The increasing digitization of business and the growing adoption of various emerging technologies are increasing the demand for new and updated hardware. Therefore, hardware inventory is limited to Canon Inc. (cappy), Dell Technologies, Inc. (Dell), and Daktronics, Inc. (duct), which analysts are bullish on, could be a smart portfolio addition.
Before we dive deeper into the fundamentals of these stocks, let’s discuss why the tech hardware industry is well-positioned for growth.
The technology industry is constantly evolving and requires cutting-edge hardware. As software advances, new and updated hardware is required to run those applications seamlessly.
Additionally, increasing investments in digitalization across various sectors are increasing the demand for hardware such as servers, data centers, etc. Additionally, the introduction of emerging technologies such as artificial intelligence, machine learning, and the Internet of Things are all driving demand for hardware. These technologies require advanced hardware to meet complex processing and data storage requirements.
Gartner expects global IT spending to increase 3.5% compared to previous year It expects spending on devices to drop 10% year over year to $689.29 billion this year, but expects it to rise 4.8% year over year to $722.47 billion in 2024.Market is expected to grow rapidly CAGR 7.9% It is expected to reach $177.11 billion.
With these favorable trends in mind, let’s analyze three fundamentals. Technology – Hardware Start with the third option.
Stock #3: Canon Inc. (cappy)
Headquartered in Tokyo, CAJPY manufactures and sells office multifunction devices (MFDs), laser and inkjet printers, cameras, medical equipment, and lithography equipment worldwide. The company operates through Printing Division, Imaging Division, Medical Division, Industrial Division, and Other segments.
On October 13, 2023, CAJPY announced the release of nanoimprint semiconductor manufacturing equipment FPA-1200NZ2C. With the release of “FPA-1200NZ2C,” we will expand our lineup of semiconductor manufacturing equipment and respond to the needs of a wide range of users.
On March 23, 2023, CAJPY announced that it will acquire assets such as mass production technology for therapeutic cells and cells for clinical applications owned by Kyoto Seisakusho Co., Ltd. With this acquisition, CAJPY will strengthen its ability to mass-produce cells that enable regenerative medicine and medicine. Other treatments.
Furthermore, this mass production technology offers benefits such as stable quality and reduced quality inspection costs.
In terms of net profit margin over the past 12 months, CAJPY’s 6.44% is 216.6% higher than the industry average of 2.03%. Similarly, the company’s trailing-twelve-month His EBIT Margin of 9.17% is 96.8% higher than the industry average of 4.66%.Plus, 14.78% trailing 12 months. EBITDA margin 61.2% higher than the industry average of 9.17%.
CAJPY’s net sales for the third quarter of the fiscal year ended September 30, 2023 were 1.03 trillion yen ($6.88 billion), an increase of 2.9% from the same period last year. Operating income increased 1.5% year on year to 82.62 billion yen ($551.97 million). The company’s net income attributable to CAJPY increased 14.8% year over year to 62.13 billion yen ($415.09 million). Additionally, EPS was 62.62 yen, an increase of 18.4% compared to the same period last year.
Street expects CAJPY’s revenue to increase 1.8% year over year to $7.47 billion for the quarter ending June 30, 2024. His stock has increased 7.5% over the past year, closing his last trade at $22.98.
Mr. CAJPY power rating reflects a solid outlook. The overall rating is B, which equates to a “buy” in our own rating system. POWR Ratings evaluates stocks by 118 different factors, each with its own weighting.
Within B rating Technology – Hardware Ranked 9th out of 40 stocks in the industry. B grade for value, stability, and quality. Check out more reviews on CAJPY growth, momentum, and sentiment: click here.
Stock #2: Dell Technologies Inc. (Dell)
DELL designs, develops, manufactures, markets, sells and supports a variety of comprehensive and integrated solutions, products and services in the Americas, Europe, the Middle East, Asia and internationally. The company operates through its two segments: Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG).
On July 19, 2023, DELL announced that it has entered into a definitive agreement to acquire Moogsoft, an AI-driven intelligent monitoring solutions provider supporting DevOps and ITOps. This acquisition strengthens DELL’s AIOps capabilities as part of DELL’s approach to incorporating AI capabilities into its product portfolio and as a key component of its “Multi-Cloud by Design” strategy.
In terms of CapEx/Sales over the past 12 months, DELL’s 3.02% is 25% higher than the industry average of 2.42%. Similarly, the company’s trailing-twelve-month His EBIT margin of 5.54% is 18.9% higher than the industry average of 4.66%. Return on total equity for the trailing twelve months was 12.86%, which was 420.5% higher than the industry average of 2.47%.
DELL’s total net revenue for the second quarter ended August 4, 2023 was $22.93 billion. Non-GAAP operating income increased 1.3% year over year to $1.98 billion. The company’s non-GAAP net income increased 1.3% year over year to $1.28 billion. Additionally, non-GAAP EPS was $1.74, an increase of 3.6% year over year.
Analysts expect DELL’s EPS to increase 0.3% year-over-year to $1.80 for the quarter ending January 31, 2024. Revenue for the quarter ending April 30, 2024 is expected to be $22.35 billion, up 6.8% year over year. It beat Street EPS estimates in each of the subsequent four quarters. Shares have increased 74.7% over the past year, closing at $65.96.
DELL’s POWR Rating reflects this positive outlook. The overall rating is B, which is equivalent to a “buy” according to our own rating system.
It ranks 4th in the industry. It gets an A grade for sentiment and a B grade for growth and value. click here To see other reviews of DELL on Momentum, Stability, and Quality:
Stock #1: Daktronics, Inc. (duct)
DAKT designs, manufactures and markets electronic display systems and related products for sports, commercial and transportation equipment. The company operates through the Commercial, Live Events, High School Parks and Recreation, Transportation, and International segments. The company also offers video displays and walls, scoreboards and timing systems, message displays, intelligent transport, dynamic message signs, and more.
In terms of return on common stock over the past 12 months, DAKT’s 15.36% is significantly higher than the industry average of 1.13%. The company’s trailing 12-month EBITDA margin was 10.96%, which was 19.6% higher than the industry average of 9.17%. Similarly, the company’s trailing twelve month asset turnover of 1.66x is 169.3% higher than his industry average of 0.62x.
DAKT’s net sales for the fiscal first quarter ended July 29, 2023 were $232.53 million, an increase of 35.3% from the same period last year. Gross profit increased 175.8% year-on-year to $71.15 million. Moreover, the net income amounted to him $19.2 million (compared to a net loss of $5.33 million in the same period last year). Additionally, EPS was $0.42, compared to net loss per share of $0.12 in the prior year period.
DAKT’s EPS for the quarter ending October 31, 2023 is expected to be $0.13, up 208.3% from the year-ago period. Revenue for the quarter ending January 31, 2024 is expected to be $203.5 million, up 10% from the same period last year. Shares have increased 243.6% since the beginning of the year, closing at $9.69.
DAKT’s strong fundamentals are reflected in its POWR rating. According to our unique rating system, the overall rating is “A”, which is equivalent to “Strong Buy”.
It has an A grade for growth and value and a B grade for sentiment and quality. Technology – Ranked #1 in the hardware industry. To check DAKT’s momentum and stability rating, click here.
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DELL stock was trading at $66.39 per share on Monday morning, up $0.43 (+0.65%). Year-to-date, DELL has increased by 69.97%. In comparison, the benchmark S&P 500 index rose 9.18% in the same period.
About the author: Dipanjan Vanture
Dipanjan has been interested in the stock market since his elementary school days. This earned him a master’s degree in finance and accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a keen interest in reading and analyzing emerging trends in financial markets. more…
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