3 Software Stocks Under $5 That Will Rally More Than 85% in 2022, According to Wall Street The rapid adoption of software solutions to automate operations and for remote working is driving the software industry's growth. In addition, technological advancements in the software field could help the...
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The rapid adoption of software solutions to automate operations and for remote working is driving the software industry's growth. In addition, technological advancements in the software field could help the sector gain further traction this year. Therefore, Wall Street analysts expect fundamentally sound software stocks Nerdy (NRDY), OppFi (OPFI), and SurgePays (SURG), which are currently trading at less than $5, to rally more than 85% in price this year. Read on.
The increased use of artificial intelligence (AI) and cloud-based platforms in nearly every industry has resulted in heightened demand for software solutions and services. In addition, growing business process automation and digitization have contributed considerably to the software industry's growth.
Furthermore, the emergence of centralized infrastructure, cloud on edge, low-code and no-code, and other trends will likely sustain the industry's momentum. Indeed, the global business software and services market is expected to grow at an 11.3% CAGR by 2028.
Given this backdrop, Wall Street Analysts expect fundamentally-sound software stocks Nerdy, Inc. (NRDY), OppFi Inc. (OPFI), and SurgePays, Inc. (SURG) to see a more than 85% gain this year.
Click here to check out our Software Industry Report for 2022
Nerdy, Inc. (NRDY)
NRDY in Fort Worth, Tex., functions as an online platform for live online learning. Their purpose-built proprietary platform leverages technology, including AI, to connect learners of various ages to experts, providing value on both sides of the network. It also provides learning experiences across various projects and multiple formats.
NRDY's revenue increased 27.3% year-over-year to $42.02 million in the fourth quarter, ended Dec. 31, 2021. Its gross profit grew 27% year-over-year to 28.66 million, while its cash and cash equivalent stood at $143.96 million for its fiscal year ending Dec. 31, 2021.
Analysts expect NRDY'S revenue to increase 41.4% year-over-year to $44.26 million for the third quarter, ending Sept. 30, 2022.
Among the seven Wall Street analysts that rated the stock, six rated it Buy, and one rated it Hold. The 12-month median price target of $8.43 indicates a 98.8% potential upside. The price targets range from a low of $5.00 to a high of $11.00. The stock closed the last trading session at $4.24.
OppFi Inc. (OPFI)
Chicago, Ill.-based OPFI runs as a financial technology platform that allows banks to offer lending products, and facilitates installment loan products, OppLoans and SalaryTap; and the credit card product, OppFi Card. In the third quarter, ended Sept. 30, 2021, OPFI's net revenue increased 18.1% year-over-year to $72.89 million. Its operating income came in at $11.51 million, while its net income increased 21.3% from its year-ago value to $30.39 million over this period. The company's EPS amounted to $1.06.
The company's revenue is expected to increase 21.6% year-over-year to $353.92 million in its fiscal year 2021.
Closing its last trading session at $3.21, the 12-month median price target of $10.00 indicates a 211.5% potential upside.
SurgePays, Inc. (SURG)
SURG in Bartlett, Tenn., is a fintech company that offers various financial services and prepaid products in the United States. The company's blockchain platform utilizes a suite of financial and prepaid products to convert corner stores into tech hubs for underbanked neighborhoods.
In January, SURG engaged international investor relations specialists MZ Group to develop its strategic investor relations and shareholder communication program, which is designed to increase the company's visibility across the investment community. "As the 2022 year begins, we are laser-focused on driving revenue growth and maximizing shareholder value," said Brian Cox, Chairman, and CEO, SurgePays.
During the third quarter, ending Sept. 30, 2021, SURG's revenue increased 13.6% year-over-year to $14.54 million. Its cash and cash equivalent stood at $0.64 million for nine months ending Sept. 30, 2021.
The stock has gained 52% in price year-to-date to close its last trading session at $3.45. Both Wall Street analysts that rated the stock rated it Buy. The 12-month median price target of $6.50 indicates an 88.4% potential upside. The price target ranges from a low of $6.00 to a high of $7.00.
Click here to check out our Software Industry Report for 2022
NRDY shares were unchanged in premarket trading Thursday. Year-to-date, NRDY has declined -5.78%, versus a -11.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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