The technology industry is expected to see sustained growth this year driven by transformative trends that drive innovation and shape the future. Additionally, the momentum in the technology industry is undeniable, with the Technology Select Sector SPDR Fund (XLK) boasting an impressive 50.2% return over the past year, outpacing the 21.4% gain of the broader S&P 500 index.
Here are some solid tech stocks that are gaining investor interest in 2024: Fujitsu Limited (FJTSY), Teledyne Technologies Incorporated (TDY), and Lantronics (LTRX).
In a dynamic technology scenario, generative AI will gain prominence in 2023 and redefine our daily lives in 2024. Additionally, this year promises to be a transformative year for quantum computing as theoretical buzz translates into tangible benefits. Revenue for the IT services market is expected to reach $495.3 billion this year.
The ever-evolving technology industry also requires cutting-edge hardware to run advanced applications as software evolves seamlessly. Increased digitalization investments across sectors are driving demand for hardware such as servers and data centers. Additionally, the increasing use of technology in medicine, automotive, and industry has increased the demand for high-quality hardware components. The global hardware market is expected to reach $164.21 billion by 2027, growing at a CAGR of 7.9%.
Furthermore, a key trend in the electronics sector this year is the synergy between AI and the Metaverse, ushering in innovative virtual applications. Moreover, the electronic devices market has recently experienced significant growth due to the prevalence of hybrid work and increasing lifestyle convenience. The electronic market is expected to reach $122.7 billion this year. It is expected to further grow at a CAGR of 4% to reach $143.79 billion by 2028.
With these positive trends in mind, let’s dig into the fundamentals of three tech stocks.
Fujitsu Limited (FJTSY)
FJTSY is an information and communications technology company headquartered in Tokyo with operations in Japan and overseas. The company operates through his three segments. ubiquitous solutions; and device solutions.
FJTSY’s net profit margin for the trailing twelve months was 4.87%, which was 106.3% higher than the industry average of 2.36%. His EBIT margin for the company’s trailing twelve months was 5.97%, which is 20.8% higher than his industry average of 4.94%.
On December 21, 2023, FJTSY announced that it is actively working to restart stalled negotiations for a $730 million stake sale in its air conditioning business. The successful completion of this transaction is of critical importance to FJTSY not only for financial reasons, but also as a strategic move to facilitate expansion into the emerging and lucrative AI services market.
In September, FJTSY and the Linux Foundation officially launched the former company’s automated machine learning and AI fairing technology as open source software (OSS). The project, named “SapientML” and “Interection Fairness,” aims to provide users with tools to generate code for new machine learning models and address bias in training data. This move is expected to contribute to the advancement and spread of AI.
The annual dividend is $0.35 and the current market price yield is 1.22%.
FJTSY’s revenue increased slightly year-on-year to 1.71 trillion yen ($11.78 billion) for the six months ended September 30, 2023. Operating income was 44.78 billion yen ($308.37 million). The company’s net income and EPS were 43.94 billion yen ($302.59 million), or 200.44 yen.
FJTSY’s sales are expected to increase 94% year-on-year to $26.14 billion in the fiscal year ending March 2024.
Shares have soared 12.4% over the past six months, closing at $28.61.
FJTSY’s POWR Rating reflects this promising outlook. The stock has an overall rating of B, which equates to a Buy according to our proprietary rating system. POWR ratings are calculated by considering 118 different factors, each of which is optimally weighted.
The value is B grade. It ranks #17 out of 76 stocks within the Technology Services industry.
Click here to access FJTSY’s growth, momentum, stability, sentiment and quality ratings.
Teledyne Technologies Incorporated (TDY)
TDY and its subsidiaries provide enabling technologies for international industrial growth markets. The company operates in his four main segments: digital image processing; aerospace and defense electronics; and engineering systems.
TDY’s trailing twelve month net profit margin of 14.02% was 494.4% higher than the industry average of 2.36%. His EBIT margin for the company’s trailing twelve months was 18.74%, which is 279% higher than the industry average of 4.94%.
On November 30, Teledyne DALSA, a TDY company, launched the AxCIS™ line scan imaging module, which integrates sensors, lenses, and lights for cost-effective machine vision. Featuring TDY’s multi-line CMOS image sensor, AxCIS provides high-resolution imaging at line rates up to 120 kHz. Its unique design covers the entire field of view without missing a pixel, delivering seamless images at 900 dpi resolution.
