While many expect a vaccine-driven economic recovery to shift investors’ focus away from the technology sector, the continued spread of the virus is still increasing widespread dependence on technology solutions. The global cloud-migration- services market is estimated to grow at a CAGR of 22% by 2023, indicating the continuation of a fast-paced digital transformation. Technology companies have both high revenue growth and momentum on their side.
However, as most of the major technology companies are trading at extremely high current valuations, it could be wise to bet on relatively affordable stocks that have better potential for future growth.
Kopin Corporation, Inc. (KOPN), eMagin Corporation (EMAN), and Innodata, Inc. (INOD) have seen triple-digit gains in 2020, but are still trading at affordable prices. These companies are poised to repeat the performance in 2021.
Kopin Corporation, Inc. (KOPN)
KOPN develops, manufactures, and markets wearable devices and display products. The company has operations in the U.S. , Europe, and the Asia-Pacific. Over the past year, KOPN’s stock has gained 644.2% to close Friday’s trading session at $3.2.
KOPN recently announced that its 2.6K x 2.6K OLED display has been integrated into the new Panasonic VR glasses introduced at the CES 2021. The company has also entered into an agreement with Jade Bird Display to collaborate in the development of super-bright monochrome LED micro-displays.
For the quarter ended September 30, 2020, the company saw an increase in revenue of 55% year-over-year. Its product revenue increased 31% during the same period.
KOPN is expected to see a revenue growth of 6.9% for the quarter ended December 31, 2020 and 10.6% in 2021. The company’s EPS is estimated to grow 25% for the quarter ended March 31, 2021 and at a rate of 20% per annum over the next five years.
How does KOPN stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
B for Industry Rank
B for Overall POWR Rating
The stock is ranked #27 of 52 stocks in the Technology – Hardware industry.
eMagin Corporation (EMAN)
EMAN develops, manufactures, and markets OLED displays and virtual imaging products. The company was founded in 1996. EMAN closed Friday’s trading session at $2.17, gaining 429.3% over the past year.
EMAN recently signed a new 10-year lease to expand its New York manufacturing facility by 25%. The company was recently awarded two new patents for its Direct Patterning Display (dPd) technology.
For the quarter ended September 30, 2020, the company saw an increase in military display of 19% compared to the same period last year. The company increased its research and development expenditure by 65.7% during the same period.
EMAN’s revenue is estimated to increase 2.3% for the quarter ended December 30, 2020 and 9.9% in 2021. The company’s EPS is expected to rise 20% per year over the next five years.
EMAN’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with an “A” for Trade Grade and Industry Rank. It is ranked #87 of 99 stocks in the Semiconductor & Wireless Chip industry.
Innodata, Inc. (INOD)
INOD provides data engineering services for enterprise customers. The company uses artificial intelligence and machine learning to deliver data engineering solutions. INOD’s stock price has increased 351.8% over the past year to close Friday’s trading session at $5.06.
INOD recently participated in the ‘AI in Finance’ summit hosted by Re-Work. Last year, the company helped to bring new facilities to a school in Dankaur, India as part of its CSR outreach.
For the quarter ended September 30, 2020, the company saw an increase in revenue of 5% compared to the previous quarter. The company’s revenue from SaaS platforms increased 3.1% compared to the third quarter of 2019. The company’s EPS growth is expected to be 20% per annum over the next five years.
It is no surprise that INOD has a “Buy” in our POWR Ratings systems with a grade of “A” in Trade Grade. In the 81-stock Technology – Services industry, INOD is ranked #32.
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KOPN shares rose $0.02 (+0.56%) in after-hours trading Tuesday. Year-to-date, KOPN has gained 46.09%, versus a 1.28% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More…
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