Last year was record-breaking in terms of initial public offerings (IPOs) because low interest rates encouraged many companies to make their stock market debuts and a record number of IPOs hit the market. According to a Stock Analysis report, there were 1,035 IPOs in the U.S. stock market in 2021, a record. Also, according to IPO watchers at Renaissance Capital, IPOs in the United States raised more than $142 billion in proceeds last year.
Tech stocks have seen a significant decline in prices since the beginning of the year due to their high valuations and investors’ concerns about rising interest rates. Nevertheless, the tech industry is expected to grow as enterprises increasingly invest in technological advancements to stay relevant in a fast-changing business environment.
Given this backdrop, we think investors could look to add recently debuted quality tech stocks Marqeta, Inc. (MQ), GLOBALFOUNDRIES Inc. (GFS), and Braze, Inc. (BRZE) to their watchlists because Wall Street analysts expect these stocks to rally more than 50% in price over the next 12 months.
Marqeta, Inc. (MQ)
MQ in Oakland, Calif., operates a cloud-based open application programming interface platform named Marqeta Platform that enables businesses to develop modern, frictionless payment card experiences for consumer and commercial use cases that are either the core of or in support of their core business. The company made its stock market debut on June 9, 2021.
On Feb. 15, 2022, MQ announced a partnership with Plaid to simplify ACH transfers. This technology should enable MQ’s customer cardholders to easily initiate ACH transactions to send money between customers and external accounts. MQ’s COO Vidya Peters said, “By partnering with Plaid, we are building on the capabilities of modern card issuing that make it easier for our customers to build innovative card programs that allow their businesses to thrive.”
MQ’s net revenue increased 76.2% year-over-year to $155.41 million for the fourth quarter, ended Dec. 31, 2021. The company’s gross profit increased 107.9% year-over-year to $75.79 million. And its adjusted EBITDA came in at $1.16 million, compared to an adjusted EBITDA loss of $2.62 million.
Analysts expect MQ’s EPS and revenue for its fiscal year 2022 to increase 36.4% and 36.7%, respectively, year-over-year to $0.29 and $707.13 million. Over the past six months, the stock has declined 60.4% in price to close the last trading session at $10.87. However, Wall Street analysts expect the stock to hit $16.62 in the near term, indicating a potential upside of 52.9%.
GLOBALFOUNDRIES Inc. (GFS)
GFS in Malta, N.Y., operates as a semiconductor foundry worldwide. It manufactures a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, power management units, and microelectromechanical systems offering mainstream wafer fabrication services and technologies. Its shares began trading on Oct. 28, 2021.
On Dec. 23, 2021, GFS announced that it had agreed to amend its Wafer Supply Agreement with AMD to increase the volume of chips GFS will supply, along with an extension of the agreement’s terms to run through 2025. GFS CEO Tom Caulfield said, “Our amended agreement with AMD is a prime example of our customers’ desire and willingness to secure long-term supply. This agreement not only increases the volume of chips we will be producing for AMD, it also secures and extends their supply through 2025.”
For its fiscal fourth quarter, ended Dec. 31, 2021, GFS’ revenue increased 73.9% year-over-year to $1.84 billion. The company’s adjusted net income came in at $98 million, compared to an adjusted net loss of $524 million. Also, its adjusted EBITDA increased 251.8% year-over-year to $584 million, and its adjusted EPS came in at $0.18, compared to a $1.05 adjusted loss per share.
For its fiscal year 2022, GFS’ EPS and revenue are expected to increase 3,720% and 18.8%, respectively, year-over-year to $1.81 and $7.82 billion. Over the past month, the stock has declined 30.7% in price to close the last trading session at $53.19. However, Wall Street analysts expect the stock to hit $82.42 in the near term, indicating a potential upside of 54.9%.
Click here to checkout our Semiconductor Industry Report for 2022
Braze, Inc. (BRZE)
BRZE is a customer engagement platform provider that enables customer-centric interactions between consumers and brands. Its platform helps brands listen to their customers, understand them, and act on that understanding in a human and personal way. The New York City company made its stock market debut on Nov. 17, 2021.
On March 28, 2022, BRZE announced a series of new products and enhancements called Braze for Commerce that enable retail and e-commerce marketers to increase their sales. Senior VP, Product at BRZE Kevin Wang said, “Braze for Commerce combines turnkey e-commerce integrations with the flexibility to orchestrate retail journeys across various native channels, allowing customers to create new and effective buying experiences.”
BRZE’s revenue increased 58.5% year-over-year to $238 million for its fiscal year ended Jan. 31, 2022. The company’s subscription revenue increased 57.1% year-over-year to $221.70 million. Also, its non-GAAP gross margin came in at 67.9%, compared to 64.1% in the year-ago period. In addition, its non-GAAP net loss per share narrowed to $0.85, compared to $1.35 in the year-ago period.
Analysts expect BRZE’s EPS for its fiscal year 2023 to increase 22.9% year-over-year to $0.64. Its revenue for its fiscal year 2022 is expected to increase 39.4% year-over-year to $331.86 million. Over the past month, the stock has gained 18.4% in price to close the last trading session at $45.32. However, Wall Street analysts expect the stock to hit $68.64 in the near term, indicating a potential upside of 51.4%.
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MQ shares rose $0.22 (+2.02%) in premarket trading Thursday. Year-to-date, MQ has declined -35.06%, versus a -5.27% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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