The resurgence of COVID-19 cases has extended enterprises’ dependence on digitally-enabled remote operations. According to International Data Corporation’s (IDC) Worldwide Future of Work Spending Guide, spending on Future of Work (FoW) technologies will be nearly $656 billion this year. The ongoing digital transformation should keep driving the spending on the technology industry this year.
Investors’ confidence in the technology industry is evident in the iShares Global Tech ETF’s (IXN) 33.4% returns over the past year. And according to the Forrester U.S. tech market growth forecast, the U.S. tech spending is expected to rise 9% - 10% in 2021.
Thus, we think it could be wise to bet on quality tech stocks Micron Technology, Inc. (MU), Qorvo, Inc. (QRVO), and Fair Isaac Corporation (FICO), which have suffered price declines recently but possess solid rebound prospects.
Micron Technology, Inc. (MU)
MU provides micron memory and storage solutions that accelerate the transformation of information into intelligence. The Boise, Idaho-based company also delivers a broad portfolio of technologies, such as artificial intelligence and autonomous vehicles. It operates through four segments--Compute and Networking Business Unit; Mobile Business Unit; Storage Business Unit; and Embedded Business Unit.
This month, MU released its “Green Bond Framework,” which reflects the company’s broader commitment to sustainability. This framework will drive positive outcomes for the company by balancing environmental sustainability and good business practices.
Also, this month, MU launched Micron 7400 SSD with NVMe, which offers industry-leading form factor flexibility, PCIe Gen4 speed, and leading security to address the storage needs of demanding data center workloads. Micron offers the most comprehensive range of mainstream data center SSDs in seven different form factors and allows for the transition to next-generation server designs.
MU’s revenue increased 36.6% year-over-year to $8.27 billion in its fiscal fourth quarter, ended September 02, 2021. The company’s gross margin grew 89.2% from its year-ago value to $3.91 billion. Its operating income rose 155.4% from the prior-year quarter to $2.96 billion. Also, the company’s net income increased 174.7% year-over-year to $2.72 billion.
Analysts expect MU’s revenue for its fiscal year 2022 to be $31.94 billion, representing 15.3% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS in each of the trailing four quarters. Its EPS is expected to grow 46% in the current year. The stock has declined 10.3% in price over the past three months. MU has gained 30.3% over the past year, however.
MU’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has an A grade for Value, and a B grade for Growth and Quality. We’ve also graded MU for Stability, Sentiment, and Momentum. Click here to access all of MU’s ratings.
MU is ranked #31 of 98 stocks in the B-rated Semiconductor & Wireless Chip industry.
Click here to checkout our Semiconductor Industry Report for 2021
Qorvo, Inc. (QRVO)
QRVO, which is headquartered in Greensboro, N.C., provides core technologies and radio frequency (RF) solutions to the mobile, infrastructure, defense, aerospace, and Internet of Things markets. The company operates in two segments: Mobile Products (MP), and Infrastructure and Defense Products (IDP). In addition, it provides integrated solutions that include switch-LNA modules, variable gain amplifiers, discrete power amplifiers (PA), and other modules.
This month, QRVO entered a channel agreement with TCT Brazil to support QRVO’s infrastructure and Defense products in Brazil. Through this agreement, QRVO is expected to expand its presence and its go-to-market strategy in Brazil.
During its fiscal first quarter, ended July 3, 2021, QRVO’s revenue increased 41% year-over-year to $1.11 billion. The company’s operating income grew 220.5% from its year-ago value to $297.1 million. Its net income climbed 194.7% from the prior-year quarter to $285.63 million. Also, the company’s EPS increased 202.4% year-over-year to $2.51.
QRVO’s revenue is expected to increase 18.3% year-over-year to $4.75 billion in its fiscal year 2022. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the four trailing quarters. Its EPS is expected to increase 24.5% in the current year. Over the past three months, the stock has decreased 11.9% in price. However, the stock has surged 22.7% over the past year.
QRVO’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has an A grade for Quality, and a B grade for Growth.
In addition to the POWR Rating grades I’ve just highlighted, one can see QRVO’s ratings for Value, Momentum, Sentiment, and Stability here. The stock is ranked #13 in the Semiconductor & Wireless Chip industry.
Fair Isaac Corporation (FICO)
Incorporated in 1992, FICO provides analytic, software, and data management products and services that enable businesses to automate and connect decisions. The San Jose, Calif., company operates through three segments: Applications; Scores; and Decision Management Software. Its segments provide decision management applications, business-to-business and business-to-consumer scoring solutions, software tools, and associated professional services.
In August, FICO extended a multi-year agreement with TransUnion to distribute FICO Scores to lenders, consumers, and other businesses in Canada. This extension should enable the Canadian market to access more information about their credit, and benefit from the FICO Score’s credit scoring tools for risk management.
FICO’s total revenues increased 7.8% year-over-year to $338.18 million for the fiscal third quarter, ended June 30, 2021. The company’s operating income grew 134.6% from the year-ago value to $194.38 million. Its net income rose 136% from the prior-year quarter to $151.2 million. Also, the company’s EPS increased 140.9% year-over-year to $5.18.
Analysts expect FICO’s revenue for the fiscal year 2022 to be $1.4 billion, representing 5.7% growth year-over-year. The company surpassed the consensus EPS in each of the trailing four quarters. Its EPS is expected to grow 24.8% in the current year. The stock has declined 20.8% in price over the past three months.
It’s no surprise that FICO has an overall B rating, which equates to a Buy in our POWR Rating system. Also, the stock has an A grade for Quality, and a B grade for Growth.
Click here to see the additional POWR Ratings for FICO (Momentum, Sentiment, Value, and Stability). FICO is ranked #9 of 160 stocks in the Software – Application industry.
Click here to check out our Software Industry Report for 2021
MU shares were trading at $68.07 per share on Wednesday morning, up $0.50 (+0.74%). Year-to-date, MU has declined -9.33%, versus a 22.00% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research.
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