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Zacks Investment Ideas feature highlights: Qualys and Celestica
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For Immediate Release
Chicago, IL – August 23, 2024 – Today, Zacks Investment Ideas feature highlights Qualys (QLYS - Free Report) and Celestica Inc. (CLS - Free Report) .
2 Top-Ranked Under-the-Radar Tech Stocks to Buy for Huge Upside
The bulls are back in control of the stock market. The S&P 500 and the Nasdaq are trading above their 21-day and 50-day moving averages following the massive two-week comeback.
There could be more selling and volatility ahead considering that stocks like Nvidia soared over 30% in the blink of an eye.
No matter what happens in the short term, the bulls are in the driver’s seat as they look ahead to robust, tech-driven earnings growth and interest rate cuts. The Fed’s July minutes appeared to lock in the start of a dovish cycle at the next FOMC meeting on September 17 and 18.
The only question on Wall Street’s collective mind is if the Fed starts with a 25-basis point cut or 50. The CME Fed Watch Tool has the odds of a 50 bps cut at roughly 35% right now.
Investors likely want to keep adding exposure to the stock market.
Today we dive into two Zacks Rank #1 (Strong Buy) technology stocks with solid growth outlooks in key industries that offer value and big upside potential.
Buy Qualys Stock Down 40% from Its Highs?
Qualys provides cloud-based cybersecurity, compliance, and IT solutions. Qualys’ diverse customer base includes enterprises, small and medium-sized businesses, governments, and other entities, helping Qualys remain resilient to spending patterns and business cycles.
Cybersecurity is a constant threat in our digital age, making it increasingly difficult for companies and entities of all stripes to pull back on spending, much less cut it out altogether.
Qualys continues to face cybersecurity competition from much larger companies. Roughly 40% of its sales came from outside the U.S. last year, which means Qualys faces near-term headwinds of slowing global economic growth and currency exchange fluctuations.
Qualys stock has been punished by its slowing sales outlook after five-plus years of double-digit revenue expansion and its fading earnings picture.
Qualys boasts over 10,000 subscription customers globally and averaged 15% revenue growth during the trailing five years. The company is projected to grow its sales by 8% in both FY24 and FY25 to reach $649 million next year (adding about $100 million to the top-line vs. 2023).
Qualys is expected to grow its adjusted earnings by 6% in 2024 and 4% next year. Qualys’ management provided upbeat EPS guidance when it reported its Q2 results on August 6.
The cybersecurity firm’s recently improved bottom-line outlook helps Qualys earn a Zacks Rank #1 (Strong Buy). The positive post-Q2 revisions help wash away some of its downward revisions from earlier this year that contributed to its falling stock price.
Qualys stock has tumbled 40% since late 2023. Despite the huge fall, QLYS has climbed 395% in the past 10 years to crush the Zacks Tech sector’s 300%. Qualys shares are trading just below their 200-week moving average for only the second time in the past decade, and at their most oversold RSI levels since 2016—QLYS stock hit its most overbought levels in late 2023 before it tumbled.
Qualys could be ready to break out following its recent upward revisions, especially as Wall Street hunts for tech stock deals. Qualys also boasts a strong balance sheet that will help it thrive in a vital industry.
Valuation-wise, QLYS trades at its lowest level in the past 10 years at 31.1X forward 12-month earnings, marking a 90% discount to its 10-year highs and 50% value compared to its medium.
Why Celestica Stock Is a Strong Buy Right Now
Celestica Inc. is a leader in design, manufacturing, hardware platform, supply chain solutions, and beyond. Celestica’s portfolio services companies across communications, aerospace and defense, energy, healthcare technology, industrial equipment, and other key areas.
Celestica is benefitting from the expansion of data centers, AI, the energy transition, and various other growth segments. Celestica operates two reportable units: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS).
Celestica expanded its revenue by 29% in 2022 and 10% in FY23, and it posted a solid beat-and-raise Q2 FY24 in late July. The $6.4 billion market cap firm is projected to grow its revenue by 19% this year and another 9% in 2025 to soar from $7.96 billion last year to $10.28 billion in FY25.
Celestica is projected to post 50% adjusted earnings per share growth this year and 9% higher next year, following 35% average adjusted EPS growth in the trailing four years.
Celestica’s improved earnings outlook helps it land a Zacks Rank #1 (Strong Buy) right now, with its FY24 and FY25 consensus estimates up 10% since its second quarter release. Celestica’s recent positive earnings revisions extend its impressive run of ascending earnings.
Celestica shares have climbed 685% in the past five years vs. Tech’s 146%, including a 150% surge in the past year. Celestica stock got caught up in the recent wave of tech selling, with CLS trading 15% below its mid-July highs. Celestica found support near its 200-day and hovers near its 50-day and at neutral RSI levels.
Investors don’t have to pay up for Celestica’s growth outlook and outperformance, with CLS stock trading at a 43% discount to the wider Zacks Tech sector at 15.6X forward 12-month earnings. Celestica also trades 58% below its 10-year highs.
