The technology industry’s prospects are robust, owing to the consistent innovations and advancements, offering enhanced efficiency and productivity. Companies are increasingly investing in exploring the potential of technologies like AI and cloud-based solutions, which favorably position the market for growth.
Amid this backdrop, investors could consider investing in fundamentally sound tech stocks HP Inc. (HPQ), Jabil Inc. (JBL), and Photronics, Inc. (PLAB) with low PE ratios.
Technology is evolving at an accelerating pace, revolutionizing various industries and operations and enhancing products and services. Every now and then, new advancements are introduced to cater to the shifting consumer demands and requirements as consumers want the latest technologies for their work, houses, convenience, and lifestyles.
Technologies like generative AI, robotics, Artificial Intelligence (AI), cloud computing, IoT tech services, and virtual and augmented reality are some of the advances that have significantly impacted modern world. Companies are further investing in technology for the future. Gartner projects worldwide IT spending to total $5.74 trillion in 2025, up 9.3% from 2024.
With this, the generative AI market is projected to reach $36.06 billion in 2024. The market is expected to grow to $356.10 billion by 2030 at a CAGR of 46.5%. In global comparison, the United States market is expected to be the largest market, with $11.66 billion in 2024.
Trends including AI for scientific discoveries, privacy-focused technologies, RPAs, blockchain, integrated sensing and communication, and genomics for transplants are contributing to the growth and will shape the market’s future expansion.
Therefore, with the technology industry poised for continued growth, investors could lean towards tech stocks with low P/E ratios to benefit from the wave of tech revolutions. So, let us delve deeper into the stocks mentioned above.
HP Inc. (HPQ)
HPQ is an international technology company that offers personal computing and other digital access devices, imaging and printing products, and related technologies, solutions, and services. It operates across three segments: Personal Systems; Printing; and Corporate Investments.
In terms of forward non-GAAP P/E, HPQ’s 10.18x is 60.6% lower than the industry average of 25.80x. Similarly, the stock’s forward EV/EBITDA multiple of 7.81 is 50% lower than the 15.60 industry average. Further, its forward Price/Sales of 0.64x is 80.3% lower than the industry average of 3.24x.
On October 30, HPQ announced a new HP Amplify program for partners, HP Amplify AI. It is a customizable program designed to enhance partner capabilities in achieving positive AI outcomes, offering AI guidance, tools, resources, training, and certification.
The company also announced other enhancements, which included new AI-powered tools, refreshed HP Future Ready AI MasterClass content in multiple languages, and global expansion of the HP Business Partner Program.
On September 25, HPQ acquired Vyopta, an Austin-based provider of collaboration management solutions. The acquisition brought extensive expertise and infrastructure to turbocharge the development of HPQ’s workforce experience platform and offer more insights and capabilities to customers.
During the fourth quarter that ended October 31, 2024, HPQ’s total net revenue rose 4% from the prior quarter to $14.06 billion. The company’s non-GAAP earnings from operations of $1.20 billion indicate growth of 10.2% from the quarter-ago value.
Furthermore, the company’s non-GAAP net earnings came in at $900 million or 0.93 per share, up 9.9% and 12% quarter-on-quarter, respectively.
For the fiscal 2025 first quarter, HPQ projects non-GAAP net EPS to be in the range of $0.70 to $0.76. For the full fiscal 2025, the company expects non-GAAP net EPS between $3.45 and $3.75.
Analysts expect HPQ’s revenue for the second quarter (ending April 2025) to increase 1.9% year-over-year to $13.05 billion, while the company’s EPS for the same quarter is expected to grow 4.2% year-over-year to $0.85. Also, HPQ topped the consensus revenue estimates in three of the trailing four quarters.
Shares of HPQ have surged 3.2% over the past six months and 25.5% over the past year to close the last trading session at $36.45.
HPQ’s solid outlook is reflected in its POWR Ratings. 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, each weighted to an optimal degree.
HPQ has a B grade for Value, Momentum, and Quality. Within the B-rated Technology - Hardware industry, HPQ is ranked #8 out of 40 stocks.
Click here to access additional HPQ ratings for Sentiment, Growth, and Stability.
Jabil Inc. (JBL)
JBL provides 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, and electronic circuit design services.
JBL’s forward non-GAAP P/E of 15.55x is 39.7% lower than the 25.80x industry average. Similarly, the stock’s forward Price/Sales and Price/Book of 0.56x and 8.80x are considerably lower than the respective industry averages of 3.24x and 4.60x.
