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 rally in tech stocks, e-commerce companies like Shopify they are not the best investment options. absolute software (TSX:ABST)(NASDAQ:ABST), Evertz Technologies (TSX:ET), and TELUS International (TSX:TIXT)(NYSE:TIXT) should be on your shopping list.
Expansion and scale
Absolute Software has just had a transformative year and is ready to expand its customer base around the world while further scaling the business. In fiscal year 2022 (12 months ending June 30, 2022), gross revenue grew 63% compared to fiscal year 2021. According to management, total revenue of $197.3 million was a new record and Absolute’s strongest in recent history.
In the fourth quarter of 2022, corporate and government annual recurring revenue (ARR) increased 70% to $209.5 million compared to the fourth quarter of 2021. Absolute Software is the only provider of intelligent and self-healing security solutions. Organizations and businesses need these solutions to counter threats from cybercriminals.
Ready for economic revival and industry transition
Evertz Technologies provides solutions to the broadcast television, 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 results for the first quarter of fiscal 2023, although impressive financial results in fiscal 2022 indicate a flourishing business. In the year ending April 30, 2022, revenue grew 28.6% from the prior year to $441 million. Net earnings were $72.72 million, an increase of 73.3% over fiscal 2021.
Double-digit revenue growth and profitability
The $9.89 billion company designs, builds and delivers next-generation digital solutions. TIXT’s services support the entire lifecycle of its clients’ digital transformation journeys. For the six months ended June 30, 2022, revenue ($1.22 billion) and net income ($90 million) grew 18.9% and 373.7% compared to the same period in 2022.
According to management, the company will continue to benefit from potential supplier consolidation activity among its more than 600 global customers.
Absolute Software, Evertz and TELUS International are potential multi-packers. The first two are already beating the market, while TIXT should roar back if it maintains double-digit revenue growth and profitability.