Tech stocks made a significant turnaround in 2023 following a horrendous 2022. Information technology is the top-performing sector thus far, outpacing the TSX by a mile year to date at +34.43% versus +2.55%. Enthusiasm for growth stocks is back as the resurgence continues.
BlackBerry (TSX: BB), Payfare (TSX: PAY), and Propel Holdings (TSX: PRL) are excellent buying opportunities. These tech stocks trade for less than $10 and are ready to skyrocket higher than their current market-beating returns.
Cybersecurity leader
Investors only warmed up to BlackBerry this year. At $6.21 per share, the cybersecurity stock is up by nearly 41% year to date compared to the 62.7% loss in 2022.
Besides the robust revenue growth to start fiscal 2024, the $3.61 billion intelligent security software provider is fortifying its market position in the cybersecurity industry. BlackBerry leverages artificial intelligence (AI) and machine learning to deliver innovative solutions, particularly cybersecurity, safety, and data privacy.
This Waterloo-based firm also champions endpoint security, endpoint management, encryption, and embedded systems. In the three months that ended May 31, 2023, revenue climbed 122% to US$373 million versus the first quarter (Q1) of fiscal 2023. Also, net loss improved to US$11 million (93.9%) compared to a US$181 net loss from a year ago.
John Chen, BlackBerry’s executive chairman and chief executive officer (CEO), sees no change in secular trends. He hopes to achieve revenue consensus for the Internet of Things (IoT) and Cybersecurity business units this fiscal year.
Powering the next-gen workforce
The gig economy is booming thanks to Payfare, which powers the workforce and gig platforms. This $305.48 million financial technology company offers digital banking, instant payout, and loyalty-reward solutions. Its highly scalable fintech platform provides financial security and inclusion to next-generation workers.
Payfare’s business thrives, as evidenced by the impressive financial results in Q2 2023. In the three months that ended June 30, 2023, revenue increased 43% year over year to a record $46.5 million. Remarkably, net income soared 191% to $2.1 million, while the active user count grew 34% to 1,188,325 versus Q2 2022. The current share price is $6.35 (+48.02% year to date).
Its CEO and founding partner, Marco Margiotta, said, “Our business development pipeline remains active with opportunities in the gig economy and Earned Wage Access (EWA) for regular employers.” Leading gig platforms such as DoorDash, Lyft, and Uber Technologies are EWA clients.
Industry-leading AI model
Propel flies under the radar but boasts a positive return of 20.89% year to date ($8.68 per share). This $297.94 million fintech platform provides best-in-class credit solutions to clients in Canada and the United States. A breakout is inevitable, given the company’s robust originations and accelerating new customer volume.
Management also believes Propel’s AI-powered underwriting technology is the key to profitable growth. The industry-leading AI model evaluates risk better than traditional credit scores. In the first half of 2023, revenue and net income rose 31.3% and 122.8% year over year to US$137.3 million and US$13.1 million.
Expect the company’s expertise in consumer lending and AI capabilities in underwriting to further propel the stock. The overall return should be higher to include the 4.8% dividend yield.
Strong legs
The comeback of tech stocks in 2023 is incredible but unsafe, considering the stubborn inflation and rising interest rates. However, BlackBerry, Payfare, and Propel have the legs to continue advancing because of inherent strengths in their respective businesses.
