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2024 Potential: 3 Tech Stock Comparisons

In the dynamic technology landscape, the combination of high product demand and rapid innovation creates an exciting opportunity for future growth. Therefore, let's assess the prospects of tech stocks GoPro (GPRO), Logitech International (LOGI), and Teledyne Technologies (TDY). Keep reading…

The technology industry is positioned for success due to widespread tech adoption, increased digitization investments, and the integration of emerging technologies. While the tech sector faced challenges from rapid rate hikes in the past year, the recent indication of rate cuts by the Fed positions the industry for potential benefits.

Therefore, it could be wise to add fundamentally strong tech stocks Logitech International S.A. (LOGI) and Teledyne Technologies Incorporated (TDY) to one’s portfolio. On the other hand, GoPro, Inc. (GPRO) could be a solid addition to the watchlist.

Before diving deeper into the fundamentals of these stocks, let’s discuss why the tech industry is well-positioned to grow.

The tech industry’s prospects are shaped by global enterprises investing in digital transformation, adopting cloud solutions, integrating AI, and implementing the Internet of Things (IoT). With trends like automation, gaming setups, and the digital revolution, global IT spending is expected to rise 8% year-over-year to reach $5.07 trillion next year.

The widespread adoption of technology in sectors such as healthcare, automotive, and industrial applications has driven demand for electronic components. As devices become smarter and interconnected, there is a fast-growing need for high-quality components. The global electronic components market is expected to grow at a CAGR of 6.8% to reach $368.40 billion by 2032.

Furthermore, fast-paced electronics innovations, such as IoT, AR & VR, and 5G, drive the demand for advanced hardware. The global computer accessories market is projected to grow at a CAGR of 5.9% to $4.62 billion by 2027.

Considering these conducive trends, let’s analyze the fundamentals of the featured stocks.

GoPro, Inc. (GPRO)

GPRO develops and sells cameras, mountable and wearable accessories, as well as subscription services and software internationally. The company offers waterproof cameras such as the HERO series and MAX, along with subscription services like GoPro and Quik, providing editing tools, cloud storage, and camera protection.

On October 19, 2023, GPRO announced that its subscription service exceeded 2.5 million subscribers by the end of Q3, growing 20% year-over-year. The company plans to enhance the subscription offering with the launch of a free Quik desktop app, providing extras like cloud storage, auto-upload, premium editing tools, private live streaming, damaged camera replacement, and more for subscribers.

On September 6, 2023, GPRO announced the HERO12 Black camera, priced at $399.99, featuring up to 2x longer runtimes, 5.3K and 4K HDR video, wireless audio support for Apple AirPods, and new camera features. The launch includes the Max Lens Mod 2.0 accessory and an upcoming Quik desktop app for seamless cross-platform editing, both available to GPRO’s subscribers.

In terms of the trailing-12-month gross profit margin, GPRO’s 32.48% is 8.4% lower than the 35.47% industry average. Likewise, its 0.12% trailing-12-month Capex/Sales is 96.1% higher than the industry average of 3.04%. Additionally, the stock’s 0.96x trailing-12-month asset turnover ratio is 3.1% lower than the industry average of 0.99x.

GPRO’s revenue for the third quarter ended September 30, 2023, declined 3.5% year-over-year to $294.30 million. Its non-GAAP net income and non-GAAP EPS came in at $6.31 million and $0.04, representing a decrease of 80.2% and 78.9% year-over-year, respectively.

On the other hand, as of September 30, 2023, its other long-term assets came in at $310.35 million, compared to $289.29 million as of December 31, 2022.

Street expects GPRO’s revenue for the quarter ending December 31, 2023, to increase 1.6% year-over-year to $326.13 million. However, its EPS for the quarter ending December 31, 2023, is expected to decrease 79.2% year-over-year to $0.03. Over the past three months, the stock has gained 6.7% to close the last trading session at $3.50.

GPRO’s POWR Ratings reflect an uncertain outlook. It has an overall rating of C, which translates to a Neutral in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has a C grade for Growth. Within the A-rated Technology - Hardware industry, it is ranked #24 out of 36 stocks. To see GPRO’s Value, Momentum, Stability, Sentiment, and Quality ratings, click here.

Teledyne Technologies Incorporated (TDY)

TDY and its subsidiaries provide enabling technologies for industrial growth markets internationally. The company operates in four main segments: Instrumentation, Digital Imaging, Aerospace and Defense Electronics, and Engineered Systems.

On October 3, 2023, TDY announced its agreement to acquire Xena Networks, a leading provider of Terabit Ethernet validation and test solutions, expanding TDY LeCroy's Protocol Test Portfolio to include high-speed traffic generation and network emulation capabilities.

