Finding the best undervalued tech stocks, ones that can outperform the broader market, is no easy task. To start off, there are no guarantees when it comes to picking winning stocks. You can make all the right selections in the beginning, but the wrong timing can curtail the company’s growth in the short term.
Secondly, we are all humans which means that you will be prone to making mistakes. One loss can lead to another, bringing you right back to square one. Lastly, without proper risk management, your ability to detach emotion from your investment decisions will be increasingly difficult. Therefore, having a well-diversified portfolio and making calculated bets only with money that you can afford to potentially lose is paramount.
Now, here are the top three undervalued tech stocks that could 5X your money in the next five years!
Shopify (SHOP)
Shopify (NYSE:SHOP) stands out as one of the top undervalued tech stocks to buy in 2024. After undergoing restructuring and cost-cutting in the 2023 fiscal year, Shopify’s liquidity profile makes it increasingly attractive at current levels.
Shopify is off to a rough start in 2024 with the stock significantly underperforming the S&P 500 Index. After closing out 2023 on a strong note, Shopify’s streak of profitability came to an end. The company reported a loss of 21 cents per share on revenue of $1.86 billion. Management’s reason was due to ongoing negative impacts of the sale of its logistics businesses in 2023. While this may seem like a drag, there were some positive notes in the report. During the quarter, gross merchandise volume (GMV) increased sequentially to $60.9 billion. Additionally, gross profit increased 33% from the year prior, with free cash flow more than doubling to $232 million. With the stock down 20% year-to-date, this dip could be a gift for long term investors bullish on the growth of e-commerce.
GigaCloud Technology (GCT)
GigaCloud Technology (NASDAQ:GCT) is another promising tech stock with enormous multibagger potential. The company’s impressive financial performance underscores its ability to provide investors with outsized returns in the next 5 years.
GigaCloud Technology is a unique software company in the tech space that has tremendous growth potential. It operates as a B2B marketplace that facilitates the distribution of suppliers and resellers in large parcel items. Primarily, this includes items such as furniture, home appliances, and fitness equipment. GigaCloud’s marketplace currently has 5,493 active buyers, 865 active sellers, 42 fulfillment facilities, and more than 10 million square feet of warehouse space. After reporting record revenue, earnings and free cash flow in FY23, growth continues to accelerate. In Q1 FY24, revenue nearly doubled year-over-year to $251 million. Net earnings rose 71% YOY to $27.2 million, with GigaCloud marketplace GMV up 64% to $908 million. As management makes strategic investments in its warehouse infrastructure, GigaCloud will remain on track for market-beating returns.
Payoneer (PAYO)
Payoneer (NASDAQ:PAYO) is the last candidate among the best undervalued tech stocks to buy now. Its continued leadership and innovation in cross-border payments, coupled with its increasing profitability makes it an ideal growth candidate in 2024.
Payoneer is an exciting fintech opportunity in 2024 that investors should not miss. The company has been a major beneficiary of the growth of gig economy, cross-border payments, and small and medium enterprises (SMEs). Its powerful platform includes a broad range of services for businesses to manage multiple currencies, access working capital, and process payments. Further, its global growth strategy aims to capitalize on untapped opportunities in emerging markets. In its 2024 SMB barometer report, it found that small- and medium-sized businesses reported nearly half of its customer base is international. By filling this gap, Payoneer can both increase its B2B transaction volume while meeting the needs of its customers. With GAAP profitability forecasted for 2024, Payoneer’s remains well positioned to outperform in the next 5 years.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
