Markets have been in turmoil for much of the year, leaving investors bleak about forward performance. Economic challenges, such as soaring inflation, aggressive interest rate hikes, and geopolitical tensions, have been a continuous headache for many investors. Nonetheless, this article will highlight three tech stocks to consider: TENB, ANET, and ENPH.
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Generally, investors tend to enjoy the high-paced performance of technology and software stocks because widespread consumer and business adoption tend to keep stock prices elevated. However, the NASDAQ 100 (NDX) index, which is often used by investors and economists as a barometer of the tech and software industry, is already down 28.5% this year.
Throughout this year, tech giants have seen economic headwinds now playing on their top-line performance, causing many to make financial adjustments to deliver positive earnings in the hopes of capturing better investor interest. As part of their financial-adjustment strategies, tech companies have been slashing jobs and freezing new hires.
Estimates from Crunchbase suggest that some 44,000 tech industry jobs have been lost this year at a time when U.S. unemployment claims have been at a near-decade high.
Some of the biggest names in tech, including Tesla (NASDAQ: TSLA), Netflix (NASDAQ: NFLX), TikTok, Twitter (NYSE: TWTR), and more recently, SoundCloud, among others, have cut jobs this year. The ongoing layoffs paint a grim picture of the slowing performance the tech industry is currently experiencing.
Amid uncertainty, and with big tech earnings season kicking off, investors are feeling skeptical about some of their favorite contenders as these tumultuous economic and market conditions have been a persistent challenge for many to stay positive and vested.
Despite the high level of uncertainty against the backdrop of a looming recession, some under-the-radar tech companies remain popular despite bearish sentiment.
Perhaps looking at the market from a different angle and digging a bit deeper could help pull away the tarp that’s been hiding tech stocks that can still be a healthy addition to any investor’s portfolio. Let’s have a look.
Tenable Holdings (NASDAQ: TENB)
This year has presented itself with a lot of challenges, yet instead of laying down, Tenable has steadily held its position as one of the best-known names for threat-detection tools and vulnerability management services.
Regular customer spending and growing interest in its services have seen Tenable software being deployed by thousands of businesses and reaching more than two million downloads this year.
While many other big tech names have been making adjustments and cutting back on their full-year guidance, Tenable is keeping strong that it could hit revenue of $678.6 to $680.6 million in 2022, which represents 25.6% growth at the midpoint compared to last year.
Q3 earnings showed that the company is increasing its number of customers dishing out at least $100,000 annually on Tenable products and services as interest and widespread adoption of their technologies are growing fast.
Is TENB Stock a Buy, According to Analysts?
TipRanks has ranked Tenable a “Strong Buy” based on 10 Buys and two Holds assigned by analysts in the past three months. The average TENB stock price target of $47.83 implies 39.7% upside potential.
Arista Networks (NYSE: ANET)
Cloud-computing networks have enjoyed steady growth over the last couple of years, mostly due part to the ongoing adoption from organizations and consumers as more users look to move to the digital cloud for security and storage purposes.
Arista Networks designs cloud network solutions, and most of its products are already being used in the Americas, Africa, Asia-Pacific, and the Middle East.
This year has shown Arista rebounding after enduring a slow performance. Year-over-year revenue jumped by 48.7% compared to the same period in June last year.
For 2022, experts estimate that revenue will grow by 38%, while earnings could see a 40% jump. The positive ratings come as the company has posted three-quarters of positive earnings growth while sales have risen during the same time.
At the same time, earnings per share (EPS) are also up by more than 58% for the same recorded period. Steadily riding out economic strides has left the company with a healthy-looking balance sheet, while analysts are mostly bullish.
Is ANET Stock a Buy, According to Analysts?
TipRanks has ranked ANET stock a “Moderate Buy” based on 10 Buys, six Holds, and one Sell rating assigned by analysts in the past three months. The average ANET stock price target of $141.06 implies 25.2% upside potential.
Enphase Energy (NASDAQ: ENPH)
Across developed consumer markets in the Americas and Europe, people are quickly becoming more determined in their sustainability and environmental efforts. These efforts, which have now spilled over into other nations worldwide, give Enphase Energy a strong foothold to stand on.
During its Q3 earnings report, Enphase Energy reported higher-than-expected figures, surpassing Wall Street’s expectations. Year-over-year revenue jumped by 80.56%, going from $351.5 million to ~$634.7 million.
Consumer interest in its self-sustaining solar-powered products has seen positive growth in the European market as more households look to wane down on fossil fuel-generated energy.
On the stock front, the last contender on our list has fared relatively well compared to other tech stocks. So far, year-to-date performance has jumped by more than 45%, with the company earning $175.5 million, or $1.25 per share, in Q2, which was better than the recorded performance for 2021 of $84.2 million, or $0.60 per share.
Growing market interest against the backdrop of soaring energy prices and natural gas shortages in regions such as Europe leaves the company in a comfortable space for growth. Looking forward, we could see the company faring somewhat better than other major tech companies in the same sector.
Is ENPH Stock a Buy, According to Analysts?
TipRanks has ranked Enphase a “Strong Buy” based on 12 Buys and four Hold ratings assigned by analysts in the past three months. The average ENPH stock price target of $289.64 implies 9.06% upside potential.
Conclusion: Look Into These Lesser-Known Tech Stocks
Investors that are scrambling across the market due to the ongoing volatility should keep in mind their long-term strategies as guidance, going forward. While market performance has been shocking, at best, it’s a good time to diversify and look into lesser-known tech stocks that can hold out against market downturns while also being able to ride out greater economic challenges.
