The NASDAQ Composite's impressive 29.5% surge over the past year and 5.5% return in 2024 highlight the technology sector's resilience and growth potential. With that in mind, robust tech stocks HP Inc. (HPQ), Proto Labs, Inc. (PRLB), and Hackett Group Inc. (HCKT) could be ideal investments this month.
The tech sector's robust growth is fueled by investments in advanced technologies for digital transformation and operational efficiency. According to Gartner, worldwide IT spending is projected to reach $5.06 trillion in 2024, an 8% increase from 2023. This growth, exceeding the previous quarter's forecast of 6.8%, positions tech spending to surpass $8 trillion well before the decade's end.
Additionally, continuous advancements in IT hardware, like faster processors and increased storage, are boosting the tech hardware sector. Moreover, global integration of 5G networks and emerging technologies such as 5G and quantum computing drive demand for electronic components.
Further, the tech sector is poised for significant growth, driven by increased spending on cloud, cybersecurity, software, and IT services, alongside continuous innovations in AI and emerging technologies, promising bright prospects for investors. With that in mind, let us deep dive into the fundamentals of the top tech stocks:
HP Inc. (HPQ)
With a market capitalization of $27.57 billion, HPQ, the titan of personal computing and digital access, revolutionizes the global landscape. With its three dynamic segments, Personal Systems, Printing, and Corporate Investments, the company engineers solutions that redefine how people work, create, and connect.
On April 25, 2024, HPQ's Next Generation Antivirus (NGAV) by HP Wolf Pro Security received a perfect score in an independent test conducted by AV-TEST, a renowned IT security research institute. Named a 'Top Product' for corporate endpoint protection, NGAV excelled in protection against malware and cyber threats, demonstrating high performance across systems, and offering a seamless user experience with minimal false alarms.
Moreover, on April 24, 2024, HPQ and Ferrari, a wholly-owned Italian subsidiary of Ferrari N.V. (RACE), unveiled a groundbreaking, multi-year partnership.
This collaboration underscores a mutual dedication to driving sustainable innovation and propelling purposeful technology forward within the realms of the Scuderia Ferrari Formula 1 team, the Scuderia Ferrari Esports team, and the Scuderia Ferrari Driver Academy.
With a four-year dividend of 3.18%, the company pays an annual dividend of $1.10, which yields 3.91% on the current market price. In the fiscal first quarter ended January 2024, the company returned $0.80 billion to shareholders through share repurchases and dividends.
In the fiscal first quarter that ended January 31, 2024, HPQ reported net revenue of $13.19 billion. The company’s non-GAAP net earnings and non-GAAP earnings from operations grew 10.5% and 5% year-over-year to $808 million and $1.11 billion, respectively. Its non-GAAP net EPS increased 11% from the prior year’s quarter to $0.81.
For the fiscal 2024 second quarter (ended April 2024), HPQ projects non-GAAP net EPS between $0.76 and $0.86. HPQ also expects to generate free cash flow between $3.10 to $3.60 billion for fiscal year 2024.
Street expects HPQ’s EPS to rise 4.6% year-over-year to $3.43 in the fiscal year ending October 2024. Its revenue is likely to reach $53.65 billion in the same year. Additionally, the company has surpassed the consensus revenue estimates in each of the trailing four quarters, which is remarkable.
Shares of HPQ have soared marginally intraday to close the last trading session at $28.18.
HPQ’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
HPQ has an A grade for Value and a B in Momentum. It is ranked #10 out of 36 stocks in the B-rated Technology – Hardware industry.
In addition to the POWR Ratings we’ve stated above, one can access HP’s Growth, Sentiment, Quality, and Stability grades here.
Proto Labs, Inc. (PRLB)
With a market cap of $794.667 million, PRLB is the go-to name in e-commerce digital manufacturing. Specializing in custom prototypes and on-demand production parts worldwide, PRLB's innovative services encompass injection molding, CNC machining, 3D printing, and sheet metal fabrication.
On May 1, PRLB showcased its impactful collaboration with BioDapt, a pioneer in designing, manufacturing, and distributing high-performance lower limb prosthetic equipment for action sports and similar demanding activities. Through its hybrid digital manufacturing model, combining digital factories with a global network of partners, PRLB positively influences the world.
During the fiscal first quarter ended March 31, 2024, PRLB’s total revenue rose 1.6% year-over-year to $127.89 million. Its non-GAAP gross profit increased 6.7% over the prior-year quarter to $56.61 million. The company’s adjusted EBITDA came in at $20.23 million, up 13.9% year-over-year.
Additionally, its non-GAAP net income and net income per share grew 32.3% and 33.3% year-over-year to $10.41 million and $0.40, respectively.
For the second quarter of 2024, the company anticipates revenue in the range of $122 million to $130 million. Additionally, it projects non-GAAP net income per share to fall between $0.30 and $0.38.
Analysts expect PRLB’s EPS and revenue to expand 6.8% and 4.1% year-over-year to $0.35 and $127.25 million in the fiscal second quarter ending June 2024. It surpassed the Street EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 9.5%, closing the last trading session at $31.09.
PRLB’s positive outlook is reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and a B for Value and Quality. It is ranked first out of five stocks in the Technology – 3D Printing industry.
To see PRLB’s Stability, Momentum, and Sentiment ratings, click here.
Hackett Group Inc. (HCKT)
HCKT, a global advisory and tech consulting firm, leads the charge in strategic innovation. With tailored Oracle and SAP solutions and a market cap of $610.74 million, it's the go-to for businesses seeking transformation. It has three segments: Global Strategy & Business Transformation; Oracle Solutions; and SAP Solutions.
On April 5, HCKT paid its shareholders its first-quarter dividend of $0.11 per share. Its annual dividend of $0.44 yields 1.99% on the current market price, compared to a four-year average dividend yield of 2.10%.
During the fiscal fourth quarter ended December 29, 2023, HCKT’s total revenues increased 3.3% year-over-year to $72.40 million. Its operating income came in at $11.48 million. Its adjusted net income per common share stood at $0.39, representing an increase of 8.3% over the prior-year quarter. In addition, the company’s adjusted net income came in at $10.83 million.
For the first quarter of 2024, HCKT expects total revenue before reimbursements to range between $72.50 million and $74 million. Additionally, adjusted EPS is projected to fall between $0.36 and $0.39.
HCKT’s revenue is estimated to improve 4.5% from the prior-year quarter to $74.43 million in the fiscal first quarter ended March 2024. Its EPS is likely to rise marginally year-over-year to $0.37 for the same quarter. It surpassed the consensus EPS and revenue estimates in each of the trailing four quarters.
The stock has returned 17% over the past year to close the last trading session at $22.14.
HCKT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It has a B grade for Stability, Sentiment, and Quality. Within the A-rated Outsourcing – Tech Services industry, it is ranked first out of nine stocks.
Click here to see HCKT’s Growth, Value, and Momentum ratings.
What To Do Next?
Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:
HPQ shares rose $0.04 (+0.14%) in premarket trading Monday. Year-to-date, HPQ has declined -5.50%, versus a 7.90% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
3 Tech Stocks Ripe for May Investment StockNews.com
