An unprecedented tech-sector rally since the stock market’s COVID-19-driven correction in March 2020 has stretched the valuations of most technology stocks. Many of these stocks are currently trading at near all-time highs and experts are comparing the current tech-stock rally to the dot-com bubble in 2000.
While the technology sector is expected to continue thriving even after COVID-19 is vanquished, it could be risky for investors to take positions in the top-performing tech stocks now considering their lofty valuations. Also, investors’ rotation away from pricey tech stocks to quality turnaround candidates in beaten-down sectors that may advance with an economic recovery, might drive a tech sell-off in the coming months. So, we think a prudent way to ride the continuing technology wave is to bet on relatively undervalued stocks in the sector.
Teradata Corporation (TDC – Get Rating), Verint Systems, Inc (VRNT – Get Rating), NetScout Systems, Inc. (NTCT – Get Rating), and NETGEAR, Inc. (NTGR – Get Rating) are examples of technology names that are seeing increasing demand for their innovative offerings but their stocks are trading at lower valuations than their peers.
TDC delivers marketing and analytics applications, data analytics platforms, and related services. The company has operations in the U.S. and internationally. TDC’s stock has gained 100.6% over the past year; its last closing price was $46.8.
TDC recently began offering a 30-day free trial with its Modern Cloud Data Analytics platform, which could help market the product to more enterprises. Its Vantage Now product is now available on the Google Cloud marketplace, which could lend it greater accessibility and visibility for the product.
In terms of its forward price/sales, TDC is trading at 3.11x, which is 27.9% lower than the industry average of 4.32x. TDC is expected to see revenue growth of 3.6% for the quarter ended March 31, 2021 and 2.7% in 2021. Its EPS is estimated to grow 18.3% in 2021 and at a rate of 19% per annum over the next five years.
TDC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, 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.
TDC also has a Value rating of A and Momentum and Quality ratings of B. In the A-rated, 5-stock Technology – Storage industry, it is ranked #1.
In total, we rate TDC on eight different levels. Beyond what we stated above, we have also given TDC grades for Stability, Sentiment, and Growth. Get all the TDC ratings here.
VRNT delivers actionable intelligence solutions and value-added services. The company has worldwide operations. VRNT’s stock has returned 72.3% over the past year and was last trading at $50.8.
VRNT recently partnered with…
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