12 Most Undervalued Tech Stocks to Invest in Now

9. Amdocs Limited (NASDAQ:DOX)

Forward P/E Ratio: 12.15

Earnings Growth: 4.97%

Number of Hedge Fund Holders: 28

Amdocs Limited (NASDAQ:DOX) is a software company that provides various tools that help businesses manage customer relationships, product life cycles, billing, and applications efficiently. Its major customers are communication and media sector businesses.

The company had a notable year in fiscal 2024. Despite facing challenges in industry demand it was still able to land significant contracts with major companies including AT&T, T-Mobile, and Vodafone Ziggo, among others, across North America, Europe, and Asia. Due to significant project wins throughout the fiscal year, Amdocs Limited (NASDAQ:DOX) reached record revenue of $5 billion, marking a 2.4% increase from the previous year. Its cloud services were a major contributor as it now accounts for 25% of its revenue.

Management is focusing on three main strategies which include cloud solutions, digital transformation for customer experience, and advancements in Generative AI technologies. To execute these strategies management on November 12, 2024, announced an enhanced amAIz platform. amAIz platform focuses on Generative AI capabilities aimed at improving customer engagement for communications service providers. The enhanced platform now includes specialized GenAI agents, such as GenAI Care and Sales Agents. These agents are designed to provide seamless customer support, handle billing inquiries, and facilitate sales interactions, thereby enhancing overall customer engagement. Moreover, its cheap valuation makes Amdocs Limited (NASDAQ:DOX) one of the most undervalued tech stocks to invest in now.

Palm Valley Capital Fund stated the following regarding Amdocs Limited (NASDAQ:DOX) in its Q3 2024 investor letter:

“The Fund’s top three contributors in Q3 were Lassonde Industries (ticker: LAS/A CN), Amdocs Limited (NASDAQ:DOX), and WH Group (ticker: WHGLY). Amdocs is one of the Fund’s larger positions. The stock appreciated during the quarter on record revenue and strong margins. The firm continues to facilitate digital and cloud migrations for the world’s leading telecommunications companies. Management has embraced the marketing opportunity from associating its services with AI (artificial intelligence), including tools used to streamline contact center call handling times. Recurring managed services revenue accounts for nearly 60% of the top line and includes agreements with many top providers such as AT&T, Vodafone, TELUS, and Charter. While the sell side sometimes seems to struggle with accepting Amdocs’ mature growth rates, we value the firm’s consistency and strong cash generation.”