On October 3, TDY announced an acquisition agreement with Xena Networks, a prominent provider of Terabit Ethernet verification and test solutions. The move is aimed at strengthening TDY LeCroy’s protocol testing portfolio by incorporating high-speed traffic generation and network emulation capabilities.
TDY’s net sales for the third quarter of its fiscal year ended October 1, 2023 were $1.4 billion, an increase of 2.9% from the same period last year. The company’s operating income increased 7.8% year-on-year to $264.3 million. Non-GAAP net income attributable to TDY increased 11.7% year over year to $241.9 million. Additionally, non-GAAP earnings per common share increased 11.2% year over year to $5.05.
For the fiscal first quarter ending March 2024, TDY’s revenue is expected to increase 2.8% year over year to $1.42 billion. EPS for the quarter is expected to be $3.95, up 6% year over year. It’s worth noting that he beat consensus EPS estimates in each of his subsequent four quarters.
Shares rose 7.1% over the past month, closing at $440.83.
TDY’s healthy outlook is reflected in its POWR rating. The stock has an overall rating of B, which equates to a Buy according to our proprietary rating system.
Rating B for Stability and Sentiment. B-rated Technology – Ranked #10 out of 41 stocks in the Electronics industry.
Click here to see TDY’s growth, value, momentum, and quality assessment.
Lantronix Co., Ltd. (LTRX)
LTRX provides video surveillance, infotainment systems, and intelligent substation infrastructure solutions in the Americas, Europe, the Middle East, Africa, and Asia Pacific.
LTRX’s trailing twelve month asset turnover of 0.88x is 41.2% higher than the industry average of 0.62x, and its trailing twelve month leveraged FCF margin of 10.53% is 29.7% higher than the industry average of 8.12%.
On January 3, LTRX and P3 Digital Services3 partnered to pre-integrate LTRX’s embedded in-vehicle infotainment platform with P3’s flagship IVI software, SPARQ OS. This partnership will provide automakers with faster time to market, reduced technology risk, and significant engineering and management time savings.
On October 25, LTRX expanded its embedded product line to meet the changing needs of the automotive sector. LTRX leverages Qualcomm Technologies Inc.’s (QCOM) latest Snapdragon Ride and Cockpit platforms, including the Snapdragon Ride Flex platform, to introduce the Snapdragon Ride SX Automotive Development Platform (ADP). The platform is designed to facilitate the development of customizable infotainment, cluster, and driver monitoring systems (DMS).
LTRX’s net revenue for the fiscal first quarter ended September 30, 2023 increased 3.9% year over year to $33.03 million. Gross profit increased slightly from the prior year period to $14.1 million. The company’s non-GAAP net income and net income per share were $2.46 million and $0.07, respectively.
LTRX’s total current assets as of September 30, 2023 were $98.91 million, and as of June 30, 2023, they were $96.55 million.
Analysts expect LTRX’s sales and EPS for the second quarter of the fiscal year ending December 2023 to be $37.59 million and $0.08, an increase of 19.3% and 105% year-on-year, respectively.
Shares have increased 37.7% over the past three months, closing at $6.10. It has increased 32.6% over the past year.
LTRX’s POWR Rating reflects a solid outlook. The stock has an overall rating of ‘A’, which equates to a ‘Strong Buy’ according to our proprietary system.
It has an A grade for sentiment and a B grade for growth, momentum, and quality. Ranked #5 out of 35 stocks in the B-rated Technology – Hardware industry.
In addition to the POWR ratings above, you can access additional value and stability ratings for LTRX here.
What’s next?
Steve Reitmeister, a 43-year investment veteran, shares his market outlook for 2024, his trading plans for the year ahead, and his top 11 stocks.
Stock market outlook for 2024 >
FJTSY stock was trading at $28.30 per share Thursday morning, down $0.31 (-1.08%). Year-to-date, FJTSY has declined -5.76%, while the benchmark S&P 500 index has gained -0.56% during the same period.
About the author: Kritika Sarma
An interest in risky financial products and a passion for writing led Kritika to become an analyst and financial journalist. She earned a Bachelor’s degree in Commerce and is currently enrolled in the CFA program. She aims to help investors identify untapped investment opportunities with her fundamental approach. more…
Additional resources for stocks in this article
Source link
