One of the golden rules in the market (and in life) is that you get what you pay for, which makes the concept of cheap tech stocks a bit questionable. Yes, they may be cheap, priced at under $10. But is that really a good thing?
Invariably, when you take a shot in the market, you must choose between higher potentiality or higher predictability. The former approach is more tempting because it means more upside – if you get it right. If you don’t, you’re probably looking at steep losses. At that point, you should have went with the boring and predictable names.
However, you likely can’t strike it rich without taking some calculated potshots. With that in mind, below are cheap tech stocks to consider.
Motorcycle helmet with Grab logo on a motorcycle parked at the road side
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Falling under the application software component of cheap tech stocks, Grab (NASDAQ:GRAB) engages in the provision of super apps in compelling emerging markets. These are Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Per its public profile, the company offers its Grab ecosystem, which facilitates a wide range of services such as mobility and delivery.
What makes GRAB very enticing is that it currently runs a three-year revenue growth rate of 72%. Further, its EBITDA growth rate during the same period comes in at 37.5%. Granted, these metrics will slow as the enterprise expands. Still, at the moment, GRAB stock trades at 2.28X tangible book value, below the sector median 3.53X.
For the current fiscal year, covering experts anticipate revenue to land at $2.75 billion. That’s up 16.7% from last year’s print of $2.36 billion. In the following year, the top line could jump to $3.22 billion, up 17% from projected 2024 sales.
Payoneer editorial. Illustrative photo for news about Payoneer - an American financial services company.
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Working under the infrastructure software space, Payoneer (NASDAQ:PAYO) operates as a financial technology company. It operates a payment infrastructure platform that provides customers with a one-stop, global, multi-currency account to serve their accounts receivable and accounts payable needs. Given the penchant for credit-card use, PAYO could be an intriguing idea for cheap tech stocks.
Notably, the company features a 27.5% three-year revenue growth rate. That’s up 83.74% of the competition. Further, PAYO appears undervalued relative to certain metrics. Right now, shares trade at only 20.21X trailing-year earnings, below the sector median 26.3X. Also, PAYO is priced at 16.82X free cash flow.
For the current fiscal year, covering experts believe sales could rise to $882.83 million. That’s up 6.2% from last year’s print of $831.1 million. Also, in fiscal 2025, the company could post revenue of $968.18 million, up almost 10% against projected 2024 sales.
Notably, PAYO represents another unanimous strong buy with a $6.88 average price target. The high-side target lands at $9, making it a solid choice for cheap tech stocks.
Himax (HIMX)
Shipping label of a box from Himax. HIMX stock.
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A fabless semiconductor company, Himax Technologies (NASDAQ:HIMX) provides display imaging processing technologies for multiple international markets. Primarily, it offers display driver integrated circuits (ICs) and timing controllers that are used in televisions, PC monitors, laptops, mobile phones, tablets and automotive solutions, among other categories. It’s quietly relevant, making it a solid idea for cheap tech stocks.
Along with its pertinence to the broader tech ecosystem, Himax is undervalued. Presently, HIMX trades at only 17.16X trailing-year earnings. That’s below 72.27% of sector rivals. Further, it trades at only 0.94X trailing-year sales. It doesn’t get much love although the company has a history of delivering outstanding earnings performances.
For fiscal 2024, experts anticipate the company to post earnings per share of 39 cents, above last year’s print of 29 cents. Now, the average sales target calls for parity with last year’s result. However, the high-side estimate calls for $1.03 billion, up from 2023’s tally of $945.43 million.
Analysts rate HIMX a moderate buy with a $7 price target.
VTEX (VTEX)
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Another enterprise in the application software industry, VTEX (NYSE:VTEX) provides a Software-as-a-Service (SaaS) digital commerce platform for enterprise brands and retailers. Per its corporate profile, VTEX enables customers to execute their commerce strategy, including building online stores, integrating and managing orders across channels and creating marketplaces to sell products from third-party vendors. Beyond its U.S. market, it serves exciting arenas in Brazil, Argentina and Chile, among others.
