5 Tech Stocks Under $5 Wall Street Believes Are Set to Soar in 2022
Amid worsening inflation, anxiety around impending aggressive interest rate increases has been driving massive sell-offs in the tech industry. However, financially strong tech stocks are expected to withstand the downtrend....
Amid worsening inflation, anxiety around impending aggressive interest rate increases has been driving massive sell-offs in the tech industry. However, financially strong tech stocks are expected to withstand the downtrend. Indeed, Wall Street analysts expect quality tech stocks Nokia (NOK), Aurora Innovation (AUR), Latch (LTCH), Casa Systems (CASA), and mCloud Technologies (MCLD), which are currently trading at less than $5, to rally by more than 50% in price the near term. So, let's discuss these names.
Inflation skyrocketed last month, with the Consumer Price Index (CPI) rising 7.9%, marking its biggest year-over-year jump since 1982. As oil prices keep rising and supply-side circumstances continue to deteriorate due to increased sanctions on Russia, inflation is set to climb further. Therefore, concerns over the interest rate increases this year to control inflation have been fueling selloffs in the tech sector. The Fed is expected to move forward with its first-rate hike next week. However, analysts don't expect the interest rate increases to be as aggressive as expected earlier, considering other, geopolitical, factors.
Since growing dependence on technology makes the industry's prospects bright, fundamentally sound tech stocks are expected to withstand the market's turbulence. With rapid digitization, the demand for advanced tech products and applications is expected to soar.
So, Wall Street analysts expect quality tech stocks Nokia Oyj (NOK), Aurora Innovation, Inc. (AUR), Latch, Inc. (LTCH), Casa Systems, Inc. (CASA), and mCloud Technologies Corp. (MCLD), which are trading at less than $5, to rally more than 50% in price in the near term. So, we think it could be wise to add these stocks to one's watchlist.
Nokia Oyj (NOK)
Headquartered in Espoo, Finland, NOK provides mobile and fixed network solutions worldwide. The company operates through four segments: Mobile Networks; Network Infrastructure; Cloud and Network Services; and Nokia Technologies.
On March 8, 2022, NOK joined the 5G Open Innovation Lab (5G OI Lab) as a corporate sponsor. Ed Alfonso, EVP and GM of Nokia America's Mobile Networks, said: "Working together, we can prove out new 5G and edge use cases and collaborate directly with the startup community that is dreaming up even bigger applications for 5G. Nokia is dedicated to participating in 5G OI Lab's programs with our industry-leading 5G technology and experts."
NOK's operating profit came in at €740 million ($814.11 million) for the fourth quarter, ended Dec. 31, 2021, up 67.8% year-over-year. Its profit for the period came in at €680 million ($748.10 million), compared to a €2.7 billion ($2.97 billion) loss, in the prior period. Also, its EPS was €0.12 compared to a €0.48 loss per share in the year-ago period.
Analysts expect NOK's revenue to grow 3.3% year-over-year to $27.10 billion in 2023. Its EPS is estimated to increase 14.8% per annum for the next five years. It surpassed EPS estimates in each of the trailing four quarters. And over the past year, the stock has gained 22.5% to close yesterday's trading session at $4.85. Wall Street analysts expect the stock to hit $7.51 in the near term, which indicates a potential 54.9% upside.
Aurora Innovation, Inc. (AUR)
AUR in Pittsburgh, Pa., is a self-driving technology company in the United States. Its flagship product is the Aurora Driver, which combines software, hardware, and data services to autonomously operate passenger vehicles, light commercial vehicles, and heavy-duty trucks.
On Feb. 14, 2022, AUR and U.S. Xpress Enterprises Inc. (USX) formed a collaboration to explore the deployment of the Aurora Driver within U.S. Xpress operations. Sterling Anderson, AUR's Co-Founder and Chief Product Officer, said, "U.S. Xpress not only shares our commitment to safety, efficiency, and realizing the benefits of technology for good, but has leaned into it in a big way. We are excited to partner with them to deliver the benefits of this transformative technology for their business, their people, and the people they serve."
For the fourth quarter, ended Dec.31, 2021, AUR's collaboration revenue came in at $26.94 million. Its cash and cash equivalents were t $1.61 billion for the period ended Dec. 31, 2021, compared to $387.35 million for the period ended Dec. 31, 2020. The company's total current assets came in at $1.68 billion, compared to $406.45 million for the same period in the prior year.
