U.S. tech stocks have been foundering lately amid concerns about the Fed's aggressive interest rate hikes, surging inflation, and rising U.S. Treasury yields. However, the heightened demand from consumer and commercial segments is expected to drive growth in the tech industry. The major trends benefiting the tech industry include automation, Industrial Internet of Things (IIoT), artificial intelligence (AI), cloud computing, and data analytics, among others. By 2025, more than 50 billion devices are expected to be connected to IIoT. In addition, the annual installations of industrial robots are projected to reach 600,000 by 2022.
Furthermore, worldwide tech spending is expected to hit $4.4 trillion in 2022, representing an increase of 4% year-over-year, based on the latest report by Gartner, Inc (IT). And according to a report by The Business Research Company, the global information technology market is projected to reach $9.33 trillion in 2022 and $13.82 trillion by 2026, growing at a CAGR of 10.3%.
Against this backdrop, Wall Street analysts expect quality tech stocks VIZIO Holding Corp. (VZIO), LiveVox Holding, Inc. (LVOX), and Core Scientific, Inc. (CORZ) to rally in price in the coming months.
VIZIO Holding Corp. (VZIO)
VZIO in Irvine, Calif., provides smart televisions, soundbars, and accessories in the U.S. The company operates Platform+, which comprises SmartCast, a Smart TV operating system that enables home entertainment solutions, data intelligence, and services products through Inscape. In addition, it offers support for third-party voice platforms and second-screen viewing. VZIO sells its products to retailers and through online channels.
On April 20, VZIO expanded the WatchFree+ library with TV shows and movies from more than 17 studios on VZIO's free streaming service. WatchFree+ offers more than 5,000 ad-supported titles and 240 free streaming channels. This is expected to broaden the company's content offering, extend its customer reach, and boost revenues.
On March 31, VZIO introduced a beta program for a new cross-platform viewing solution, Jump Ads, designed to connect Linear TV with streaming services. Jump Ads simplify content discovery and navigation. It creates more engaging and interactive viewing experiences for customers. This launch might boost the company's profitability.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, VZIO's revenue from Platform+ increased 74.3% year-over-year to $105.10 million, while its gross profit from Platform+ grew 39.3% from the prior-year period to $67.30 million. The company's cash and cash equivalents rose 59.7% year-over-year to $331.60 million for its fiscal year 2021 (ended December 31). Its total current assets increased 22.5% from the prior year to $834.70 million.
Analysts expect VZIO's revenue for its fiscal year 2022 second quarter, ending June 30, 2022, to come in at $461.58 million, representing a 15.1% rise year-over-year. The company has an impressive revenue surprise history; it has surpassed the consensus revenue estimates in three of the trailing four quarters. The Street expects the company's EPS for the current quarter to increase 37.5% year-over-year.
VZIO shares have declined 23.4% in price over the past month and closed yesterday's trading session at $7.20. However, the 12-month median price target of $15.50 indicates a 115.3% potential upside. The price targets range from a low of $12.00 to a high of $21.00. Among the six Wall Street analysts that rated VZIO, five rated it Buy, while one rated it Hold.
LiveVox Holding, Inc. (LVOX)
LVOX develops and markets a cloud-based contact-center-as-a-service customer engagement platform in the U.S. The San Francisco company's products include Contact Manager and Extract, Transform, and Load Tools, U-CRM, a visual layer that provides relevant customer details to agents, U-Ticket that creates and supports tickets, and U-Script, a visual agent flow tool. It also offers inbound voice services and outbound voice applications.
Last week, LVOX was selected by Credit First National Association (CFNA), the consumer credit division of Bridgestone Americas, to deliver data-driven experiences for CFNA's contact center customers. LVOX will accelerate CFNA's customer experience transformation with the strategic implementation of 16 leading-edge applications. This partnership might boost the company's revenues.
In April, LVOX launched a new channel program, ACTivate. This program provides its new and existing partners, including master agents, solution providers, technology solution brokerages, and managed service providers, with tools to market and sell LVOX's blended omnichannel capabilities to customers. This is expected to increase the company's market reach and boost its growth.
LVOX's revenue has increased 13.3% year-over-year to $31.87 million in its fiscal 2021 fourth quarter, ended Dec. 31, 2021. For its fiscal year 2021, ended Dec. 31, 2022, its cash and cash equivalents rose 160.9% year-over-year to $47.22 million, while total current assets increased 121.6% from the previous year to $83.51 million.
The $169.11 million consensus revenue estimate for its fiscal year 2022 represents 18% growth year-over-year. The Street expects the company's EPS for its fiscal 2023 to increase 28.8% year-over-year.
The stock has gained marginally over the past month and closed yesterday's trading session at $3.15.
Among the three Wall Street analysts that rated LVOX, two rated it Buy, while one rated it Hold. The 12-month median price target of $7.00 indicates a 122.2% potential upside. The price targets range from a low of $4.00 to a high of $9.00.
Core Scientific, Inc. (CORZ)
Austin, Tex.-based CORZ provides net carbon-neutral blockchain infrastructure and digital asset mining solutions in North America. The company operates through two segments: Equipment Sales; and Hosting. It offers blockchain hosting services, infrastructure management, and custom firmware through proprietary software platforms like Minder and MinderOS.
"In March we self-mined 1,143 bitcoins, not only representing our largest monthly bitcoin production to date, but also the largest monthly production by any U.S.-based, publicly traded bitcoin mining company. The more than 3,000 bitcoins we have mined in 2022 put us on a record pace for yearly bitcoin mining results and for continued shareholder value creation," stated Mike Levitt, CORZ's Chief Executive Officer.
For its fiscal year ended Dec. 31, 2021, CORZ's total revenue increased 802.7% year-over-year to $544.48 million, while its gross profit improved 2,443.2% from the prior year to $238.86 million. The company's operating income rose 2,178.3% year-over-year to $131.49 million. Its adjusted EBITDA increased 3,848.8% year-over-year to $238.94 million. In addition, its net income and net income per share came in at $47.31 million and $0.32, respectively, registering an increase of 487.6% and 239.1% from the last year.
Analysts expect CORZ's revenue for its fiscal year 2022 to come in at $1.05 billion, representing a 93% rise year-over-year increase. Street expects the company's EPS for the current year to increase 24% year-over-year to $0.78.
CORZ stock has plunged 28.3% year-to-date. However, the 12-month median price target of $17.33 indicates a 174.6% potential upside from yesterday's closing price of $6.31. The price targets range from a low of $16.00 to a high of $18.00. Each of the three Wall Street analysts that rated CORZ rated it Buy.
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VZIO shares were trading at $7.30 per share on Tuesday afternoon, up $0.10 (+1.39%). Year-to-date, VZIO has declined -62.43%, versus a -10.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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