It’s no secret that tech stocks have dominated headlines and portfolios this year, often boasting eye-watering valuations. However, while many have been chasing after the latest and greatest, there lies a distinct opportunity in the sector.
Of course, I’m talking about tech stocks nearing their 52-week lows. These are the innovators and disruptors that, for one reason or another, have been beaten down, presenting what could be a bargain buy.
Now, a word of caution: picking up tech stocks to buy at 52-week lows is not for the faint of heart. We’re diving deep here, spotlighting companies that are teetering within a mere 5% of their lowest point over the past year. If wild market swings make you queasy, this might not be the best playground for you.
Yet, for those willing to embrace the risk, there’s a silver lining. Each of these downtrodden tech companies boasts a bullish consensus rating from Wall Street analysts. While such endorsements don’t provide a safety net, they do suggest that there’s more to these stories than just their current stock prices. Ready for some high-risk, potentially high-reward plays?
Let’s delve into these tech stocks to buy at 52-week lows.
Based in Redwood City, California, Box (NYSE:BOX) is an enterprise content management platform that provides cloud-based solutions for businesses to manage and collaborate on content. Primarily, the company allows its users to securely store, share, and access files online. This enables more seamless collaboration with colleagues, vendors, and other business partners.
Still, despite its relevance, BOX is clearly one of the riskiest ideas among tech stocks to buy at 52-week lows. In the trailing one-year period, shares only dipped around 2%, which isn’t that bad. However, in the past month, BOX tanked more than 20%, understandably leading to viability concerns.
While terribly risky, it appears to have upside potential. According to the investment data aggregator, BOX is modestly undervalued. As evidence, it trades at 16.5X forward earnings, below the sector median of 22.53x.
Finally, analysts peg BOX as a consensus moderate buy. Their average price target comes in at $32, implying 33% upside potential.
A business services company, Concentrix (NASDAQ:CNXC) specializes in customer engagement and business performance. Specifically, its core services include customer care, sales, technical support, and business analytics. Concentrix assists clients in enhancing customer value, improving the customer experience, and streamlining operations. Since the start of the year, CNXC stock faded a bit more than 45%.
Of course, part of the red ink – which involves losing 36% in the trailing one-year period – involves the uncertain business environment. With inflation remaining stubbornly high while the Federal Reserve attempts to rein in prior excesses through interest rate hikes, the underlying ecosystem faces significant headwinds.
Still, CNXC could be a steal among tech stocks to buy at 52-week lows. Gurufocus identifies shares as significantly undervalued, pointing to its lowly forward earnings multiple of 5.94x. In contrast, the sector median comes in at 22.53x. Analysts rate CNXC as a moderate buy with a $101.60 price target, implying over 39% upside potential.
An online payroll and human resource technology provider, Paycom (NYSE:PAYC) has long been a relevant component of corporate America. Per its public profile, Paycom ranks among the first fully online payroll providers. However, circumstances have not been particularly pleasant in 2023. Amid wildly choppy trading, PAYC slipped almost 16% since the January opener.
In the past 365 days, PAYC gave up slightly more than 21%. A major negative catalyst centers on the aforementioned ambiguous business environment. Obviously, factors such as rising benchmark interest rates aren’t conducive to growth. And that might impede Paycom’s progress.
At the same time, Paycom could also benefit from the pivot to the integration of decentralized workforces. Therefore, it wouldn’t be surprising to see PAYC as one of the tech stocks to buy at 52-week lows. Analysts rate PAYC a strong buy with a $389.75 price target, implying almost 52% upside potential.
Another Redwood City-based company, PubMatic (NASDAQ:PUBM) develops and implements online advertising software and strategies for the digital publishing and advertising industry. Per its corporate profile, PubMatic’s sell-side, real-time programmatic ad transaction advertising software puts publishers of websites, videos, and mobile apps into contact with ad buyers by using automated systems.
While an exciting enterprise before the pandemic and during the worst of the global health crisis, since peaking in early 2021, PUBM has not looked enticing. Since the January opener, shares slipped 11%. In the past 365 days, they fell almost 28%. Naturally, the questionable backdrop of the digital advertising industry puts a damper on PubMatic.
However, if we get the so-called soft landing, PUBM could be interesting. For example, it’s priced at only 2.36x tangible book value, below the sector median of 3.6x. Lastly, Wall Street experts rate PUBM a moderate buy with a $17.80 price target, implying 52% upside.
To be fair, I haven’t been a big fan of dating app Bumble (NASDAQ:BMBL) and I’m not exactly over-the-top enthusiastic about it. As I’ve mentioned before, the directive behind the platform – that women in traditionally oriented relationships make the first move – is a noble one. Supposedly, this action helps foster equity in opposite-gender relationships. However, it also halves the total addressable market.
Without getting bogged down in the granularity, what ends up happening with such protocols is an imbalance. Most female users would compete with the top-tier male users, leaving many unsatisfied customers across the spectrum. Plus, individual customers should probably decide if they want to make the first move or not.
That said, the moves that have been happening are in the options market. With options flow data pointing to big block trades involving the sale of put options, the underlying sentiment ranks between neutral to bullish. It’s risky but BMBL could be one of the tech stocks to buy. It also has a $22.75 price target, implying over 55% growth.
A multinational technology conglomerate, Block (NYSE:SQ) was arguably better known under its former name Square. Focusing on financial technology (fintech) and mobile payments, Block still specializes in its point-of-sale systems. Such platforms allow businesses – especially small ones – to provide a similar customer experience as larger enterprises.
As well, Block features a mobile payment app called Cash App, which allows the transfer of various units of wealth, including cryptocurrency. While one of the most popular innovators, SQ unfortunately has not had a great time in the market recently. Since the beginning of this year, shares fell about 31%. In the past 365 days, they’re down almost 21%.
Still, a comprehensive economic recovery could make SQ one of the tech stocks to buy at 52-week lows. Notably, Block’s three-year revenue growth rate clocks in at 44.1%. However, SQ trades at only 1.46x trailing revenue. Analysts peg SQ as a strong buy with an $85.96 price target, implying over 92% growth potential.
Sunnova Energy (NOVA)
Headquartered in Houston, Texas, Sunnova Energy (NYSE:NOVA) is a residential solar and energy storage service provider. It focuses on providing homeowners with a range of energy solutions, including solar energy systems and battery storage products. Given the political and ideological climate, Sunnova is supremely relevant.
However, relevance alone hasn’t translated to chart success. Since the January opener, NOVA has given up more than 38% of its equity value. In the trailing one-year period, it staggered to a loss of over 56%, which is hardly encouraging stuff. Headwinds, particularly residents of certain states enjoying access to relatively cheap electricity, have made solar integration difficult.
Still, for the intrepid trader, NOVA could be one of the tech stocks to buy at 52-week lows. Although it gives off value trap warnings, Sunnova trades at low multiples of revenue and tangible book. Analysts love NOVA, pegging it a strong buy with a $29.26 price target, implying 170% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.