4 High-Growth Tech Stocks With Impressive Profitability

by: Kapitall

Looking to add some growth to your portfolio? For a closer look at some high-growth stocks from the tech sector, we ran a screen.

We began by screening the tech sector for stocks with high growth projections, with 5-year projected EPS growth above 15%.

We then screened for those with strong profitability compared to industry peers, with higher gross, operating, and pretax margins than their industry averages by at least 5% on each margin. This indicates that these companies are taking a greater percentage of their revenues as profits, and they also have stronger control over their cost structures.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these companies will meet their high growth projections? Use this list as a starting point for your own analysis.

List sorted by difference between pretax profit margin and industry average.

1. CEVA Inc. (NASDAQ:CEVA): Engages in designing and licensing silicon intellectual property for the handsets, portable multimedia, and consumer electronics markets. Market cap at $394.21M, most recent closing price at $16.89. 5-year projected EPS growth at 29.14%. TTM gross margin at 94.86% vs. industry average at 60.13%. TTM operating margin at 30.32% vs. industry average at 22.39%.TTM pretax margin at 35.81% vs. industry average at 20.73%.

2. OYO Geospace Corp. (OYOG): Engages in designing and manufacturing instruments and equipments used in the acquisition and processing of seismic data; and in the characterization and monitoring of producing oil and gas reservoirs. Market cap at $709.3M, most recent closing price at $109.70. 5-year projected EPS growth at 37.00%. TTM gross margin at 47.15% vs. industry average at 34.22%. TTM operating margin at 27.22% vs. industry average at 18.28%.TTM pretax margin at 27.67% vs. industry average at 13.88%.

3. F5 Networks, Inc. (NASDAQ:FFIV): Provides technology that optimizes the delivery of network-based applications, and the security, performance, and availability of servers, data storage devices, and other network resources in the Americas, EMEA, Japan, and the Asia Pacific. Market cap at $10.19B, most recent closing price at $128.04. 5-year projected EPS growth at 20.59%. TTM gross margin at 84.51% vs. industry average at 59.85%. TTM operating margin at 30.99% vs. industry average at 19.58%.TTM pretax margin at 31.67% vs. industry average at 19.22%.

4. Zygo Corporation (NASDAQ:ZIGO): Designs, develops, and manufactures ultra-high precision measurement solutions to enhance its customers' manufacturing yields; and optical sub-systems and components for original equipment manufacturers and end-user applications in the United States and internationally. Market cap at $352.05M, most recent closing price at $19.47. 5-year projected EPS growth at 18.00%. TTM gross margin at 52.16% vs. industry average at 36.2%. TTM operating margin at 17.9% vs. industry average at 9.44%.TTM pretax margin at 17.18% vs. industry average at 10.45%.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

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