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Investing Insights: Promising Technology Services Stocks to Consider
The technology services industry is showing signs of maturity, with strong demand contributing to its growth. Revenues, income, and cash flows are expected to gradually reach pre-pandemic levels, allowing many companies within the sector to maintain consistent dividends. Overall, the industry is thriving as we enter 2024.
The Technology Services Landscape in 2024
The business software sector is benefiting from increased demand for software solutions that enable multi-cloud operations. This trend reflects a significant shift from traditional systems to advanced cloud-based infrastructures.
Companies are actively integrating artificial intelligence and machine learning into their platforms, enhancing their functionality and effectiveness. The surge in demand for enterprise software is driving productivity and improving decision-making, which are crucial factors for growth.
Over the past year, the Zacks Defined Technology Services industry has experienced notable growth, with a remarkable increase of 76.4%. In 2024 alone, the industry has already risen by 53.8%. Given that it ranks in the top 26% of Zacks Ranked Industries, it is poised to outperform the market in the upcoming three to six months.
Top 5 Small and Mid-Cap Tech Stocks to Watch
We have identified five mid and small-cap technology services stocks that have a favorable Zacks Rank and significant potential for price appreciation in the short term. Each of these stocks has either a Zacks Rank of #1 (Strong Buy) or #2 (Buy). For a comprehensive look, you can see the full list of Zacks #1 Rank stocks here.
MediaAlpha Inc. (Zacks Rank #1)
MediaAlpha operates a platform focused on insurance customer acquisition in the United States. The company specializes in optimizing customer acquisition across various insurance sectors including property, casualty, health, and life insurance. Their technology leverages real-time programmatic strategies for vertical search and metasearch.
Significant Price Upside for MAX Stock
The average price target from analysts suggests a remarkable increase of 95.6% from the last closing price of $12.47. Targets range from $13 to $31, indicating as much as a 148.6% upside potential.
MediaAlpha is projected to have revenue and earnings growth rates exceeding 100% this year, with a 20% improvement in the current-year earnings estimate over the last month.
Image Source: Zacks Investment Research
Braze Inc. (Zacks Rank #2)
Braze provides an extensive customer engagement platform that facilitates interactions between brands and consumers. The company operates in several major cities including Berlin, Chicago, London, San Francisco, Singapore, and Tokyo, enabling real-time data processing to optimize marketing campaigns.
The average analyst target for BRZE indicates a potential increase of 53.6% from the recent closing price of $35.70, with a price range of $30 to $75. This suggests an upside of 110.1%, despite a maximum downside of 16%.
Braze anticipates revenue growth of 23.9% and earnings growth exceeding 100% for the fiscal year ending January 2025. In the last three months, earnings projections have significantly improved, showcasing strong momentum.
Image Source: Zacks Investment Research
Byrna Technologies Inc. (Zacks Rank #2)
Byrna Technologies specializes in less-lethal self-defense products, offering solutions without the need for a firearm license. The company distributes personal security devices across various markets including the United States, South Africa, Europe, and Asia.
Their product range is available through numerous channels, including their e-commerce site, third-party retailers, and a dedicated professional security program.
The average price target for BYRN reflects a 24.4% increase from the last closing price of $18.38. Analysts set target prices between $20 and $25, indicating possible gains of 36% without downside risk.
Byrna Technologies forecasts revenues growing at 18.8% and earnings at 17.7% for the following year ending November 2025. The earnings estimate has seen an 11.1% rise over the past two months.
Image Source: Zacks Investment Research
The Real Brokerage Inc. (Zacks Rank #2)
The Real Brokerage is reshaping the real estate landscape in the United States with its technology-focused approach.
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REAX and KVYO Stocks Show Promising Growth Potential
REAX: Bright Future Ahead for Real Brokerage
REAX operates in North America through three segments: North American Brokerage, Real Title, and One Real Mortgage, providing services in brokerage, title, and mortgage brokering.
The average short-term price target from brokerage firms indicates a potential rise of 34.2% from its last closing price, which was $5.51. The target price is estimated to be between $8 and $8, suggesting an upside potential of 56.9% with no expected decline.
For the current year, The Real Brokerage anticipates revenue and earnings growth rates of 76.2% and 0.1%, respectively. In the past week, the Zacks Consensus Estimate for this year’s earnings has increased by 16.7%.
Image Source: Zacks Investment Research
Klaviyo Inc.: A Tech Leader in Marketing Solutions
Klaviyo Inc., ranked #1 by Zacks, specializes in software-as-a-service (SaaS), operating globally across numerous regions including the Americas, Asia-Pacific, and Europe. The company provides a cloud-based platform tailored for data storage, segmentation, campaign management, and messaging infrastructure.
Their platform includes features for personalized marketing emails – with user-friendly drag-and-drop templates, automation tools that utilize smart send time features, AI assistance for subject line creation, A/B testing options, and targeted messaging capabilities. This enables businesses to engage customers effectively through various channels.
KVYO Stock Offers Strong Price Growth Potential
The average short-term price target from analysts suggests a possible increase of 13.3% from the last closing price of $36.53. Current target prices range from $30 to $47, indicating a maximum estimated increase of 28.7% with a maximum downside of 17.9%.
Klaviyo forecasts a revenue growth rate of 32.2% and an earnings growth rate of 36.1% for the year ahead. The Zacks Consensus Estimate for earnings has also seen a slight rise of 2.1% in the last month.
Image Source: Zacks Investment Research
Top 7 Stocks to Watch for Quick Gains
Experts recently released a list of 7 select stocks from a total of 220 Zacks Rank #1 Strong Buys. These stocks are deemed most likely to see significant price increases soon.
Since 1988, this curated list has more than doubled the market, averaging a gain of 23.7% per year. Investors should take note of these seven stocks promptly.
Byrna Technologies Inc. (BYRN): Free Stock Analysis Report
MediaAlpha, Inc. (MAX): Free Stock Analysis Report
The Real Brokerage Inc. (REAX): Free Stock Analysis Report
Braze, Inc. (BRZE): Free Stock Analysis Report
Klaviyo, Inc. (KVYO): Free Stock Analysis Report
Read this article on Zacks.com here.
The views and opinions expressed herein are the author’s and do not necessarily reflect those of Nasdaq, Inc.