Right now, the company is built for growth. Currently, its three-year sales expansion rate stands at 27.1%. That’s up more than 83% from the rest of the field. However, investors do pay a premium for this revenue growth. For example, VTEX trades at a trailing-year sales multiple of 6.75X, above the sector median 2.21X.
For fiscal 2024, experts believe that the company’s loss per share will land at 1 cent. That’s an improvement over last year’s loss of 7 cents. Also, revenue could hit $243.32 million, up 20.7% from 2023’s haul of $255.44 million.
Analysts peg VTEX as a moderate buy with a $10 price target. The high side goes up to $13, making it one of the cheap tech stocks to consider.
Stratasys (SSYS)
Stratasys (SSYS) logo on a black background
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Focused on the computer hardware segment of cheap tech stocks, Stratasys (NASDAQ:SSYS) provides connected polymer-based 3D printing solutions. According to its public profile, the company offers a range of 3D printing systems, which include polyjet printers, stereolithography printing systems and solutions for additive manufacturing, among others. Given the history of the subsector, SSYS is risky. Still, it could also attract speculators.
Operationally, Stratasys has struggled for momentum. However, the company does enjoy a solid balance sheet, with a cash-to-debt ratio of 8.71X. That’s superior to 76.55% of the competition. Also, SSYS trades at a tangible book value of 1.04X. Theoretically, that means the market only prices shares at a modest premium to the sum of its parts.
It is possible that investors could regret not jumping on SSYS when they had the chance. Yes, projected fiscal 2024 revenue of $634.98 million isn’t that great compared to last year’s result of $627.6 million. However, projected 2025 sales could hit $678.46 million, up nearly 7% from forecasted 2024 revenue.
Analysts rate SSYS a consensus strong buy with a $16.40 price target. Conspicuously, the most optimistic target calls for $23 per share.
IonQ (IONQ)
A concept image of a processor representing quantum computing. IONQ Stock. quantum computing stocks
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Operating in the computer hardware subcategory, IonQ (NYSE:IONQ) engages in the development of general-purpose quantum computing systems. Per its corporate profile, IonQ sells access to quantum computers of various qubit capacities. It integrates with multiple cloud platforms, including those provided by Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). With quantum computers poised to lead the next wave of processing innovation, IONQ is a compelling idea among cheap tech stocks.
To be fair, though, the company presents a high-risk, high-reward proposition. On the plus side, the business enjoys a stout balance sheet, with a cash-to-debt ratio of nearly 44X. That ranks higher than 88% of its rivals. On the flipside, the valuation is steep. IONQ trades at over 68X trailing-year revenue.
Nevertheless, the growth projections are enticing, leading some speculators to believe that the company could grow into its premium. Experts believe fiscal 2024 revenue could hit $38.93 million, up 76.6% from last year’s result of $22.04 million. For fiscal 2025, sales could land at $81.83 million. If so, that would be up 110.2% from projected 2024 sales.
AST SpaceMobile (ASTS)
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Falling under the communication equipment realm, AST SpaceMobile (NASDAQ:ASTS) develops and provides access to a space-based cellular broadband network for smartphones. According to its public profile, the company is perhaps best known for providing cellular broadband services to end-users who are out of terrestrial cellular coverage. Such capacity has significant industrial applications, along with broader connectivity relevancies.
As part of the wider space economy, ASTS has attracted significant attention. Nevertheless, it’s an incredibly risky proposition, with shares down almost 56% since the start of the year. It’s worth mentioning that without outstanding strengths in the balance sheet, AST is largely a narrative play.
That’s not to say that Wall Street experts refuse to numbers on the table. On the contrary, they anticipate fiscal 2024 revenue to hit $77.67 million. Last year, the company posted nothing on the top line. Not only that, the most optimistic target calls for sales of $155 million.
Finally, analysts rate ASTS stock a unanimous strong buy with an $11.13 average price target. If the stars align, we could be looking at 420% 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