AUR's EPS is expected to increase by 32.2% in 2022. The stock closed yesterday's session at $4.33. Wall Street analysts expect the stock to hit $13 in price in the near term, which indicates a potential 200.2% upside.
Latch, Inc. (LTCH)
LTCH operates as an enterprise technology company in the United States and Canada. More than one in ten new apartments in the U.S. are currently being built with the company's products, serving customers in more than 44 states. LTCH is headquartered in New York City.
On Feb. 24, 2022, Luke Schoenfelder, LTCH Co-Founder, CEO, and Chairman of the Board of Directors, said, "As we look ahead, I'm confident that our focus on partnerships, innovation, and new market expansion will continue to pave the way for the industry and help deliver the power of LatchOS to even more spaces, customers, and users."
For the fourth quarter, ended Dec. 31, 2021, LTCH's revenue came in at $14.52 million, up 93.9% year-over-year. Its cash and cash equivalents were $124.78 million for the period ended Dec. 31, 2021, versus $60.53 million for the period ended Dec. 31, 2020. Furthermore, its total current assets came in at $332.62 million, compared to $80.36 million, for the same period in the prior year.
For its fiscal year 2022, analysts expect LTCH's revenue to be $86.62 million, representing a 109.4% year-over-year rise. Its EPS is expected to increase 49.7% per annum for the next five years. The stock closed yesterday's trading session at $3.60. Wall Street analysts expect the stock to hit $7.44 in price in the near term, which indicates a potential 106.7% upside.
Casa Systems, Inc. (CASA)
CASA, an Andover, Mass.-based communications technology company, provides solutions for next-generation physical, virtualized, and cloud-native architectures for cable broadband, fixed-line broadband, and wireless networks in North America, Latin America, the Asia-Pacific, Europe, the Middle East, and Africa.
On Feb. 24, 2022, Scott Bruckner, CASA's Chief Financial Officer, said, "We delivered year-over-year top-line growth, closed the year with a large cash balance, increased our working capital, and further reduced our debt. We entered fiscal 2022 with the financial flexibility to navigate the near-term supply chain headwinds while also continuing to support our growth and transition to software."
CASA's wireless product revenue came in at $54.15 million for the fourth quarter, ended Dec. 31, 2021, up 12.2% year-over-year. Its net other income was $1.31 million, up 141.1% year-over-year. In addition, its total liabilities and stockholders' equity was $468.71 million for the period ended Dec. 31, 2021, compared to $492.97 million for the period ended Dec. 31, 2020.
CASA's revenue is expected to be $85.79 million, increasing at the rate of 8.5% for the quarter ended June 30, 2022. Its EPS is estimated to increase by 76.9% to $0.23 in 2022. The stock closed yesterday's trading session at $4.26. Wall Street analysts expect the stock to hit $7.00 in the near term, which indicates a potential 64.3% upside.
mCloud Technologies Corp. (MCLD)
Headquartered in Vancouver, Canada, MCLD, is a technology company that provides asset management platform solutions that combine IoT, artificial intelligence (AI), and cloud in North America, the Asia-Pacific, Europe, the Middle East, Africa, Australia, and China.
On Jan. 25, 2022, MCLD agreed with Aramco to explore the co-development of a digital technology hub to deliver ESG solutions in the Kingdom of Saudi Arabia. Russ McMeekin, MCLD President and CEO, said, "This MOU with Aramco is the largest, most ambitious agreement signed by mCloud to date and is the basis for tremendous growth and innovation."
MCLD's revenue came in at CAD7.34 million ($5.74 million) for the third quarter ended September 30, 2021, up 19.5% year-over-year. Its gross profit came in at CAD4.48 million ($3.50 million), up 15.8% year-over-year. And the company's cash and cash equivalents were CAD 1.32 million ($1.04 million) for the period ended Sept. 30, 2021, compared to CAD1.11 million ($868,960) for the period ended Dec. 31, 2020.
MCLD stock closed yesterday's trading session at $3.75. Wall Street analysts expect the stock to hit $9.00 in the near term, which indicates a potential 140% upside.
NOK shares rose $0.12 (+2.47%) in premarket trading Friday. Year-to-date, NOK has declined -20.10%, versus a -9.75% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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