The tech sector is expected to grow significantly due to the advancing digitization of industries and the high demand for tech products and solutions to adapt to ongoing remote working structures. We therefore think it makes sense to rely on the undervalued technology stocks Akamai (AKAM) and VEON (VEON). In addition, our proprietary POWR ratings system recently upgraded these stocks to “Buy”.
With the resurgence of COVID-19 cases, a delay in office reopening plans has resurrected a robust demand for secure and efficient cloud-based technical products and solutions from companies to facilitate the productivity of their remote workers.
The tech-heavy one Nasdaq Composite continues to hit record highs This is mainly due to this rapidly increasing demand and a low interest rate environment.
After an impressive performance last quarter, we hold fundamentally solid undervalued technology stocks Akamai Technologies, Inc. (AKAM) and VEON Ltd. (VEON) have the potential to grow significantly in the coming months. These two stocks were recently upgraded to Buy in our proprietary POWR ratings System.
Akamai Technologies, Inc. (AKAM)
AKAM, based in Cambridge, Massachusetts, offers cloud services for the international provision, optimization and protection of online content and business applications. The company sells its solutions through direct sales and service organizations and various channel partners.
On June 16, 2021, AKAM announced improvements to platform security to strengthen protection for web applications, APIs and user accounts. Amid rising cyber threats, AKAM’s machine learning is gaining insights into malicious activity from daily client interactions to intelligently automate threat detections, time-consuming tasks, and security logic. These extensions should ensure high demand in the coming months.
On the same day, AKAM launched its new Account Protector solution, which uses proprietary behavioral analysis and reputation heuristics to detect and prevent attacks on account takeovers in real time. As human threat actors target the valuable digital assets of consumers, AKAM’s Account Protector analyzes requests and generates risk and trust indicators to calculate the likelihood that a user is the legitimate account holder or impersonator.
AKAM revenue increased 7.3% year over year to $ 852.82 million for the second fiscal quarter ended June 30, 2021. The company’s non-GAAP income from operations was $ 269.84 million, an increase of 4.5% over the same period last year. . While non-GAAP net income rose 2.8% year over year to $ 232.75 million, non-GAAP EPS rose 2.9% to $ 1.42. AKAM had $ 581.07 million in Cash and cash equivalents As of June 30, 2021.
Analysts expect AKAM’s EPS to rise 6.1% year over year to $ 1.39 in the current quarter through September 30, 2021. It beat Street’s EPS estimates for each of the last four four quarters. Revenue in the current quarter is expected to increase by 7.5% year-on-year to USD 852.44 million. The stock’s EPS is expected to grow at an annual rate of 12% over the next five years.
On a non-GAAP forward P / E ratio, AKAM is currently trading at 20.07x, which is 19.7% below the 25x industry average. In terms of forward price / book value, AKAM is currently trading at 3.87x, which is 41.8% lower than the industry average of 6.64x. Over the past six months, the stock is up 16%, closing yesterday’s trading session at $ 112.71.
AKAM’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR ratings are calculated taking 118 different factors into account, with each factor being optimally weighted. AKAM was upgraded from Neutral to Buy on September 3, 2021.
AKAM has the grade B for value, stability and quality. In the 74 series Technology services It ranks 20th in the industry.
To see additional POWR ratings for sentiment, growth, and momentum for AKAM, Click here.
VEON GmbH (VEON)
VEON, headquartered in the Netherlands, is a communications and technology company providing voice, data and other telecommunications services through a range of wireless, landline and broadband internet services to businesses, operators and consumers, as well as equipment and accessories. It offers mobile communications services as part of contract and prepaid tariffs for corporate and consumer segments as well as value-added services.
September 2021, VEON’s VEON Ventures division increased its investment in ShopUp, Bangladesh’s leading full-stack B2B commerce platform. As VEON is increasing the range of its 4G networks, this investment in ShopUp reflects its growing focus on digital services that are enjoying rapid customer acceptance.
On August 23, 2021, Beeline, the mobile operator of VEON in Russia, partnered with the Russian Sechenov Medical University to harness Beeline’s advanced capabilities in artificial intelligence (AI) and data analysis technology in diagnostic medicine to repair hip joint damage Early detection and identification of kidney disease and potential cancers. VEON is looking forward to a long-term partnership with the university.
For the second fiscal quarter ended June 30, 2021, VEON’s total revenue increased 9.1% year over year to $ 2.07 billion. The company’s operating income was $ 374 million, up 14.4% from the same period last year. The company had cash and cash equivalents of $ 1.19 billion as of June 30, 2021.
A consensus EPS estimate of $ 0.11 for the current quarter ending September 30, 2021 is an improvement of 14% year over year. Analysts expect VEON’s revenue to grow 6.6% year over year to $ 2.12 billion in the current quarter.
In terms of non-GAAP forward P / E, VEON is currently trading at 6.15x, which is 70% below the industry average of 20.52x. In terms of forward price / sales, VEON is currently trading at 0.45x, which is 74.1% below the 1.72x industry average.
The share gained 63.1% in the past year and 20.5% in the last month. It ended yesterday’s trading session at $ 2.12.
VEON’s POWR ratings reflect this promising outlook. The stock has an overall rating of B, which translates to “Buy”. In addition, it was upgraded from Neutral to Buy on September 3, 2021.
VEON has the grade B for growth, value and quality. Of the 49 B-rated stocks Telecommunications – abroad Industry is VEON in 6th place.
In addition to the POWR ratings I highlighted, you can see VEON’s ratings for Sentiment, Momentum and Stability here.
The AKAM share remained unchanged in after-hours trading on Wednesday. Since the beginning of the year, AKAM has gained 8.00%, compared to an increase in the reference index S&P 500 of 21.39% in the same period.
About the author: Sweta Vijayan
Sweta is an investment analyst and journalist with a particular interest in finding market inefficiencies. Her passion is to educate investors so that they can be successful in the stock market.