Businesses worldwide increasingly adopt advanced tech solutions to streamline processes, automate repetitive tasks, and lower operational costs. Rapid digital transformation among enterprises includes using AI and machine learning for data analysis, robotics for manufacturing and logistics, and cloud computing for scalable IT infrastructure.
Considering the industry’s solid foothold, it could be wise to invest in fundamentally sound tech stocks Jabil Inc. (JBL), Materialise NV (MTLS), and Issuer Direct Corporation (ISDR) in May for potential gains.
Amid growing digitalization efforts, the tech spending will likely remain robust this year and beyond. According to Gartner's forecast, worldwide IT spending is expected to increase 8% year-over-year to $5.06 trillion in 2024, driven by rising genAI initiatives. Also, spending on IT services is anticipated to reach $1.52 trillion, up 9.7% from the last year.
The IT services market is estimated to total $1.20 trillion in 2024 and is poised to reach $1.81 trillion by 2029, expanding at a CAGR of 8.4% during the forecast period (2024-2029). Steady IT spending, widespread adoption of SaaS, increased cloud-based offerings, and trends like AI, IoT, 5G, and blockchain will likely fuel the market’s growth.
Furthermore, rapid advancements in printing technologies, supply chain optimization, customization, and the rise of digital literacy are increasing the adoption of 3D printing and propelling the growth of the global 3D printing market. The market is expected to expand at a CAGR of 15.5%, resulting in a volume of $23.41 billion by 2031.
Given the industry’s solid growth outlook, investing in fundamentally strong tech stocks such as JBL, MTLS, and ISDR could be wise for future gains.
Let’s discuss the fundamentals of these stocks in detail:
Jabil Inc. (JBL)
JBL offers manufacturing services and solutions globally. The company operates in two segments: Electronics Manufacturing Services and Diversified Manufacturing Services. It provides electronics design, production, and product management services alongside electronic circuit design services.
On April 17, JBL’s Board of Directors declared a quarterly dividend of $0.08 per share of common stock to shareholders of record as of May 15, 2024. The dividend is payable on June 4, 2024. JBL has paid consecutive quarterly cash dividends since May 15, 2006.
JBL pays an annual dividend of $0.32, which translates to a yield of 0.27% at the current share price. Its four-year average dividend yield is 0.54%.
On March 25, JBL and MaxLinear announced the production availability of a family of 800G silicon photonics-based optical transceiver modules aimed at enabling the AI/ML revolution. The strategic collaboration offers leading-edge interconnects and a unique supply chain for the growing AI/ML 800G optical transceiver market.
On March 20, JBL and OpenLight entered a strategic partnership to streamline and facilitate a back-end manufacturing ecosystem for Photonic Integrated Circuits (PICs). The collaboration fast-tracks the manufacturing and delivery of integrated PICs, putting JBL and OpenLight at the forefront of revolutionizing the silicon photonics manufacturing landscape.
During the second quarter that ended February 29, 2024, JBL reported net revenue of $6.77 billion, and its gross profit was $630 million. Its operating income increased 215% from the year-ago value to $1.13 billion. Net income attributable to JBL and EPS came in at $927 million and $7.31, increases of 347.8% and 380.9% from the prior year’s quarter, respectively.
Furthermore, during the six months ended February 29, 2024, adjusted free cash flow increased 97.3% year-over-year to $221 million.
As per the fiscal 2024 third-quarter outlook, JBL expects its net revenue to be between $6.20 billion and $6.80 billion, and its core operating income is expected to range from $325 million to $385 million. Also, the company's non-GAAP EPS is expected to be $1.65 to $2.05.
Street expects JBL’s revenue and EPS for the fiscal year (ending August 2025) to increase 4% and 25.5% year-over-year to $29.65 billion and $10.50, respectively. Furthermore, the company has topped the consensus EPS estimates in three of the trailing four quarters, which is impressive.
Over the past year, JBL’s stock has surged 49.8% to close the last trading session at $117.43.
JBL’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.
JBL has an A grade for Momentum and a B for Value and Quality. It is ranked #18 out of 78 stocks in the Technology - Services industry.
In addition to the POWR Ratings we’ve stated above, we also have JBL’s ratings for Growth, Sentiment, and Stability. Get all JBL ratings here.
