Certain changes frequently lie in plain sight in the stock market’s vast landscape, unnoticed by many yet discreetly benefiting those smart enough to see them. Here are three examples of undervalued technology stocks that quietly but considerably increased the wealth of initial investors. While giants make all the news, some businesses quietly rise to prominence and offer plenty of opportunities to individuals prepared to look past the big names.
These firms are thriving in the dynamic tech industry. They provide a stable business environment with ample room for growth. The first one is poised for organic expansion, thanks to its robust cash generation and strategic investments. The second one is making strategic moves to attract institutional investors and establish its dominance in the fintech sector. The third is leveraging new technology to boost its revenue and venture into new market segments significantly.
Notwithstanding the inherent obstacles in their particular sectors, these companies are unwavering in their pursuit of innovation, flexibility and strategic growth.
Photronics (PLAB)
In the first quarter of its fiscal year 2024, Photronics (NASDAQ:PLAB) generated $41.5 million in cash from operational operations, demonstrating the company’s strong cash-generating potential. Together with short-term investments and manageable debt, the business maintains a robust balance sheet, with a cash position of $508.5 million at the end of the quarter.
Moreover, Photronics is upbeat about the future despite obstacles, including seasonal swings and weaker markets. The business anticipates that demand patterns will persist into the second quarter, with customers moving to more advanced nodes (22nm and 28nm) to achieve better performance, especially in the Integrated Circuit (IC) market.
Furthermore, Photronics enjoys a competitive advantage in the Flat Panel Display (FPD) market because of its strong market presence and technological leadership in sophisticated active-matrix organic light-emitting diode (AMOLED) displays. These are in high demand for high-end smartphone applications.
Finally, in the first quarter of fiscal year 2024, Photronics intends to invest $43.3 million in capital expenditures to support organic growth. To sum up, the company wants to meet the expected demand in the mainstream and high-end integrated circuit sectors.
Pagaya (PGY)
Pagaya (NASDAQ:PGY) raised $6.6 billion through 15 asset-backed securitizations (ABS) in 2023 and extended its lending network with four top US lenders. The business remained the top ABS issuer for personal loans in the United States. Institutional investors find Pagaya credible and appealing, as seen by the increasing trend of partnership growth and ABS issuance. The strategic alliances lessen the risk, increase Pagaya’s financial sources, and accelerate its growth.
In addition, Pagaya expanded its range of offerings. These include online prequalification marketing packages, point-of-sale solutions, and enterprise-grade loan products. The expansion of Pagaya’s product offering shows its dedication to innovation and satisfying the changing demands of customers and financial institutions. By diversifying its product line, Pagaya can increase its income potential and competitiveness. Maintaining a competitive edge in the quickly changing fintech industry and seizing fresh market possibilities depend on this innovation.
Looking forward, network traffic may range between $9 billion and $10.5 billion for FY’24. Meanwhile, total revenue and other income are expected to be between $925 million and $1.05 billion. Lastly, with an adjusted EBITDA between $150 million and $190 million, Pagaya offered upbeat financial outlooks.
Intevac (IVAC)
Throughout FY 2023, Intevac (NASDAQ:IVAC) demonstrated notable revenue growth, with total sales rising to $52.7 million from $35.8 million in 2022, signifying a strong 47% year-over-year gain. As the Q4 sales forecasts above shows, this rise is driven by a high demand for hard disk drive (HDD) upgrades because of the acceleration of heat-assisted magnetic recording (HAMR) technology improvements.
As of December 2023, the business had an order backlog of $42.4 million, indicating a steady stream of orders for HAMR improvements. In short, this backlog provides future top-line visibility and shows ongoing demand for Intevac’s goods and services.
Additionally, at the end of 2023, the firm reported a tangible book worth $114.6 million. A robust, tangible book value gauges shareholder equity and future development potential by revealing the company’s underlying financial strength and asset base.
Overall, Intevac effectively created and qualified the TRIO platform, marking a significant technological advancement. Hence, with a $1 billion serviced market, the TRIO platform presents substantial development options outside the current HDD sector.
On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.