Many investors buy and hold tech stocks for growth. And why not? Companies in the sector have been outperforming the S&P 500 for as long as I can remember. Some top names are even doing the heavy lifting for the broad market, as evidenced by the tech bull run of 2023.
Smart investors jump in when familiar names experience a correction, hoping to join the ride to recovery. However, most investors tend to focus on big names, ignoring the growing tech stocks hidden on the sidelines.
Today, we’ll look at three tech stocks showing signs of at least 10% growth in revenue and earnings. The companies are sorted based upon the highest earnings growth and in descending order. Let’s dive in.
AppFolio (APPF)
Cloud technology has transformed the ways businesses work in various sectors. Companies like AppFolio (NASDAQ:APPF) provide real estate industry solutions that enable customers to address critical operations and transform their businesses digitally.
The company’s solutions cater to property managers and investment managers alike. AppFolio offers features that help with tenant screening, insurance-related risk mitigation services, payments and property management.
Recently, AppFolio reported impressive quarterly results, with revenue touching $187.4 million, up 38% from the same quarter of the previous year. The company’s EPS improvement from a 99-cent loss to a $1.07 gain was even more impressive, up 208% year-over-year (YOY).
President and Chief Executive Officer (CEO) Shane Trigg attributes the excellent performance to the company’s commitment to innovation and exceptional service. Also, the company fosters deep connections with customers and drives continued success.
Therefore, AppFolio expects revenues to end between $766 million and $774 million while operating margins grow 23% to 24% for fiscal year 2024. With solid growth and growing profitability, including AppFolio in your tech stocks watchlist makes a lot of sense.
Wix.com Ltd.(WIX)
If you want to attract customers online, you’ll need a website. This makes companies like Wix.com Ltd. (NASDAQ:WIX) an essential part of a growing company’s strategy for scaling its business.
Wix.com offers solutions that let businesses of different sizes operate various functions, like selling goods, taking reservations and scheduling appointments. Recently, WIX announced the release of AI Website Builder, incorporating artificial intelligence (AI) into the site-building experience. And, it helps customers build unique and professional websites.
Furthermore, Wix.com ended fiscal year 2023 with a bang, exceeding its targets and hinting at significant growth in future years. Revenue was up 13% YOY and reached $1.56 billion. Also, EPS came in at 58 cents, a 108% improvement from last year’s loss of $7.33 – a full two years earlier than guidance.
In addition, the company achieved a record free cash flow margin of 16%. Wrapping it up, Wix.com anticipates continued momentum through fiscal year 2024. Therefore, with a strong product list and improved profitability targets, WIX stock belongs on any growth investor’s tech stocks to buy and hold watchlist.
Okta (OKTA)
If you’ve worked in the corporate world, you may have heard of the terms single sign-on and multi-factor authorization. These security features ensure that only authorized users can access their software. The growth of technology has made companies like Okta (NASDAQ:OKTA) an crucial part of protecting intellectual property and company-sensitive information.
Okta offers a full-featured identity access management (IAM) solution. It assists companies to employ multi-factor authentication, single sign-on and other features that seamlessly manage identities in the customer’s system.
Recently, the company announced Fine Grained Authorization. It allows developers to build flexible, scalable and easy-to-use authorization models for business and intended use cases.
Okta ended fiscal year 2024 with impressive revenues and cash flow. Total revenue reached $2.3 billion, up 22% YOY. Also, net loss saw relative improvements, reaching -$2.17 compared to last year’s -$5.16. Meanwhile, free cash flow reached $489 million.
Okta’s focus on modernizing and simplifying identity infrastructure has positioned it well to capitalize on market demand. Moving forward, Okta is optimistic about 2025, anticipating total revenue reaching $2.495 to $2.505 billion.
So, if you want to add tech companies to your portfolio for growth, OKTA stock should be one of your targets.
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.