Robert Mehrabian, Chairman, President, and CEO at TDY, commented that the acquisition of Xena Networks will be a powerful addition to TDY LeCroy's growing protocol test portfolio, which already includes businesses in PCI Express, USB, storage, networking, video, Bluetooth, Wi-Fi, and storage devices test solutions.

On September 5, 2023, TDY announced the launch of the WaveMaster 8000HD, a high-bandwidth oscilloscope platform (20-65 GHz) with 12-bit encoding and SDA Expert software. It caters to the evolving requirements of next-gen serial data technologies, providing enhanced bandwidth, resolution, and acquisition memory for comprehensive characterization and compliance verification of interfaces.

In terms of the trailing-12-month Return on Total Assets, TDY’s 5.55% is significantly higher than the 0.26% industry average. Its 14.02% trailing-12-month net income margin is 497.6% higher than the industry average of 2.35%. Likewise, its 9.62% trailing-12-month Return on Common Equity is 751.9% higher than the industry average of 1.13%.

TDY’s net sales for the fiscal third quarter ended October 1, 2023, increased 2.9% year-over-year to $1.40 billion. The company’s operating income rose 7.8% over the prior-year quarter to $264.30 million. Its non-GAAP net income attributable to TDY rose 11.7% year-over-year to $241.90 million. Also, its non-GAAP earnings per common share increased 11.2% year-over-year to $5.05.

For the quarter ending December 31, 2023, TDY’s revenue is expected to increase 2.7% year-over-year to $1.46 billion. Its EPS for the quarter ending March 31, 2024, is expected to increase 6% year-over-year to $3.95. It surpassed the Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 10.2% to close the last trading session at $433.45.

TDY’s positive outlook is reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.

It has a B grade for Stability and Sentiment. It is ranked #9 out of 40 stocks in the B-rated Technology - Electronics industry. To see TDY’s Growth, Value, Momentum, and Quality ratings, click here.

Logitech International S.A. (LOGI)

Headquartered in Lausanne, Switzerland, LOGI and its subsidiaries design, manufacture, and market products that connect people to working, creating, gaming, and streaming worldwide. The company's offerings include pointing devices, corded and cordless keyboards, PC webcams, and other accessories for mobile devices.

On October 16, 2023, LOGI introduced Zone Wireless 2, a high-end business headset with AI for noise-free calls. The product, priced at $299, is available worldwide. This should add to the company’s revenue stream.

On October 12, 2023, LOGI announced the Logitech G Adaptive Gaming Kit for the PS5's Access controller, which will be available in January 2024. This kit, priced at $79.99, provides extra buttons and triggers for gamers with accessibility needs. It's designed for customization, includes durable gaming components, and can be purchased on and in select retail stores.

Ujesh Desai, General Manager, Logitech G at LOGI, said, “We're proud to partner with Sony to deliver our Adaptive Gaming Kit to PlayStation fans. This new kit will bring even more customization options for gamers with disabilities who are eagerly anticipating the release of the Access controller for PS5.”

In terms of the trailing-12-month net income margin, LOGI’s 8.95% is 281.7% higher than the 2.35% industry average. Likewise, its 11.32% trailing-12-month EBIT margin is 129.9% higher than the industry average of 4.92%. Furthermore, the stock’s 13.70% trailing-12-month Return on Total Capital is 408.3% higher than the industry average of 2.70%.

LOGI’s net sales for the second quarter (ended September 30, 2023) came in at $1.06 billion. Its non-GAAP gross profit increased marginally year-over-year to $444.07 million. Its non-GAAP operating income rose 17.1% from the year-ago value to $183.22 million.

Moreover, the company’s non-GAAP net income and earnings per share came in at $173.42 billion and $1.09, representing increases of 25.9% and 29.8% year-over-year, respectively.

Street expects LOGI’s EPS for the quarter ending December 31, 2023, to increase 0.7% year-over-year to $1.15. Its revenue for the quarter ending June 30, 2024, is expected to increase 1.8% year-over-year to $991.97 million. It surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past six months, the stock has gained 66.2% to close the last trading session at $92.58.

LOGI’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which translates to a Buy in our proprietary rating system.

It has an A grade for Momentum and a B for Quality. Within the Technology - Hardware industry, it is ranked #18. To see LOGI’s Growth, Value, Stability, and Sentiment ratings, click here.

What To Do Next?

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TDY shares were unchanged in premarket trading Tuesday. Year-to-date, TDY has gained 8.39%, versus a 25.90% rise in the benchmark S&P 500 index during the same period.

About the Author: Abhishek Bhuyan

Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.


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