The technology services industry is mature, with demand for services in good shape. Revenues, income and cash flows are anticipated to gradually reach the pre-pandemic levels, aiding most industry players to pay out stable dividends. Consequently, this industry is flourishing in 2024.
We have selected three stocks from this space for investment picks. These are Duolingo Inc. DUOL, Maplebear Inc. CART and SoFi Technologies Inc. SOFI. Our selection is based on four criteria.
First, these companies have a well-established business model. Second, these stocks have strong upside potential for the rest of 2024. Third, these stocks have seen positive earnings estimate revisions in the last 30 days. Fourth, each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Technology Services Industry Thriving
The business software industry is gaining from robust demand for multi-cloud-enabled software solutions, given the ongoing transition from legacy platforms to modern cloud-based infrastructure.
The industry players are incorporating artificial intelligence and tools like machine learning in their applications to make the same more dynamic and result-oriented. Elevated demand for enterprise software, which is ramping up productivity and improving the decision-making process, is a key catalyst.
In the past year, the Zacks Defined Technology Services industry has rallied an impressive 52.3%. Year to date, the Technology services industry has surged 21.7%. Since the Technology Services industry ranks within the top 33% of Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.
Solid Earnings Estimate Revisions for DUOL Stock
Duolingo operates as a mobile learning platform in the United States, China, the United Kingdom, and internationally. DUOL offers courses in 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese, and Chinese through the Duolingo app. DUOL also provides a digital language proficiency assessment exam.
DUOL has an expected revenue and earnings growth rate of 38.6% and more than 100%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, current year and next year in the last 30 days.
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Strong Price Upside for DUOL Shares
In the past six months, DUOL shares provided a return of 6.1%. The average price target of brokerage firms represents an increase of 10.5% from the last closing price of $207.37. The brokerage target price is currently in the range of $183-$271.
CART Stock Earnings Estimates on the Rise
Maplebear is a grocery technology company principally in North America that works with grocers and retailers to transform how people shop. CART’s Instacart Platform offers retailers a suite of enterprise-grade technology products and services to power their e-commerce experiences, fulfill orders, digitize brick-and-mortar stores, provide advertising services, and glean insights. CART also operates virtual convenience stores; and provides software-as-a-service solutions to retailers.
CART has an expected revenue and earnings growth rate of 11% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the last 30 days.
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Strong Price Upside for CART Shares
In the past six months, CART shares climbed 14.4%. Despite this rally, the average price target of brokerage firms represents an increase of 20.9% from the last closing price of $35.70. The brokerage target price is currently in the range of $32-$52.
Solid Earnings Estimate Revisions for SOFI Stock
SoFi Technologies provides various financial services in the United States, Latin America, and Canada. SOFI operates through three segments: Lending, Technology Platform, and Financial Services. SOFI offers lending and financial services and products that allows its members to borrow, save, spend, invest, and protect money. SOFI also offers personal loans, student loans, home loans, and related services.
SOFI has an expected revenue and earnings growth rate of 18.6% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, current-year and next-year earnings has improved over the last 30 days.
Image Source: Zacks Investment Research
Strong Price Upside for SOFI Shares
In the past six months, SOFI shares tumbled 12.3%. Nevertheless, the average price target of brokerage firms represents an increase of 15.9% from the last closing price of $7.77. The brokerage target price is currently in the range of $4-$12.
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See Stocks Now >>Maplebear Inc. (CART) : Free Stock Analysis Report
SoFi Technologies, Inc. (SOFI) : Free Stock Analysis Report
Duolingo, Inc. (DUOL) : Free Stock Analysis Report
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