The tech sector has been a hotbed of growth for investors with companies consistently outperforming the broader market. This trend reached a crescendo during the tech bull run of 2023, showcasing the sector’s robust potential.
While many investors gravitate towards well-known tech giants during market pullbacks, often overlooked are the hidden gems quietly burgeoning in the tech industry sidelines.
Here, we delve into three tech stocks displaying promising signs of substantial revenue and earnings growth, making them compelling options for long-term wealth creation.
Exploring AppFolio (APPF)
Source: Pavel Kapysh / Shutterstock.com
AppFolio (NASDAQ:APPF) operates in the realm of cloud technology, revolutionizing business operations in diverse sectors. Specializing in real estate solutions, AppFolio empowers clients to digitize their critical operations and transform their businesses.
The company’s offerings cater to both property managers and investment managers, providing essential features for tenant screening, risk mitigation services, payments, and property management.
Recent quarterly results have been nothing short of impressive with revenue surging to $187.4 million, denoting a remarkable 38% increase over the previous year. Furthermore, the company’s earnings per share (EPS) witnessed a stellar upswing from a loss of 99 cents to a gain of $1.07, marking a phenomenal 208% year-over-year growth (YOY).
CEO Shane Trigg attributes this outstanding performance to AppFolio’s unwavering commitment to innovation, exceptional service, and fostering strong connections with customers, all driving the company’s ongoing success.
With a bullish outlook projecting revenues between $766 million and $774 million and robust operating margin growth for fiscal year 2024, including AppFolio in your tech stock watchlist is a prudent move.
Unveiling Wix.com Ltd. (WIX)
Source: MagioreStock / Shutterstock.com
A crucial element for any growing company’s strategy involves establishing a digital presence, and this is where companies like Wix.com Ltd. (NASDAQ:WIX) play a pivotal role.
Wix.com offers comprehensive solutions enabling businesses of all sizes to execute various functions such as selling products, accepting reservations, and scheduling appointments seamlessly. The recent introduction of the AI Website Builder, incorporating artificial intelligence into the website creation process, has further enhanced Wix.com’s offerings.
Wrapping up fiscal year 2023 on a high note, Wix.com surpassed its revenue targets with a significant 13% year-over-year increase, reaching $1.56 billion. EPS demonstrated a noteworthy improvement, standing at 58 cents – a remarkable 108% enhancement compared to the previous year, expeditiously achieving the guidance set two years earlier.
Noteworthy is Wix.com’s record free cash flow margin of 16%, underscoring its financial strength. With an optimistic outlook for fiscal year 2024, Wix.com’s strong product suite and improved profitability targets make WIX stock a compelling addition to any growth-oriented tech stock portfolio.
Unleashing Okta (OKTA)
Source: Lori Butcher / Shutterstock.com
In the realm of corporate security, terms like single sign-on and multi-factor authentication have become indispensable for safeguarding intellectual property and sensitive company information. Okta (NASDAQ:OKTA) has emerged as a linchpin in this domain, offering a robust identity access management (IAM) solution.
The company’s suite of services includes multi-factor authentication, single sign-on, and other features designed to seamlessly manage identities within a customer’s system. A recent introduction, Fine Grained Authorization, enables developers to construct scalable and user-friendly authorization models tailored to business requirements.
Concluding fiscal year 2024 on a high note, Okta reported impressive financials with total revenue scaling to $2.3 billion, marking a substantial 22% annual growth. The net loss showed a significant improvement, shrinking to -$2.17 compared to the previous year’s -$5.16, while free cash flow surged to $489 million.
Okta’s strategic focus on modernizing identity infrastructure aligns it well with burgeoning market demands. With a positive outlook for 2025, envisioning total revenue expanding to $2.495 to $2.505 billion, considering OKTA stock for growth-oriented tech portfolios is a prudent move.