Wall Street ended the first week of the New Year with a loss as investors remained concerned about the forthcoming interest-rate hikes and the continuing spread of the COVID-19 omicron variant. Among other sectors, many technology and growth stocks tumbled last week. However, the overall tech sector is projected to advance due to continuing remote working and digital transformation. According to Nicholas Bloom, an economics professor at Stanford University, with almost every other organization delaying their return-to-office plans, “The idea of a full return is dead.”
In addition, because cloud computing, metaverse, and artificial intelligence (AI) make peoples’ lives more convenient, the tech industry’s prospects look bright. McKinsey claims that digital connections, powered by 5G and the Internet of Things (IoT), have the potential to unlock economic activity.
So, we think it could be wise to scoop up fundamentally sound tech stocks, Accenture plc (ACN), Intuit Inc. (INTU), and Synopsys, Inc. (SNPS), which declined by more than 10% in price last week.
Accenture plc (ACN)
Based in Dublin, Ireland, ACN is a professional services company that provides strategy and consultation, interactive, and technology and operations services worldwide. The company also offers several application services.
On Dec. 16, 2021, Julie Sweet, Accenture’s Chair & CEO, said, “Our goal is to create 360° value for all our stakeholders and reflects our growth strategy, our core values and our culture of shared success—succeeding not only financially, but in dimensions of value, such as inclusion and diversity, reskilling, sustainability and experience. And today, we are launching our integrated 360° Value Reporting Experience, a new way to share the value we create in all directions.”
For its fiscal year 2022 first quarter, ended Nov. 30, 2021, ACN’s revenues increased 27.2% year-over-year to $14.97 billion. Its net income came in at $1.82 billion, up 19.6% year-over-year, and its EPS increased 19.9% to $2.78.
ACN’s revenue is expected to come in at $52.92 billion in its fiscal year 2022, representing an 18.1% year-over-year rise. The company’s EPS is expected to increase 19.4% year-over-year to $9.31 in fiscal 2022. It lost 10.6% last week. Over the past year, the stock has gained 40.9% to close Friday’s trading session at $370.75.
It is no surprise that ACN has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
In addition, it has a B grade for Stability, Sentiment, and Quality. ACN is ranked #6 of 11 stocks in the A-Rated Outsourcing – Tech Services industry. Click here to see the additional POWR Ratings for ACN (Growth, Value, and Momentum).
Intuit Inc. (INTU)
INTU in Mountain View, Calif., provides financial management and compliance products and services for consumers, small businesses, self-employed and accounting professionals in the United States, Canada, and internationally. It has four segments: Small Business and Self-Employed, Consumer, Credit Karma, and ProConnect.
On Nov. 18, 2021, Sasan Goodarzi, INTU’s CEO, said, “We are off to a strong start in fiscal year 2022, delivering on our strategy of becoming an AI-driven expert platform powering the prosperity of consumers and small businesses. We continue to see strong momentum and proof that our Big Bets are further positioning us for durable growth in the future, and we’re delighted that Mailchimp has joined Intuit.”
For its fiscal year 2022 first quarter, ended Oct. 31, 2021, INTU’s product revenue was $397 million, up 8.2% year-over-year. Its total net revenue increased 51.7% year-over-year to $2.01 billion. And its EPS came in at $0.82, up 9.3% year-over-year.
INTU’s revenue is expected to be $12.27 billion in fiscal 2022, representing a 27.4% year-over-year rise. The company’s EPS is expected to increase 20.1% year-over-year to $11.70 in its fiscal 2022. It declined 11.7% in price last week. Over the past year, the stock has gained 4% to close Friday’s trading session at $567.56.
It is no surprise that INTU has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Sentiment and Quality and a B grade for Growth.
INTU is ranked #19 of 167 in the Software – Application industry. Click here to see the additional POWR Ratings for INTU (Stability, Value, and Momentum).
Synopsys, Inc. (SNPS)
SNPS in Mountain View, Calif., provides electronic design automation software products to design and test integrated circuits. It serves electronics, financial services, automotive, medicine, energy, and industrial areas.
On June 8, 2021, SNPS announced that it had acquired Code Dx. Jason Schmitt, general manager of the Synopsys Software Integrity Group, said, “While robust security testing is vital to securing modern software, it often produces large amounts of vulnerability data that is difficult to manage at speed and at scale. Code Dx enables our customers to optimize and harness the breadth of our application security portfolio, along with third-party tools, by aggregating, correlating, and prioritizing security testing results based on risk.”
SNPS’ total revenue increased 12.4% year-over-year to $1.15 billion for its fiscal fourth quarter, ended Oct. 31, 2021. Its non-GAAP net income came in at $285.76 million, up 15.4%, and its non-GAAP EPS was $1.82, up 15.2% year-over-year.
For its fiscal 2022, SNPS’ revenue is expected to grow 14.8% to $4.83 billion year-over-year. Its EPS is expected to increase 15.5% year-over-year to $9.02 in fiscal 2023. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock declined 10.4% in price last week. Over the past year, the stock has gained 27.6% to close Friday’s trading session at $330.36.
SNPS’ strong fundamentals are reflected in its POWR ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Quality and a B grade for Growth, Stability, and Sentiment.
SNPS is ranked #3 of 53 stocks in the B-Rated Technology – Hardware industry. Click here to see the additional POWR Ratings for SNPS (Value and Momentum).