Most investors are familiar with high-performing stocks, even though there is often disagreement regarding each company’s future development potential.
Nonetheless, many good firms fall out of favor with investors or are disregarded due to momentary obstacles that do not jeopardize the positive thesis.
Stocks to Buy
Let’s look at two undervalued tech stocks to buy: Garmin stock (NYSE:GRMN) and Palo Alto Networks stock (NASDAQ:PANW).
1. Garmin Stock: Garmin is a Varied Company.
There are several reasons why Wall Street has recently avoided Garmin’s stock (NYSE:GRMN). Growth has slowed compared to a year ago, profitability is declining, and Apple has new competition in a crucial tech product category.
However, astute investors may look beyond such concerns and concentrate on Garmin’s promising future. Consider that sales are on course to increase for the seventh straight year in 2022, on top of massive increases in the epidemic’s early stages. Garmin’s yearly sales are nearing $5 billion, up from $3.8 billion in 2019.
The brand is also well-diversified, with dozens of successful products in the fitness, smartwatch, and adventure watch sectors. Garmin also has significant operations in aviation and marine navigation. Growth in some of these regions balances losses in others, allowing sales to remain stable through the first half of 2022. This simply places it as one of the stocks to buy.
Continued market share increases in these sectors and improving margins could boost profit growth after the current growth slump. And investors are being given an appealing price for the stock, which has fallen roughly 40% this year.
2. PANW Stock: Palo Alto Networks is a Lucrative Company.
Palo Alto Networks stock (NASDAQ:PANW) has outperformed the market this year, but Wall Street analysts may still be underestimating its potential as a major stock to buy. After all, the cybersecurity platform is rapidly expanding. Sales increased by 27% in the most recent quarter, while billings increased by 44%. Management attributed the increased pace of innovation to convincing more businesses to sign on to bigger and larger yearly contracts.
The greatest criticism of the stock (NASDAQ:PANW) in recent years has been Palo Alto’s inability to provide a clear route to profitability. However, that problem may have been resolved. For the first time since 2018, the firm earned profitability under generally accepted accounting standards (GAAP) this past quarter. Nikesh Arora and his colleagues anticipate further profit increase, balanced by robust revenue growth, through the current fiscal year 2023.
True, adverse economic trends might jeopardize the positive outlook and perhaps reduce profitability in the near term. On the other hand, this software-as-a-service stock is on track to convert more than one-third of its revenues into free cash flow this year. That outstanding measure implies a robust operational model that is anticipated to provide market-beating returns over a long period as organizations transfer more work to hybrid and remote work platforms.
When Wall Street experts shun a stock, there are typically valid grounds for their skepticism. However, in the case of Palo Alto Networks and Garmin, investors are disregarding positive measures like cash flow and market share growth to concentrate on short-term volatility. Consider profiting from that gap by adding these stocks to your watch list right now.
Featured Image- Unsplash @ Yiorgos Ntrahas
Author Okoro Chinedu 
