities.
With that in mind, we asked Motley Fool contributors for a few tech stocks that are attractive here as investors look ahead in June. Read on to find out why Veeva Systems (NYSE:VEEV), Garmin (NASDAQ:GRMN), and Tencent (NASDAQOTH:TCEHY) topped that list.
A market leader in a high-growth niche
Leo Sun (Veeva Systems): High-growth cloud stocks have been largely immune to the trade war and tariffs. Within that massive market, niche players like Veeva Systems — which have first mover’s advantages and wide moats — are leaving bigger players in the dust.
Veeva offers cloud services to over 750 life science companies, including pharmaceutical giants like GSK and Novartis. Its platform allows those companies to manage customer relationships and track industry regulations, clinical trials, prescribing habits, and other data in real time.
The company constantly expands that ecosystem with fresh features like the Veeva Nitro data warehouse; employee training tools for Veeva Vault; and Veeva Andi, an artificial intelligence application that crunches and analyzes its customer relationship management (CRM) data.
Intense competition among drugmakers is boosting demand for Veeva’s services, and that momentum won’t fade anytime soon. Last year, Veeva’s revenue rose 25%, its adjusted operating income grew 40%, and its adjusted EPS surged 70%.
Its recent first-quarter report showcased that strength with 25% sales growth, 49% growth in adjusted operating income, and a 52% jump in its adjusted EPS. The gross margins of Veeva’s subscriptions (which accounted for 81% of its sales) and professional services expanded — indicating that it still enjoys plenty of pricing power.
Veeva expects its fiscal 2020 revenue to rise 21% to 22% this year, while analysts expect its adjusted earnings to rise 18%. Veeva isn’t cheap at about 70 times forward earnings, but its dominance of a high-growth niche market arguably justifies that premium. Investors might want to wait for a pullback before starting a position in the stock, but it’s still a solid long-term play that is well insulated from trade war headwinds.
A consumer tech specialist with an impressive growth record
Demitri Kalogeropoulos (Garmin): Navigation device giant Garmin has quietly assembled…
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