The increasing availability of the internet worldwide has enabled the creation of new digital markets, products, and services. More people are connected than ever before, allowing businesses to reach larger global audiences.
Thus, investors could consider adding fundamentally sound tech stocks Accenture plc (ACN), Jabil Inc. (JBL), and Progress Software Corporation (PRGS), which are set for big moves after their earnings.
Companies are actively seeking automation solutions to boost productivity and streamline processes. This strategic focus on efficiency is a key driver behind the increased demand for IT services in automation.
Moreover, companies are concentrating increasingly on digital transformation projects, which call for IT services for security solutions, software deployment, and infrastructure upgrades. For instance, the software market is expected to grow at a 5.3% CAGR from 2024 to 2028, reaching $858.10 billion.
Considering these factors, let’s take a look at the fundamentals of the three tech stock picks.
Accenture plc (ACN)
ACN is a professional services company that provides strategy and consulting, industry X, song, and technology and operation services worldwide. The company offers application services, intelligent automation, and application management services, as well as software engineering services, strategy and consulting services.
ACN’s 1.21x trailing-12-month asset turnover ratio is 95.5% higher than the 0.62x industry average. Furthermore, the stock’s 15.46% trailing-12-month EBIT margin is 215.3% higher than the 4.90% industry average.
ACN’s revenues for the fiscal fourth quarter that ended August 31, 2024, increased 2.6% from the year-ago value to $16.41 billion. Its non-GAAP net income stood at $7.75 million, up 2.2% over the prior-year quarter. Also, its non-GAAP earnings per share grew 2.4% year-over-year to $11.95.
Analysts expect ACN’s revenue for the quarter ending November 30, 2024, to increase 6.3% year-over-year to $17.24 billion. Its EPS is expected to increase 4.6% year-over-year to $3.42 for the same quarter. The company surpassed Street EPS estimates in each of the trailing four quarters, which is impressive.
The stock has gained 5.3% over the past month, closing the last trading session at $362.24.
ACN’s POWR Ratings reflect its robust 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.
ACN has an A grade for Quality and a B for Sentiment and Stability. It is ranked #4 out of nine stocks in the A-rated Outsourcing - Tech Services industry.
Beyond what is stated above, we’ve also rated ACN for Growth, Momentum, and Value. Get all ACN ratings here.
Jabil Inc. (JBL)
JBL provides global manufacturing services across two segments: Electronics Manufacturing Services and Diversified Manufacturing Services. The company specializes in electronics design, production, product management, circuit design, firmware development, prototyping, and the design of plastic and metal enclosures with integrated electro-mechanical components like PCBA.
On October 3, 2024, JBL announced the successful acquisition of Mikros Technologies LLC, a leader in the engineering and manufacturing of liquid cooling solutions for thermal management.
This acquisition will provide JBL with critical capabilities to help its customers manage the intense thermal requirements of their current and next-generation products while keeping sustainability and cost considerations at the forefront.
JBL’s 1.57x trailing-12-month asset turnover ratio is 153.5% higher than the 0.62x industry average. Furthermore, the stock’s 4.98% trailing-12-month EBIT margin is 1.5% higher than the 4.90% industry average.
JBL’s net revenue for the second quarter ended August 31, 2024, stood at $6.96 billion. The company’s gross profit stood at $633 million. Its non-GAAP core earnings stood at $270 million, and core earnings per share were reported at $2.30.
Street expects JBL’s revenue to increase 6.3% year-over-year to $28.74 billion for the year ending August 2026. The company’s EPS for the same quarter is expected to increase 15.7% year-over-year to $10.06. Also, JBL surpassed the consensus revenue and EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 10.5% over the past three months to close the last trading session at $121.66.
JBL’s robust fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system.
The stock has a B grade for Growth, Value, Quality, and Momentum. JBL is ranked #15 out of 76 stocks in the Technology - Services industry.
Click here to access the additional JBL ratings (Sentiment and Stability).
Progress Software Corporation (PRGS)
PRGS develops, deploys, and manages business applications internationally. The company offers OpenEdge, Chef, Developer Tools, Kemp LoadMaster, Sitefinity, MOVEit, DataDirect, WhatsUp Gold, Flowmon, Corticon, MarkLogic, and Semaphore.
PRGS’s 19.55% trailing-12-month EBIT margin is 298.8% higher than the 4.90% industry average. Furthermore, the stock’s 86.28% trailing-12-month gross profit margin is 73.6% higher than the 49.71% industry average.
PRGS’ revenue for the fiscal third quarter ended August 31, 2024, grew 2% year-over-year to $178.69 million. Its non-GAAP net income and non-GAAP EPS came in at $55.22 million and $1.26, representing increases of 13.3% and 4% year-over-year, respectively.
Street expects PRGS’ EPS and revenue for the quarter ending November 2024 to increase 20.2% and 179% year-over-year to $1.23 and $209.36 million, respectively. It surpassed Street revenue and EPS estimates in each of the trailing four quarters.
The stock gained 13.9% over the past month, closing the last trading session at $66.29.
PRGS’ POWR Ratings reflect bright prospects. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
The stock has an A grade for Quality and a B for Value. PRGS is ranked #11 in the Software - Application industry.
In addition to the POWR Ratings highlighted above, one can access PRGS’ ratings (Growth, Momentum, Stability, and Sentiment) here.
What To Do Next?
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ACN shares were trading at $357.31 per share on Monday afternoon, down $4.93 (-1.36%). Year-to-date, ACN has gained 3.04%, versus a 20.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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