The economic headwinds in 2022 have severely affected growth-oriented companies, especially in the technology sector. Rising inflation, multiple rate hikes, and the raging war in Eastern Europe continue to put downward pressure on tech stocks. As of this writing, the sector’s year-to-date loss is more than 40%.
However, if you anticipate a strong bounce back from tech stocks, e-commerce companies like Shopify aren’t the top investment choices. Absolute Software (TSX:ABST)(NASDAQ:ABST), Evertz Technologies (TSX:ET), and TELUS International (TSX:TIXT)(NYSE:TIXT) should be on your buy list instead.
Expansion and scale
Absolute Software just had a transformative year and is ready to expand its customer base worldwide while scaling the business further. In fiscal 2022 (12 months ended June 30, 2022), the top-line grew 63% versus fiscal 2021. According to management, the total revenue of US$197.3 million was a new record and Absolute’s strongest in recent history.
In Q4 2022, Enterprise and Government annual recurring revenue (ARR) soared 70% to US$209.5 million versus Q4 2021. Absolute Software is the only provider of self-healing, intelligent security solutions. Organizations and enterprises need these solutions to counter the threats of cybercriminals.
Ready for the economic revival and industry transition
Evertz Technologies provides solutions to the television broadcast, telecommunications, and new-media industries. The $1.1 billion company supplies software, equipment, and technology solutions to content creators, broadcasters, specialty channels, and television service providers.
Management has yet to report its Q1 fiscal 2023 results, although the impressive financial results in fiscal 2022 indicate a flourishing business. In the year ended April 30, 2022, revenue grew 28.6% from a year ago to $441 million. Net earnings were $72.72 million, a 73.3% increase from fiscal 2021.
Double-digit revenue and profitability growth
The $9.89 billion company designs, builds, and delivers next-generation digital solutions. TIXT’s services support the entire lifecycle of its customers digital transformation journeys. In the six months ended June 30, 2022, revenue (US$1.22 billion) and net income (US$90 million) grew 18.9% and 373.7% versus the same period in 2022.
According to management, the company stands to continue benefiting from potential vendor consolidation activity among its more than 600 global clients.
Multi-baggers
Absolute Software, Evertz, and TELUS International are potential multi-baggers. The first two are already beating the market, while TIXT should roar back if it sustains double-digit revenue and profitability growth.