Building a portfolio of quality tech stocks can make you rich, allowing you to accelerate your retirement plans by a few years. Companies in the technology sector generally benefit from high operating leverage, which means their profit margins grow at a much larger pace compared to revenues.
While tech stocks are trading significantly below record highs in 2023, investors should note that, on average, a bear market lasts for less than 300 days, making the ongoing downturn an ideal time to buy quality companies at a discount.
Here are three top tech stocks that can help you retire rich.
CrowdStrike stock
Among the fastest-growing tech stocks globally, CrowdStrike (NASDAQ: CRWD) stock is down 56% from all-time highs, valuing it at US$31.7 billion by market cap. Its flagship offering is Falcon, which provides security to computers, smartphones, servers, and other hardware against network breaches.
CrowdStrike ended fiscal 2023 (ended in January) with more than 23,000 customers, an increase of 41% year over year. The company’s net retention rate was also above 20%, indicating existing customers increased spending on the CrowdStrike platform by at least 20% in the last 12 months. Moreover, around 400 customers generate over US$1 million in annual recurring revenue for CrowdStrike.
Its sales in the last four quarters soared by 54% to US$2.2 billion, while adjusted net income almost doubled to US$356 million. Comparatively, free cash flow stood at US$677 million, indicating a margin of 30%, which showcases the company’s pricing power.
Valued at 10 times forward sales and 56 times forward earnings, CRWD stock is trading at a premium. But analysts remain bullish and expect shares to gain 30% in the next 12 months.
Payfare stock
A fintech company, Payfare (TSX: PAY) provides payout and digital banking solutions to gig economy workers in North America. It basically offers solutions ranging from banking services, bill payments, and savings wallets to users.
In Q1 2023, Payfare increased sales by 76% to $42.3 million and is on track to end the year with revenue between $185 million and $195 million. The payment solutions provider ended the quarter with 1.1 million users, an increase of 62%, while the total gross dollar value was up 86% at $2.7 billion. The company reported free cash flow of $4.1 million, indicating a margin of 10%.
Payfare stock is priced at less than two times forward sales and 16.5 times forward earnings, which is really cheap for a growth company. The company continues to expand its portfolio of products and solutions, driving future cash flows higher and improving customer retention rates.
Analysts tracking Payfare expect the stock to gain 113% in the next 12 months.
Docebo stock
The final tech stock on my list is Docebo (TSX: DCBO), an enterprise-facing e-learning company. Down 65% from all-time highs, DCBO stock is trading at a discount of 82% to consensus price target estimates.
In Q1 2023, Docebo increased sales by 29% year over year to US$41.5 million, while subscription sales were up 33% at US$38.8 million, accounting for 94% of total sales.
The company ended Q1 with 3,506 customers, up 19% from the year-ago period. Its average contract value also rose, 7.2% to US$47,034 in this period.
Docebo’s notable customer wins include a Europe-based transportation and logistics giant with operations in 160 countries. The e-learning company also onboarded Vimeo, a leading video experience platform, to address compliance and professional development requirements.
The Foolish takeaway
Each of the three tech stocks continues to grow at a rapid clip, despite a sluggish global environment. The three companies are also part of expanding addressable markets, making them top bets right now.
