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Highlights:
- CGI Inc. (TSX: GIB.A) reported a Q4 2022 revenue of C$ 3.25 billion.
- Open Text Corp. has a market cap of US$ US$ 10.37 billion.
- BlackBerry’s (TSX:BB) total revenue in Q2 2023 was US$ 162 million.
Technology is one of the contributing sectors in TSX. However, this fiscal has been different, as the equity market has seen great volatility since the start of 2022.
Due to a slew of macroeconomic headwinds, including the Russia-Ukraine crisis, global supply chain woes, the fastest inflation in decades, and the Central Bank’s hawkish monetary policies to rein in price rise, the stock market has remained unstable throughout the year, sending major stocks plunging.
Yet, some sectors like technology cannot be overlooked even during market upheavals. Technology stocks are a mix of companies dealing in products and services based on IT, from PCs, mobile phones, or IoT devices, enterprise or artificial intelligence software, etc.
Some TSX tech stocks include- CGI Inc. (TSX: GIB.A), Open Text Corporation (TSX: OTEX), BlackBerry Limited (TSX:BB), Absolute Software Corporation (TSX:ABST), and Constellation Software Inc. (TSX:CSU). However, investors must be very careful when putting their bets on any stock.
Amid all these discussions, we look at five tech stocks and analyze how they have performed in the latest quarter:
CGI Inc. (TSX: GIB.A)
CGI Inc. is a Canadian IT services provider in North America and Europe. The employee strength of CGI is more than 90,000, working from 400 offices in 40 nations.
CGI offers consulting, application maintenance, systems integration, and business process services.
The C$ 27.62 billion company had an earnings-per-share (EPS) of 6.13. Its price-to-earnings (P/E) ratio was 18.9 at the time of writing.
CGI posted revenue growth of eight per cent year-over-year (YoY) in its fourth quarter 2022 results. It was recorded at C$ 3.25 billion on a constant currency basis. Its net earnings also saw a 4.7 per cent YoY surge to C$ 362.4 million. The tech company’s adjusted EBITDA was reported at C$ 521.7 million, up 5.7 per cent YoY.
Open Text Corporation (TSX:OTEX)
Open Text Corp is a Canada-based tech company that helps clients aggregate, archive, retrieve, and search unstructured information. The Open Text Corp platform serves clients around the world.
The Ontario-headquartered company holds a dividend yield of 3.478 per cent. It distributed a quarterly dividend of US$ 0.243, with three-year dividend growth of 9.5 per cent. The US$ 10.37 billion market valuation company has an EPS of 0.68, while its P/E ratio stands at 56.7.
Open Text Corp reported its first quarter fiscal 2023 financial results on November 3, 2022, posting total revenue of US$ 852 million, compared to US$ 832.3 million in the year-ago quarter.
The company’s operating cash flows in the reported quarter were US$ 132 million, and free cash flows were US$ 96 million.
It achieved cloud revenues of US$ 404.7 million in Q1 2023, which was up 13.5 per cent YoY or a growth of 16.9 per cent on a constant currency basis.
The OTEX reached its 52-week highest price of US$ 61.90 on December 29, 2021, while tanking to its lowest price of US$ 34.72 on October 13, 2022.
BlackBerry Limited (TSX:BB)
BlackBerry is among the largest smartphone manufacturer in the world. However, it is now exclusively a software provider, helping enterprises achieve end-to-end secure communication. It serves the government sector, the industrial market, the medical sector, and the automotive sector.
In the second quarter of fiscal 2023, BlackBerry reported total revenue of US$ 168 million. The company’s IoT (Internet of Things) revenue and Cybersecurity revenue were US$ 51 million and US$ 111 million respectively. It said that in the reported quarter, the non-GAAP basic loss apiece was US$ 0.05 while the GAAP basic loss per share was US$ 0.09.
The total revenue in Software and Services was posted at US$ 162 million in Q2 2023. Meanwhile, the total cash, cash equivalents, of the US$ 3.46 billion company’s short-term and long-term investments were US$ 699 million in the second quarter of FY23.
Absolute Software Corporation (TSX:ABST)
Absolute Software helps clients develop, market, and provide cloud-based endpoint solutions. The company’s revenue is regenerated from businesses in the US and Canada. Its two primary sources of revenue include subscription and support services.
With a dividend yield of 2.52 per cent, Absolute Software paid a quarterly dividend of C$ 0.08 per share. It has a market cap of C$ 663.53 million.
In the starting quarter of fiscal 2023, Absolute Software posted a revenue of C$ 53.6 million compared to C$ 43.7 million in the previous year's first quarter.
The company's net loss in Q1 2023 was C$ 9.5 million versus C$ 7.6 million in the year-ago quarter. The company’s adjusted EBITDA in the reported quarter was C$ 11.5 million compared to C$ 12.8 million in Q1 2022. The company said its financial outlook for the fiscal year 2023 is unchanged from its previous financial results report.
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Constellation Software Inc. (TSX:CSU)
The Canada-based company Constellation Software Inc, operates in North America, South America, Australia, Europe, and Africa. The company that develops and customizes software for the public and private, Constellation Software, holds a market value of US$ 44.26 billion.
Constellation paid a quarterly dividend of US$ 1 per share with a dividend yield of 0.263 per cent. The next dividend is slated to be distributed on January 11, 2023.
The company's EPS was 29.68, while its P/E ratio was 70.4 at the time of writing.
In its Q3 2022 financial results, Constellation Software achieved a net income of US$ 136 million or US$ 6.42 on a diluted per share basis.
The company’s revenue saw a jump of 33 per cent to US$ $1,725 million compared to US$ $1,299 million in the year-ago quarter.
Bottom line
Investing in 2022 is challenging, irrespective of sectors, technology, retail, or financials. Investors have become wary of losing money in a highly volatile stock market. However, those with a long-term strategy and diversification could be safe from losing money in the short term. Always do a thorough market analysis before deciding on your stocks.
Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
