Although the tech sector has been recovering recently, it is still underperforming the market by some distance in 2021.
While this is disappointing for investors with overweight exposure to the sector, it could be a buying opportunity for others.
Two ASX tech shares that are still trading notably lower than their 52-week highs and have been given buy ratings are listed below. Here's what you need to know about them:
Appen Ltd (ASX: APX)
Despite a recent improvement, this artificial intelligence (AI) data annotation products and solutions provider's shares are down 68% from their 52-week high.
This has been driven partly by concerns over softer than expected demand for its services from some of its largest customers due to COVID-19 headwinds. This has led to doubts that it will be able to achieve its guidance in FY 2021, particularly with management expecting a sizeable skew to the second half.
Nevertheless, the company remains positive on its longer term prospects thanks to its leadership position in a growing market.
Ord Minnett also appears positive on its future. The broker has a buy rating and $24.75 price target on the company's shares.
Kogan.com Ltd (ASX: KGN)
The Kogan share price has been sold off this year and is now down 58% from its 52-week high. Investors have been selling the ecommerce company's shares after its incredible sales and profit growth came to an abrupt end.
This has been caused by management's failure to handle its inventory efficiently during the pandemic. It loaded up on product and was left with excessive inventory on its hands when demand softened again. Things gots so bad at one stage it was paying millions in demurrage charges for inventory stuck at ports because it ran out of room in its warehouses.
While this is very disappointing, these issues are only expected to be temporary. As a result, this recent weakness in the Kogan share price could be a buying opportunity for long term focused investors.
Analysts at Canaccord Genuity appear to believe this is the case. They currently have a buy rating and $14.00 price target on its shares.
