The tech-heavy Nasdaq lost 340 points on October 4 due to a sell-off in large technology companies led by Facebook, Inc. (FB), which declined by more than 5%. Nevertheless, an anticipated stellar third-quarter earnings season could drive tech stocks higher.
Moreover, the demand for advanced technology-based products and services has increased dramatically amid the COVID-19 pandemic, and continues to rise thanks to the continuing digital transformation and remote work trend. According to a Forrester report, U.S. tech spending is expected to grow by 6% in 2021 and 6.8% in 2022. This bodes well for tech stocks.
So, we think it could be wise to bet on quality micro-cap tech stocks Computer Task Group, Incorporated (CTG – Get Rating), Issuer Direct Corporation (ISDR – Get Rating), and Socket Mobile, Inc. (SCKT – Get Rating). These companies are expected to generate significant returns in the coming months based on their promising product portfolios and continuing innovations.
CTG in Buffalo, N.Y., together with its subsidiaries, provides information and technology services in North America, South America, Western Europe, and India. It provides business process transformation solutions, which include strategic advisory and data strategy, among others. It has a market capitalization of $121.70 million.
On July 29, Filip Gydé, CTG President and CEO, said, “Our focus continues to be on driving CTG’s digital transformation offerings and increasing the overall mix of higher value solutions revenue. The success of these efforts, coupled with our strategic plan to disengage from lower-margin staffing revenue, resulted in improvements in both gross and operating margins in the second quarter.” Also, the company secured a significant new contract for go-live Epic implementation with a U.S. client.
CTG’s revenue increased 3.4% year-over-year to $92.16 million for its fiscal second quarter, ended July 2, 2021. The company’s gross profit came in at $20.38 million, representing an 8.8% year-over-year rise. Its net income increased 4.2% year-over-year to $1.83 million, and its EPS remained flat at $0.12.
For its fiscal year 2022, analysts expect CTG’s revenue to be $398.64 million, representing a 4.4% year-over-year rise. The company’s EPS is expected to increase 28.3% year-over-year to $0.68 in its fiscal year 2022. In addition, it surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained more than 68% in price.
CTG’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has an A grade for Value, and a B grade for Stability and Sentiment. Within the Technology – Services industry, it is ranked #3 of 74 stocks. Click here to see the additional POWR Ratings for Growth, Quality, and Momentum for CTG.
With a market capitalization of $97.60 million, ISDR in Raleigh, N.C., provides shareholder communications and compliance platforms, technologies, and services to public and private companies, law firms, brokerage firms, and investment banks. Its lead platform—Platform id—helps its customers…
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