3 Under-the-Radar Tech Stocks to Buy in 2022

Many technology investors gravitate towards well-established blue chip companies like Apple Y Microsoft for safety, or pursue hypergrowth stocks like Snowflake Y crowdstrike in the hope of higher profits in the long run. There is nothing inherently wrong with either strategy, but investors can miss out on a lot of promising plays if they only follow those well-known stocks.

So today, let’s take a break from those trend tickers and focus on the tech plays that fly under the radar: charging point (CHPT 9.02%), Impinj (PI 2.61%)Y Sustainable (TENB 1.97%) — and see why these three stocks could be great long-term investments.

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1. The EV Game: ChargePoint

ChargePoint builds charging stations for electric vehicles. It ended its last quarter with an installed base of more than 200,000 network ports, which represented a 70% growth over the previous year. It generates most of its income by selling its charging systems to companies, which provide them to customers or use them to charge their own fleets, while the rest comes from subscription fees, which it charges drivers who access its charging stations.

ChargePoint’s revenue was only up 1% in fiscal 2021, but rose 65% to $242 million in fiscal 2022 (ending this January) as it expanded its charging network. Analysts expect its revenue to jump 99% to $482 million this year as more companies install EV charging stations. ChargePoint is trading at 10 times that estimate, which is a surprisingly low price-to-sales ratio for a hyper-growth company with a lot of upside potential.

ChargePoint’s net loss narrowed in fiscal 2022, but it will likely remain unprofitable for the foreseeable future. All that red ink makes it a risky play as interest rates continue to rise, but its profitability could gradually improve as economies of scale kick in and its pricing power improves. Investors looking for an alternative way to benefit from the secular growth of the electric vehicle market without choosing a particular automaker should therefore check out ChargePoint.

2. The IoT game: Impinj

Impinj is one of the world’s largest producers of Radio Frequency Identification (RFID) tags and tag reading hardware. RFID tags are widely used to track merchandise and optimize supply chains, and companies often feed that data into analytics software to optimize their business. That business model makes Impinj a crucial pick-and-shovel player in the growing Internet of Things (IoT) market, which connects objects to each other and to the cloud.

Much of Impinj’s recent growth was fueled by the “retail apocalypse” and the death of weaker traditional retailers. To track consumer trends and keep their inventories tight, many retailers are now aggressively tracking their products with RFID tags to optimize their inventories, spot troubling trends, and widen their counter pits. Amazon. Recent supply chain disruptions around the world have also highlighted the growing importance of RFID tags and tracking software.

Those secular trends are creating long-term tailwinds for Impinj. Its revenue rose 37% to $190 million in 2021, and analysts expect another 29% growth to $245 million this year. It is not yet profitable under GAAP (generally accepted accounting principles), but returned to GAAP profitability in 2021 with a net profit of $6 million. Analysts expect its non-GAAP earnings to more than double this year.

Impinj shares may look a bit pricey at more than 100 times future earnings and nine times this year’s sales. However, I think it could still be a great long-term play in the growing IoT market.

3. The cybersecurity game: Tenable

Tenable is not as well known as cybersecurity leaders like Palo Alto Networks (PANW 1.78%) Y crowdstrike, but a defensible niche has been carved out in proactive network protection services. Instead of defending against attacks, Tenable’s Nessus platform scans networks for security threats like misconfigured software, weak passwords, and other flaws.

Tenable offers the home version of Nessus for free, while a paid version allows businesses to scan all of their networks. It currently serves more than 40,000 organizations worldwide, including 60% of the Fortune 500 and 40% of the Global 2000. It has also been securing those customers with the expansion of its subscription-based cloud platform, Tenable .io.

Tenable’s revenue was up 23% to $541 million in 2021. It’s also not profitable under GAAP, but its non-GAAP net income was up 87% to $39 million. Analysts expect its revenue to grow 25% this year, but its non-GAAP earnings to decline 44% as it increases its investments.

Like Impinj, Tenable could initially appear expensive at more than 100 times future earnings. However, it is only trading at six times this year’s sales, making it quite cheap relative to its cybersecurity peers. Palo Alto, which is larger but growing at a similar rate, is trading at eight times this year’s sales. In short, Tenable could still have a lot of room to grow.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. leo sun He has positions in Amazon, Apple, CrowdStrike Holdings, Inc. and Palo Alto Networks. The Motley Fool has positions and recommends Amazon, Apple, CrowdStrike Holdings, Inc., Microsoft, Palo Alto Networks, and Snowflake Inc. The Motley Fool recommends Impinj and recommends the following options: long March 2023 $120 calls at Apple and short March 2023 $130 calls at Apple. The Motley Fool has a disclosure policy.

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