As an investor, I am as confused as the market right now.
Inflation data is coming in hot and the rate cuts have been pushed. Furthermore, the market can’t decide whether to rejoice in strong earnings or pull back due to inflation. 2024 started on a high note with both S&P 500 and Nasdaq hitting new highs. However, the past few weeks haven’t been the same. The tech earnings week managed to provide relief. And since several companies are yet to report results, we could see an improvement in the market movement.
Some of the most popular stocks are already trading at a premium. But, to take home big profits, you need to dive into the pool of stocks in search of little-known companies with strong upside potential. Many times, these small companies work in some of the biggest areas of the economy, producing steady earnings growth. They aren’t the most popular or exciting. Hence, they get little attention.
With that in mind, let’s take a look at the three undervalued stocks that can generate big profits for you.
Appian (APPN)
A tech company, Appian (NASDAQ:APPN) works in the software infrastructure segment and helps automate business processes. It builds a ‘low-code’ platform that connects data from different sources. Then, it is offered to companies in the U.S. and across the globe. As a software tech company, it offers data mining, artificial intelligence (AI) and automation processes which also makes it an AI stock.
In Q4 results, the company beat expectations and reported , up 26%. And the overall revenue was up 16% to hit $145.3 million. Also, it reported an adjusted profit per share of 6 cents. That is much better than the loss reported in the same period the previous year.
Further, Appian highlighted the fastest net retention rate growth which stood at an impressive 119%. This means the current customers increased their spending with Appian in the quarter. Set to report Q1 results on May 2, it is looking at a , higher than the consensus.
Since the beginning of the year, APPN stock is up 9% and is trading for $38 today. In February 2021, the stock was trading as high as $226 but has dropped over the years. However, its recent performance shows that the company has the potential to keep moving upward.
For the , the company expects a 20% increase in cloud revenue growth and a 13% rise in total revenue growth. Also, management aims to report a positive EBITDA by 2025. If the company integrates AI efficiently and leverages its products well, we could see it report higher revenue growth.
NetApp (NTAP)
Another technology company, NetApp (NASDAQ:NTAP) provides cloud computing and data storage services to its customers. One of the most undervalued stocks, NTAP is up 18% year-to-date (YTD) and 60% in the past 12 months. The stock has been flying under the radar for a while now and is exchanging hands for $102.
In the , the company reported sales of $1.46 billion and the net revenue stood at $1.61 billion. The management lifted the annual profit forecast after a successful quarter and expects a full-year adjusted profit between $6.40 and $6.50. For the fourth quarter, it aims for net revenue between $1.59 billion and $1.74 billion.
Another reason to buy the stock is its dividend yield of 1.95% which is much better than several tech companies that either pay no dividends or have a yield lower than 1%. Based on 15 covering NetApp stock, three have a buy rating while 10 have a hold rating with an average price target of $103.
The stock has been on a rally since March, and strong quarterly results could give it a boost. The company is set to report results on May 30.
Pure Storage (PSTG)
Up 50% since the beginning of the year and 127% over the past 12 months, Pure Storage (NASDAQ:PSTG), is quietly moving upward. Trading at $51 today, it looks undervalued to me while it is inching closer to the 52-week high of $58. Pure Storage is another tech company that develops data storage hardware and software.
The company focuses on flash memory-based server storage solutions and has seen high growth in recurring subscription revenues. Many investors seemed disappointed with the surge in subscription revenue instead of seeing an improvement in the larger upfront payments.
However, the company turned things around with a strong outlook for fiscal 2025. It managed to beat estimates despite a 3% year-over-year (YOY) drop in the revenue, standing at . The net income came in at 50 cents per share. The management is guiding for a double-digit percentage rate improvement in the revenue and operating income.
While Pure Storage isn’t one of the fastest or hottest AI stocks around, it has potential to generate solid gains. If the current rally continues, we could see it hit record highs. Earlier in March, initiated coverage on the stock with a buy rating and a price target of $65.
On the date of publication, Vandita Jadeja did not hold (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 香港六合彩玄机.com Publishing Guidelines.
