12 Best Small Cap Tech Stocks to Buy

10. NCR Voyix Corp. (NYSE:VYX)

Market Capitalization as of September 11: $1.74 billion

Number of Hedge Fund Holders: 43

NCR Voyix Corp. (NYSE: VYX) is a leading global provider of digital commerce solutions, specializing in transforming retail stores, restaurant systems, credit unions, and digital banking experiences through its comprehensive platform-led SaaS and services capabilities, helping businesses enhance their customer interactions and operations using technology. It serves over 800 banks and credit unions in the U.S., including nearly 21 million active users.

The company’s revenue fell by 55.89% year-over-year in Q2 2024. The earnings per share were $0.09. NCR Voyix Corp. (NYSE:VYX) is selling its digital banking segment, which could boost performance. It will be divested to Veritas Capital for a $2.45 billion purchase price, plus up to $100 million of contingent consideration. By the end of 2023, this segment had a revenue of $579 million, employing over 1,600 employees across 7 global facilities and ~1,300 financial institutions in North America.

It recently partnered with Ennoconn Corp., a leading hardware provider for both point-of-sale and self-checkout. The company also implemented a multiphase cost-alignment program, which began with the elimination of approximately 800 staff globally, at the end of Q2.

The company’s recent performance has not been spectacular, but these issues are being resolved — a sale could be a positive move in this direction. The full-year guidance for 2024 was updated to remove the revenue associated with the Digital Banking business. 43 hedge funds still hold long positions in the company, with a collective 6,286,029 shares. The highest stake amounts to $77,632,458, held by Engaged Capital.

ClearBridge Mid Cap Strategy stated the following regarding NCR Voyix Corporation (NYSE:VYX) in its first quarter 2024 investor letter:

“Stock selection in the IT sector also weighed on performance. Investor excitement for AI has driven outperformance in hypergrowth companies but weighed on several of our holdings with more conservative outlooks, which are typically appropriate this early in the year. This included NCR Voyix Corporation (NYSE:VYX), which provides software, consulting and technology services for digital commerce and automatic teller machines (ATMs). Under new direction since the spinoff of NCR Atleos in the fourth quarter of 2023, the stock is still looking for solidification of its investor base. However, we are encouraged by the company’s focus on recurring revenue streams, which should allow it to grow at an attractive pace. Additionally, we believe that NCR Voyix’s current valuation is approximately equivalent to the value of its digital banking segment alone, which should merit further upward price movement.”