On November 14, JBL signed a MoU with the Gujarat state government, which took place in Gandhinagar in the presence of Gujarat Chief Minister Bhupendra Patel. The agreement follows a MoU signing with the Tamil Nadu state in September 2024. The MoUs reflect JBL's intentions to expand its footprint in India and explore long-term goals and opportunities.
Also, on November 12, JBL and Cyferd Inc., a pioneering AI company specializing in data technology, announced a joint venture, ID8 Global. The joint venture is aimed at introducing a generative AI-driven, autonomous supply chain, and procurement software platform to transform how industries manage complex logistics, procurement, and operations globally.
JBL reported net revenue of $28.88 billion for the fiscal year ended August 31, 2024 and its gross profit was $2.68 billion for the same year. The company’s operating income grew 31% from the year-ago value to $2.01 billion. Also, the company’s adjusted free cash flow rose 2.8% year-over-year to $1.06 billion.
Furthermore, net income and EPS attributable to JBL amounted to $1.39 billion and $11.17, reflecting increases of 69.7% and 85.5% from the prior year, respectively.
As per the first quarter fiscal 2025 outlook, JBL expects net revenue of $6.30 billion to $6.90 billion, and its core operating income is expected to be $304 million to $364 million. Also, its core earnings per share is set at $1.65 - $2.05.
For the full fiscal 2025, the company projects a net revenue of $27 billion, and core EPS is expected to be $8.65. Its adjusted free cash flow is forecasted at $1.20 billion.
Analysts expect JBL’s revenue and EPS for the third quarter (ending May 2025) to increase 0.7% and 20.1% year-over-year to $6.81 billion and $2.27, respectively. Moreover, the company topped the consensus EPS and revenue estimates in three of the trailing four quarters.
Shares of JBL have gained 15.3% over the past six months and 17.2% over the past year to close the last trading session at $135.19.
JBL’s sound 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.
The stock has an A grade for Momentum. It also has a B grade for Value, Growth, Quality, and Sentiment. Within the B-rated Technology - Services industry, JBL is ranked #5 of 78 stocks.
Click here to access all ratings of JBL.
Photronics, Inc. (PLAB)
PLAB is engaged in the manufacture and sale of photomask products and services internationally. The company offers photomasks that are used in the manufacture of integrated circuits and flat panel displays (FPDs) and to transfer circuit patterns onto semiconductor wafers and FDP substrates.
In terms of forward non-GAAP P/E, PLAB is trading at 12.18x, 52.8% lower than the industry average of 25.80x. Also, the stock’s forward EV/EBIT multiple of 6.14 is 71.8% lower than the industry average of 21.73. Further, its forward Price/Sales of 1.86x is 42.6% lower than the industry average of 3.24x.
During the third quarter that ended July 28, 2024, PLAB reported revenue of $210.98 million, and its gross profit came in at $75.14 million. Also, net income attributable to PLAB was $34.39 million, up 27.6% year-over-year. The company’s EPS grew 25% from the year-ago value to $0.55.
In addition, as of July 28, 2024, the company’s cash and cash equivalents stood at $537.33 million, compared to $499.29 million as of October 31, 2023.
According to the company’s guidance for the fourth quarter of fiscal 2024, PLAB expects revenue between $213 million and $221 million. Also, it projects non-GAAP net income attributable to PLAB shareholders to range from $0.48 to $0.54 per share.
Street expects PLAB’s revenue for the second quarter (ending April 2025) to grow 6% year-over-year to $230 million and its EPS is expected to grow 15.2% year-over-year to $0.53 for the same quarter. For the fiscal year (ending October 2025), the company’s revenue and EPS are expected to increase 9% and 5.8% from the prior year to $940 million and $2.20, respectively.
Over the past month, PLAB’s stock has surged 8.4% and 20.9% over the past year to close the last trading session at $25.34.
PLAB’s POWR Ratings reflect its bright prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
PLAB has a B grade for Value and Quality. It is ranked #3 out of 90 stocks in the Semiconductor & Wireless Chip industry.
In addition to the POWR Ratings we’ve stated above, we also have PLAB’s other ratings for Momentum, Stability, Sentiment, and Growth. Get all PLAB ratings here.
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HPQ shares were trading at $36.71 per share on Tuesday afternoon, up $0.26 (+0.71%). Year-to-date, HPQ has gained 25.08%, versus a 28.02% 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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