The Nasdaq hit a record high after Fed chairman Jerome Powell reassured investors with his comment. The central bank’s next interest rate move is more likely not to be a hike, even though inflation has been higher than expected. This announcement was met with optimism and moved most tech stocks higher. And names like NVDA, TSLA and AAPL are leading the way in terms of dollar volume of transactions. With investors chasing popular names, though, volatility comes into the market. This got me thinking about the overlooked tech stocks that could surge 10x or more.
Unlike stocks that move with the market, we can look at others that don’t normally follow the herd yet can still provide generous returns to investors. To do that, we’ll need to consider beta.
Beta is a metric that reveals the sensitivity of a stock versus the index. If a stock has a beta of 1, it moves in line with how the index moves. Anything lower than that makes the stock less volatile to the market’s sensitivity, making it a great choice for risk-averse investors.
To get the list of overlooked stocks in the tech sector that could surge 10x, I used some criteria.
- year-to-date (YTD) price percent change above 15%
- positive year-over-year (YOY) revenue growth
- a 5-year monthly beta below 1
Then, I sort them based on the stock’s YTD price percent return from highest to lowest.
VerifyMe (VRME)
VerifyMe (NASDAQ:VRME) provides specialized software and process technology for traceability and authentication with the help of machine learning and artificial intelligence (AI). The company operates in two main segments.
- Precision Logistics: specializes in predictive analytics that assists in delivery and temperature optimization for sensitive perishable products.
- Authentication: specializes in traceability, allowing brands to connect their consumers and products.
The company operates alongside two subsidiaries, Trust Codes Global and PeriShip Global, which run its main business segments.
VerifyMe’s fiscal year 2023 had some improved metrics to report. Annual revenue rose by 29% YOY to $25.3 million. Also, gross profit saw a 36% increase, reaching $9.0 million. This improvement has narrowed net losses from $14.4 million in 2022 to $3.4 million.
Also, Chief Executive Officer (CEO) and President Adam Stedham was pleased with the results, stating, “We have a strong balance sheet, and 2023 was the company’s first year with positive cash flow from operations.”
This continuous improvement highlights the strong potential for growth. Coupled with a YTD price percent return of 44.6% and a 5-year monthly beta of 0.53, VRME stock’s attractiveness as an unseen winner is ready to boost any investor’s portfolio.
Commvault Systems (CVLT)
Cybersecurity is crucial in the modern world, and companies like Commvault Systems (NASDAQ:CVLT) help ensure online security. The company offers a unified management platform that can be used anywhere and is structured in any way.
Commvault provides solutions that combine various software subscriptions, Software as a Service (SaaS) or partner-managed via its metallic portfolio. Recently, the company announced the acquisition of Appranix, which aims to keep its enterprise clients up and running during cyberattacks.
Commvault reported strong results for fiscal year 2024, with total revenue growing 7% YOY. Total ARR reached $770 million, representing a 15% growth rate. Meanwhile, subscription ARR grew even more, at 25%. That impressive performance translates to an impressive profit turnaround of $3.85 per share from last year’s 80-cent loss. Its popular Commvault Cloud platform and increasing demand due to cyber threats drive this success.
Despite the good news, Commvault is still overlooked. It has a 5-year beta of 0.65 and a YTD price percent return of 43%. With a relatively low profile and impressive performance, CVLT stock could be a great option for investors looking for tech exposure at a lower risk.
Vertex (VERX)
We often say that one of the things that we can’t avoid in life is taxes. As such, this makes companies like Vertex (NASDAQ:VERX), which offers enterprise tax technology solutions, important.
The company’s solutions offer local, state and value-added tax calculations. Vertex’s software products are sold as a service through cloud subscriptions or as software licenses and are offered in the U.S. and internationally. In addition to its tax software, Vertex provides various services like indirect tax return preparation, tax payment and filing.
The company had a strong fiscal year 2023, with revenue growing 16.4% YOY. Software subscription revenues reached $480.8 million, up 15.7%, while cloud revenues reached $214.6 million, up 27.1%. While the bottom line ended at a 9-cent loss, net revenue retention continuously improved 113%, thanks to its strong customer retention rate and expansion capability.
VERX stock has a low 5-year monthly beta of 0.65 and a YTD price percent change of 25%, making it a low-risk tech stock with excellent prospects.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.