Why Haven't You Looked at Zacks' Top Stocks?
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Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Qualys and Celestica
For Immediate Release
Chicago, IL – August 23, 2024 – Today, Zacks Investment Ideas feature highlights Qualys (QLYS - Free Report) and Celestica Inc. (CLS - Free Report) .
2 Top-Ranked Under-the-Radar Tech Stocks to Buy for Huge Upside
The bulls are back in control of the stock market. The S&P 500 and the Nasdaq are trading above their 21-day and 50-day moving averages following the massive two-week comeback.
There could be more selling and volatility ahead considering that stocks like Nvidia soared over 30% in the blink of an eye.
No matter what happens in the short term, the bulls are in the driver’s seat as they look ahead to robust, tech-driven earnings growth and interest rate cuts. The Fed’s July minutes appeared to lock in the start of a dovish cycle at the next FOMC meeting on September 17 and 18.
The only question on Wall Street’s collective mind is if the Fed starts with a 25-basis point cut or 50. The CME Fed Watch Tool has the odds of a 50 bps cut at roughly 35% right now.
Investors likely want to keep adding exposure to the stock market.
Today we dive into two Zacks Rank #1 (Strong Buy) technology stocks with solid growth outlooks in key industries that offer value and big upside potential.
Buy Qualys Stock Down 40% from Its Highs?
Qualys provides cloud-based cybersecurity, compliance, and IT solutions. Qualys’ diverse customer base includes enterprises, small and medium-sized businesses, governments, and other entities, helping Qualys remain resilient to spending patterns and business cycles.
Cybersecurity is a constant threat in our digital age, making it increasingly difficult for companies and entities of all stripes to pull back on spending, much less cut it out altogether.
Qualys continues to face cybersecurity competition from much larger companies. Roughly 40% of its sales came from outside the U.S. last year, which means Qualys faces near-term headwinds of slowing global economic growth and currency exchange fluctuations.
Qualys stock has been punished by its slowing sales outlook after five-plus years of double-digit revenue expansion and its fading earnings picture.
Qualys boasts over 10,000 subscription customers globally and averaged 15% revenue growth during the trailing five years. The company is projected to grow its sales by 8% in both FY24 and FY25 to reach $649 million next year (adding about $100 million to the top-line vs. 2023).
Qualys is expected to grow its adjusted earnings by 6% in 2024 and 4% next year. Qualys’ management provided upbeat EPS guidance when it reported its Q2 results on August 6.
The cybersecurity firm’s recently improved bottom-line outlook helps Qualys earn a Zacks Rank #1 (Strong Buy). The positive post-Q2 revisions help wash away some of its downward revisions from earlier this year that contributed to its falling stock price.
Qualys stock has tumbled 40% since late 2023. Despite the huge fall, QLYS has climbed 395% in the past 10 years to crush the Zacks Tech sector’s 300%. Qualys shares are trading just below their 200-week moving average for only the second time in the past decade, and at their most oversold RSI levels since 2016—QLYS stock hit its most overbought levels in late 2023 before it tumbled.
Qualys could be ready to break out following its recent upward revisions, especially as Wall Street hunts for tech stock deals. Qualys also boasts a strong balance sheet that will help it thrive in a vital industry.
Valuation-wise, QLYS trades at its lowest level in the past 10 years at 31.1X forward 12-month earnings, marking a 90% discount to its 10-year highs and 50% value compared to its medium.
Why Celestica Stock Is a Strong Buy Right Now
Celestica Inc. is a leader in design, manufacturing, hardware platform, supply chain solutions, and beyond. Celestica’s portfolio services companies across communications, aerospace and defense, energy, healthcare technology, industrial equipment, and other key areas.
Celestica is benefitting from the expansion of data centers, AI, the energy transition, and various other growth segments. Celestica operates two reportable units: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS).
Celestica expanded its revenue by 29% in 2022 and 10% in FY23, and it posted a solid beat-and-raise Q2 FY24 in late July. The $6.4 billion market cap firm is projected to grow its revenue by 19% this year and another 9% in 2025 to soar from $7.96 billion last year to $10.28 billion in FY25.
Celestica is projected to post 50% adjusted earnings per share growth this year and 9% higher next year, following 35% average adjusted EPS growth in the trailing four years.
Celestica’s improved earnings outlook helps it land a Zacks Rank #1 (Strong Buy) right now, with its FY24 and FY25 consensus estimates up 10% since its second quarter release. Celestica’s recent positive earnings revisions extend its impressive run of ascending earnings.
Celestica shares have climbed 685% in the past five years vs. Tech’s 146%, including a 150% surge in the past year. Celestica stock got caught up in the recent wave of tech selling, with CLS trading 15% below its mid-July highs. Celestica found support near its 200-day and hovers near its 50-day and at neutral RSI levels.
Investors don’t have to pay up for Celestica’s growth outlook and outperformance, with CLS stock trading at a 43% discount to the wider Zacks Tech sector at 15.6X forward 12-month earnings. Celestica also trades 58% below its 10-year highs.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.