7 Low-Debt, High-Growth Small Cap Tech Stocks

by: ZetaKap

Not every investor is risk averse. Some people thrive on investing in small caps because the capacity for growth is great. Today we cultivated a list for brave investors who do not shy away from riskier opportunities. We ran a scan of small cap tech stocks to find companies that are projected for big growth in the coming year. They all have EPS growth rates that are well above 25%. In addition, they all have minimal debt which means the focus will remain on growth. We think you will enjoy reviewing the summaries and graphs to learn more about these small cap tech stocks.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.

The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.

The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.

We first looked for small cap technology stocks. We then looked for companies with estimated high-growth, with 1-year projected EPS growth above 25%. We then looked for businesses that have maintained a sound long term capital structure (Long Term D/E Ratio<.1). We then looked for businesses that operate with little to no debt (D/E Ratio<.1).

Do you think these small-cap stocks should have higher valuations? Use this list as a starting-off point for your own analysis.

1) VirnetX Holding Corp (NYSEMKT:VHC)

Sector Technology
Industry Internet Software & Services
Market Cap $1.35B
Beta 1.69

VHC stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate 110.40%
Long Term Debt/Equity Ratio 0.00
Debt/Equity Ratio 0.00
Short Interest 33.55%

VirnetX Holding Corporation develops software and technology solutions for securing real-time communications over the Internet. The company's software and technology solutions include domain name registry and GABRIEL Connection Technology, which provide security platform for Internet-based applications, such as instant messaging, voice over Internet protocol, mobile services, streaming video, file transfer, and remote desktop. It also intends to provide a portfolio of licenses and services comprising VirnetX technology; GABRIEL Connection Technology software development kit, including object libraries, sample code, and testing and quality assurance tools, as well as documentation support services required by customers to implement the company's technology; domain name registrar service; technical support; and secure domain name master registry and connection services. The company serves original equipment manufacturers in the Internet protocol telephony, mobility, fixed-mobile convergence, and unified communications markets. VirnetX Holding Corporation was founded in 2005 and is headquartered in Zephyr Cove, Nevada.


Sector Technology
Industry Application Software
Market Cap $419.55M
Beta 1.31

DTSI stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate 102.17%
Long Term Debt/Equity Ratio 0.00
Debt/Equity Ratio 0.00
Short Interest 10.32%

DTS, Inc. provides audio technologies that are incorporated into various consumer electronics devices worldwide. Its audio technologies enable the delivery and playback of clear and compelling high-definition audio. The company's technologies are used in various product applications, including audio/video receivers, soundbars, Blu-ray disc players, DVD based products, personal computers, car audio products, video game consoles, network capable televisions, digital media players, set-top-boxes, mobile phones, tablets and home theater systems.

It also offers products and services to motion picture studios, radio and television broadcasters, game developers, and other content creators to facilitate the inclusion of compelling and realistic DTS-encoded soundtracks in their content. In addition, the company provides a suite of audio processing technologies to enhance the entertainment experience in televisions, personal computers, and mobile electronics. It serves home audio/video, automotive, PC, broadcast, mobile electronics, professional content, and other consumer electronics markets. The company was formerly known as Digital Theater Systems, Inc. and changed its name to DTS, Inc. in May 2005. DTS, Inc. was founded in 1990 and is headquartered in Calabasas, California.

3) OCZ Technology Group, Inc. (NASDAQ:OCZ)

Sector Technology
Industry Data Storage Devices
Market Cap $378.16M
Beta -

OCZ stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate 763.64%
Long Term Debt/Equity Ratio 0.00
Debt/Equity Ratio 0.00
Short Interest 36.92%

OCZ Technology Group, Inc. engages in the design, manufacture, and distribution of solid state drives (SSDs) and computer components primarily in the United States, Canada, Germany, the Middle East, Africa, and other European countries. It specializes in high-speed memory in the enterprise and consumer SSD markets, a technology that competes with traditional rotating magnetic hard disk drives. The company sells its products directly to enterprise customers and original equipment manufacturers through its direct sales force; and to other end customers through a channel of systems integrators, information technology, integrators, and fulfillment and retail distributors. OCZ Technology Group, Inc. was founded in 2002 and is headquartered in San Jose, California.

