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3 Tech Stocks Still Trading at Big Discounts to Buy in June

Today’s episode of Full Court Finance at Zacks explores the wider stock market to start June as Wall Street officially moves beyond the debt-ceiling fears. The episode then dives into three large-cap technology stocks—Intuit Inc. (INTU), Garmin (GRMN), and Paycom Software (PAYC)—with strong histories of outperformance over the last roughly 10 years and solid growth outlooks that are still trading at least 40% below their record highs.

After weeks of back and forth and constant headlines about the debt ceiling and the possibility of default, the powers that be in Washington finally passed a deal. Now Wall Street can get back to focusing on the economy, earnings, inflation, and interest rates.

Despite the hot May jobs report on Friday, stocks climbed and Wall Street is rather convinced that the Fed will pause in June. The S&P 500 is now up over 11% in 2023, with Nvidia and a handful of other mega-cap giants driving a large portion of those gains.

The big winners have somewhat hidden the fact that many large-cap technology stocks have yet to truly participate in the rally. Investors who can stomach some near-term uncertainty might be well-served to start buying some of these beaten-down tech names at levels that might very well prove to be big discounts months or years down the line.

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Intuit (INTUspent the covid boom beefing up its portfolio beyond TurboTax and other financial services software to include email marketing, digital-ad services, CRM tools, credit scores, and other personal financial services. INTU now owns Credit Karma and Mailchimp and it is poised to extend its streak of double-digital revenue growth to nine years running, based on our FY23 and FY24 estimates.

Zacks Investment Research
Zacks Investment Research


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Intuit is projected to post 19% adjusted earnings growth in FY23 and 10% higher EPS in FY24. The company also pays a dividend, and 19 of the 21 brokerage recommendations Zacks has for INTU are “Strong Buys.”

Despite its expanded portfolio of key software offerings, Intuit trades nearly 40% below its peaks. INTU might also be ready to finally break out of the trading range it has been stuck in for most of the last year. And it’s worth stressing that INTU shares are still up 625% over the last 10 years vs. the Zacks Tech sector’s 260%.

Garmin Ltd. (GRMN) is best known for its consumer-centric GPS systems that range from in-car navigation to fitness wearables and smartwatches. On top of Garmin’s everyday consumer electronics, it sells high-end fish finders, advanced radars and systems for boats and airplanes, and beyond. Garmin’s revenue and earnings slipped in 2022 as they came up against a tough stretch of growth, including 19% sales expansion in FY21.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Garmin beat our Q1 FY23 earnings and revenue estimates in early May and it provided upbeat guidance to help GRMN land a Zacks Rank #2 (Buy) right now. Garmin is projected to return to sales and EPS growth in 2023 and then jump even higher next year.

Garmin has outpaced the S&P 500 in the last 10 years yet it currently trades 40% below its 2021 records. Garmin’s valuation levels are rather enticing and it is trading well above its 50-day moving average, following its post-release spike. And GRMN’s dividend yields 2.8% right now.  

Paycom Software, Inc. (PAYCwas one of the first web-based HR and payroll technology companies. Paycom has been expanding its offerings for over 20 years to help companies, HR departments, and employees via streamlined and user-friendly offerings for payroll, hiring, and beyond. Paycom’s software often becomes embedded and essential at companies big and small, and its decade of impressive double-digit revenue growth backs up its value and critical nature.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Paycom surpassed our Q1 earnings and revenue estimates in early May and it announced that it would start paying a dividend. PAYC’s decision to start paying a dividend appears even more beneficial to shareholders considering that it is still projected to post 25% revenue and earnings growth this year and 21% higher sales and EPS in 2024.

Paycom stock has skyrocketed since its 2014 IPO. But PAYC is now down over the last three years to trade nearly 50% beneath its record highs. 

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Garmin Ltd. (GRMN) : Free Stock Analysis Report

Intuit Inc. (INTU) : Free Stock Analysis Report

Paycom Software, Inc. (PAYC) : Free Stock Analysis Report

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