SFTC:CC - The 1 Tech Company I'd Buy Before BlackBerry Stock Today
2023-07-14 20:00:00 ET
BlackBerry ( TSX:BB ) is a Waterloo-based company that provides intelligent security software and services to enterprises and governments around the world. Canadian readers will remember this company as the hardware giant that popularized the smartphone, particularly in the business community. BlackBerry was eventually dethroned by Apple and Android alternatives. Now, this tech stock operates in the software space. While I like BlackBerry right now, there is another tech stock that has captured my interest in the middle of July. Let’s dive in.
How has BlackBerry stock performed over the past year?
Shares of BlackBerry have dropped 4.2% month over month as of close on Thursday, July 13. This tech stock has surged 45% so far in 2023. Its shares are still down 10% in the year-over-year period. Investors can see more of its recent performance with the interactive price chart below.
BlackBerry now offers exposure to the cybersecurity and automotive software space. SkyQuest Technology Consulting recently valued the encryption software market at US$8.2 billion in 2021. The same report forecasts that this market will reach US$21.6 billion in 2028. That represents a compound annual growth rate (CAGR) of 14% over the projected period.
In the first quarter of fiscal 2023, BlackBerry posted cybersecurity revenue of $93 million. Meanwhile, cybersecurity billings rose to $122 million — up 37% compared to the previous year. This company is on track for strong revenue growth going forward. Despite that, I’m looking elsewhere for a tech stock right now.
Here’s why I’m looking to another tech stock today
Softchoice ( TSX:SFTC ) is a Toronto-based company that designs, procures, implements, and manages information technology (IT) solutions in Canada and the United States. This tech stock has jumped 1.9% month over month as of close on Thursday, July 13. Shares of Softchoice have dropped 4.6% in the year-to-date period.
The case for Softchoice in the summer of 2023
Canadian investors should be attracted to the burgeoning information technology (IT) industry in the early part of the 2020s. TBRC Business Research recently valued the Information Technology Industry at US$7.98 trillion in 2022. Moreover, the same report projects that this market will deliver a CAGR of 8.4% from 2022 through to 2032.
This company released its first-quarter fiscal 2023 earnings on May 12. Softchoice reported income from operations of $9.6 million in the first quarter — up from $3.8 million in the first quarter of fiscal 2022. Meanwhile, gross profit jumped 10% to $74.2 million. That was greatly bolstered by a big jump in its Software and Cloud solutions segment.
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. This company reported adjusted EBITDA of $14.5 million in the first quarter 2023 — up 45% compared to the prior year. That profit was powered by an increase in gross profit. Moreover, adjusted earnings per share surged 71% to $0.12.
Why I’m buying this tech stock in July
Shares of this tech stock are trading in favourable value territory compared to BlackBerry and its other industry peers at the time of this writing. Softchoice has great growth potential as we look forward. Moreover, the company recently achieved profitability and is well positioned for terrific earnings growth.
The post The 1 Tech Company I’d Buy Before BlackBerry Stock Today appeared first on The Motley Fool Canada .
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Apple. The Motley Fool has a disclosure policy .
2023