Materialise NV (MTLS)
Headquartered in Leuven, Belgium, MTLS provides additive manufacturing medical software and 3D printing services internationally. It operates through three segments: Materialise Software; Materialise Medical; and Materialise Manufacturing.
On May 2, MTLS and Endeavor 3D entered a strategic relationship where Endeavor 3D will leverage MTLS’ CO-AM Software Platform to bolster its HP 3D printer production capacity. The relationship marks a significant milestone in Endeavor 3D's commitment to cater to the growing demand for industrial volume production with 3D printing.
On April 19, MTLS launched Mimics Enlight CMF, a 3D planning software that enhances in-house planning for surgical applications through increased automation and enhanced accuracy capabilities. Mimics Enlight CMF provides a comprehensive and user-friendly preoperative 3D planning solution.
The software also allows real-time updates to align with evolving surgical needs, offering robust and efficient planning capabilities that empower surgeons and medical teams to deliver personalized outcomes to more patients.
Also, on April 15, MTLS and Renishaw announced a partnership to increase efficiency and productivity for manufacturers using Renishaw's additive manufacturing (AM) systems. Renishaw system users will benefit from MTLS' next-generation build processor software tailored to the RenAM 500 series of metal AM systems.
Renishaw’s innovative scanning algorithms and MTLS’ accelerated build processors shorten production time and enable a unique approach to efficient metal 3D printing.
For the first quarter that ended March 31, 2024, MTLS posted revenue of $68.80 million, and its gross profit for the quarter was $38.85 million. Its net profit for the period and EPS came in at $3.87 million and $0.07, respectively.
In addition, as of March 31, 2024, the company’s cash and cash equivalents and total assets totaled €128.90 million ($138.74 million) and €394.24 million ($424.33 million), respectively.
Analysts expect MTLS’ revenue for the fourth quarter (ending December 2024) to grow 10.1% year-over-year to $77.82 million, and its EPS for the same period is expected to increase 176% year-over-year to $0.06.
Shares of MTLS have gained marginally over the past month to close the last trading session at $5.30.
MTLS’ sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has an A grade for Value and Sentiment. It also has a B grade for Stability. Within the Technology – 3D Printing industry, MTLS is ranked #2 of 5 stocks.
Click here to access additional ratings of MTLS for Momentum, Growth, and Quality.
Issuer Direct Corporation (ISDR)
ISDR is a communications and compliance company that offers solutions for both public relations and investor relations professionals internationally. Through a media advantage platform, it provides press release distribution, media databases, media monitoring, and newsrooms.
On March 25, ISDR’s ACCESSWIRE brand launched its new Media Suite, an all-in-one solution for media engagement. The platform enables public relations professionals to engage media, pitch journalists, monitor brands, incorporate a branded media room, and share news through its press release distribution services with a single login.
ACCESSWIRE has created an innovative solution to address real-world challenges and meets and exceeds consumer needs.
On February 20, ISDR partnered with ASTA-USA Translation Services, a specialized language services provider, to expand its language translation offerings. With ASTA-USA's expertise in accurately translating written materials from one language into other languages and vast experience, ISDR will offer translation services that customers can trust.
ISDR’s revenues increased 5.6% year-over-year to $7.54 million during the fourth quarter, which ended December 31, 2023. The company’s gross profit grew 5.9% from the year-ago value to $5.57 million. Its non-GAAP net income was $575 thousand, or $0.15 per share, respectively.
In addition, the company’s adjusted EBITDA increased 4.9% year-over-year to $1.07 million. Its cash and cash equivalents stood at $5.71 million as of December 31, 2023, compared to $4.83 million as of December 31, 2022.
Street expects ISDR’s revenue for the first quarter (ended March 2024) to increase marginally year-over-year to $8.63 million. Similarly, for the fiscal year 2024, the company’s revenue is expected to grow 3.7% year-over-year to $34.61 million.
Shares of ISDR have plunged 9.2% over the past month to close the last trading session at $11.25.
ISDR’s POWR Ratings reflect its 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 Sentiment and a B for Value. ISDR is ranked #23 of 82 stocks in the Technology - Services industry.
Click here to access additional ratings of ISDR for Momentum, Growth, Quality, and Stability.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
JBL shares were unchanged in premarket trading Wednesday. Year-to-date, JBL has declined -7.77%, versus a 8.79% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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