4) ServiceSource Corporation (NASDAQ:SREV)

Sector Technology
Industry Business Software & Services
Market Cap $674.19M
Beta -

SREV stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate 100.00%
Long Term Debt/Equity Ratio 0.00
Debt/Equity Ratio 0.01
Short Interest 12.36%

ServiceSource International, Inc. manages the service contract renewals process of maintenance, support and subscription agreements for technology and technology-enabled healthcare, and life sciences companies. The company provides end-to-end management and optimization of the service contract renewals process, including data management, quoting, selling, and service revenue business intelligence. It offers an integrated solution that consists of Service Revenue Intelligence Platform, a data warehouse of transactional, analytical, and industry data that provides insight into the business; service sales teams working under its customers' brands; and Service Revenue Performance Suite, a suite of cloud applications.

The company's cloud applications include Analytics Cloud, which provides customers with dashboards to view and analyze service revenue performance; Service Sales Cloud that provides renewals analytics and pipeline management used by service sales teams; and Channel Sales Cloud, which offers channel partners and resellers with online access to their specific renewals opportunities and their performance. The company sells its solutions directly through sales representatives in North America, Latin America, Europe, the Middle East, Africa, the Asia Pacific, and Japan. ServiceSource International, Inc. was founded in 2002 and is headquartered in San Francisco, California with additional offices in Colorado, Tennessee, Ireland, the United Kingdom, Malaysia, and Singapore.

5) Glu Mobile, Inc. (NASDAQ:GLUU)

Sector Technology
Industry Multimedia & Graphics Software
Market Cap $310.16M
Beta 2.41

GLUU stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate 666.70%
Long Term Debt/Equity Ratio 0.00
Debt/Equity Ratio 0.00
Short Interest 22.01%

Glu Mobile Inc. designs, markets, and sells mobile games worldwide. It develops original games based on its intellectual property comprising Big Time Gangsta', Blood & Glory, Bug Village, Contract Killer, Contract Killer: Zombies, Eternity Warriors, Frontline Commando, Gun Bros, Men vs. Machines, Stardom: The A-List, Super K.O. Boxing and Toyshop Adventures. The company also develops games based on licensed intellectual property consisting of Build-a-lot, Call of Duty, Deer Hunter, DJ Hero, Guitar Hero, Family Feud, Family Guy, Lord of the Rings, Paperboy, The Price Is Right, Transformers, Who Wants to Be a Millionaire?, and World Series of Poker. It offers a portfolio of action/adventure and casual games to smartphones and tablet devices users through direct-to-consumer digital storefronts, as well as to feature phone users served by wireless carriers and other distributors. The company was formerly known as Sorrent, Inc. and changed its name to Glu Mobile Inc. in May 2005. Glu Mobile Inc. was incorporated in 2001 and is headquartered in San Francisco, California.

6) AuthenTec, Inc. (NASDAQ:AUTH)

Sector Technology
Industry Semiconductor - Specialized
Market Cap $359.66M
Beta 1.32

AUTH stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate 133.33%
Long Term Debt/Equity Ratio 0.00
Debt/Equity Ratio 0.00
Short Interest 7.17%

AuthenTec, Inc. provides mobile and network security solutions for enterprise, government, and consumer markets worldwide. The company operates in two segments, Smart Sensor Solutions and Embedded Security Solutions. The Smart Sensor Solutions segment designs, develops, and sells mixed-signal fingerprint sensor semiconductors primarily used in the personal computer and mobile device markets; touch-based sensors for government and access control applications; sensors that enable users to access and control various functions on an electronic device; fingerprint sensor chipsets and modules; USB fingerprint readers; and identity management software. The company primarily sells its products through direct sales force, independent sales representatives, and distributors to original equipment manufacturers, original design manufacturers, contract manufacturers, software application vendors, and service providers. AuthenTec, Inc. was founded in 1998 and is headquartered in Melbourne, Florida.

7) Yelp, Inc. (NYSE:YELP)

Sector Technology
Industry Internet Information Providers
Market Cap $1.33B
Beta -

YELP stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate 145.00%
Long Term Debt/Equity Ratio 0.00
Debt/Equity Ratio 0.00
Short Interest 31.64%

Yelp, Inc. operates Yelp.com, an online urban city guide that helps people find places to eat, shop, drink, relax, and play based on the informed opinions of a community of locals in the know. It offers information relating to restaurants, shopping, food, nightlife, arts and entertainment, local flavor, public services and government, active life, event planning and services, hotels and travel, beauty and spas, education, health and medical, local services, home services, religious organizations, professional services, mass media, automotive, pets, financial services, and real estate. The company serves customers in the United States, Canada, the United Kingdom, Ireland, France, Germany, Austria, the Netherlands, Spain, Italy, Switzerland, Finland, and Belgium. Yelp, Inc. was founded in 2004 and is headquartered in San Francisco, California.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/30/2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: This article was prepared for ZetaKap Media by one of our full-time analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

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