Technology stocks offer high-growth prospects, thus delivering higher growth potential. Given their future-oriented businesses and innovative products, these companies can provide superior returns in the long run. However, these companies trade at higher valuations and are riskier. So, investors with higher risk-tolerance abilities and longer investment horizons can buy these stocks to reap above-market returns.
Meanwhile, here are three tech companies that I am bullish on, given their healthy growth prospects and discounted stock prices.
Lightspeed Commerce
Lightspeed Commerce (TSX:LSPD) offers small and medium-scale businesses one-stop commerce solutions. The company has been under pressure this year, losing over 30% of its stock value. Although it reported a solid third-quarter performance of fiscal 2024 earlier this month, the company’s cautious outlook amid an uncertain macroeconomic environment made investors nervous, dragging its stock price down. The selloff has dragged its valuation down to attractive levels, with its NTM (next 12-month) price-to-sales multiple at 2.1.
Meanwhile, the company’s fundamentals remain solid, with its revenue growing by 27%. Supported by new product launches and expansion of its innovative products to new markets, the company is expanding its customer base and growing its ARPU (average revenue per user). Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) came in at $3.6 million, compared to a loss of $5.4 million in the previous year’s quarter.
With businesses adopting the omnichannel selling model, the demand for the company’s products and services is rising, creating a multi-year growth potential. The company’s new product launches and Unified Payments initiative could continue to drive its financials in the coming years. So, I believe Lightspeed Commerce would be an excellent buy at these levels.
Nuvei
Second on my list is Nuvei (TSX:NVEI), which allows businesses to accept next-generation payment methods through its modular, flexible, and scalable technology. After delivering over 70% returns in the fourth quarter, the company is under pressure this year, losing 3% of its stock value. The skepticism amid the uncertain broader market outlook has weighed down the company’s stock price. Amid the selloff, its valuation looks attractive, with its NTM price-to-sales and NTM price-to-earnings multiples standing at 2.6 and 12.5, respectively.
Meanwhile, given the growing popularity of digital transactions, the company’s growth prospects look healthy. The company is focusing on new product launches, making strategic partnerships, and geographically expanding its footprint, which could continue to drive its financials in the coming years. The management also expects its topline to grow 15-20% annually and hopes to improve its adjusted EBITDA margin to above 50% in the long term. So, I believe Nuvei would be an excellent buy at these levels.
BlackBerry
Another cheap tech stock I am bullish on is BlackBerry (TSX:BB), which is trading over 50% lower than its 52-week high. Although the company posted a solid third-quarter performance, the management provided a weak fourth-quarter guidance. The company has blamed the labour stoppages and delays in implementing its products in vehicles for soft guidance. The Internet of Things segment, which the management had projected to grow at 20%, will grow lower than 4.5% considering its fiscal 2024 guidance.
However, given its solid long-term growth prospects, I believe the selloff offers an excellent buying opportunity. The demand for advanced driver assistance systems is rising amid the growing demand for vehicle safety features, thus creating a long-term growth potential for the company. The company is also focusing on strengthening its position in the cybersecurity space through artificial intelligence-driven cybersecurity solutions.
