The majority of technology stocks had a stellar run in 2021 due to the continuing digital transformation and move to remote working. The expectational growth witnessed by some of these companies in 2020 have helped their shares skyrocket. In fact, the technology sector as a whole, has performed pretty well this year, as evident from the Dow Jones US Technology Index’s 45.8% return.
Even though the pandemic has been the primary trigger for this growth in 2020, many analysts believe that the working culture may have changed permanently. Companies are increasingly adopting cloud-based solutions and relying on software solutions for their business processes.
Companies like Atlassian Corporation (TEAM), IAC/InterActiveCorp (IAC), and Vuzix Corporation (VUZI) are at the forefront of this change. These companies are involved in digital media, augmented reality, and productivity solutions that are expected to gain more importance with the continued change in consumer and corporate behavior. So, it could be wise to consider owning these stocks in 2021 as they could benefit from their solid revenue and earnings growth.
Atlassian Corporation (TEAM)
TEAM is involved in the development and marketing of prepackaged software tools. The company offers a range of solutions for tasks such as testing and tracking code. TEAM’s stock has gained 94.5% so far this year.
TEAM has recently launched Jira Service Management, which is a new cloud-based tool for IT service management. This tool is designed to support IT processes and make them easier to implement. Jira Service Management is an upgrade on the company’s earlier offering called Jira Service Desk, which is used by more than 25000 organizations.
TEAM’s revenue grew at a CAGR of 36.1% over the last three years. TEAM is expected to see revenue growth of 14.4% for the quarter ending March 2021 and 17% in 2021. The company’s EPS is estimated to grow 25.7% in 2021, and at a rate of 14.8% per annum over the next five years.
How does TEAM stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
B for Industry Rank
A for Overall POWR Rating
The stock is also ranked #4 of 98 stocks in the Software – Application industry.
IAC is a media and internet company that operates in the United States and internationally. IAC owns and operates more than 150 digital products and brands. IAC’s stock has risen 129.8% year-to-date.
The company recently announced its plans to introduce Vimeo, a popular video software company, as an independent public company. HomeAdvisor, the company’s subsidiary operating in the digital home services marketplace, is partnering with Affirm to provide flexible and easy-to-understand payment options for its customers.
IAC’s EPS grew at a CAGR of 16.6% over the last five years. IAC’s revenue is estimated to increase 13.8% in 2021. The company’s EPS is expected to rise 48.9% in 2021 and 37.7% per year over the next five years.
IAC’s strong fundamentals are reflected in its POWR Ratings. It has a grade of “A” for Trade Grade and Industry Rank.
Vuzix Corporation (VUZI)
VUZI is involved in the development, manufacture, and marketing of wearable display devices. The company has operations in the United States and internationally. VUZI’s stock price has increased 363.2% year-to-date.
The company recently announced that both its M4000 and M400 smart glasses will now support Zoom, Skype for Business, and Webex Teams connector applications. This move could greatly improve the usability of the company’s smart glasses offerings. The company is experiencing greater demand for its smart glasses in the manufacturing, field services, and healthcare sectors. For instance, a prominent European reseller has placed a large order for the smart glasses with the company.
VUZI’s revenue grew at a CAGR of 26.8% over the last three years. VUZI’s revenue is expected to grow 80.3% for the quarter ending December 2020 and 58.4% in 2021. The company’s EPS growth is expected to be 25% in 2021 and 20% per annum over the next five years.
VUZI’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 #20 out of 38 stocks in the Technology – Electronics industry.
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TEAM shares were trading at $232.68 per share on Thursday morning, down $1.36 (-0.58%). Year-to-date, TEAM has gained 93.35%, versus a 17.60% 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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