A stock that trades at less than twenty dollars per share might initially seem like a runt in the tech sector. After all, the five FAANG stocks all trade at hundreds or even thousands of dollars per share.

However, market prices are superficial and misleading, since a company's true value is pinned to its market cap and valuations. That being said, there are lots of underappreciated tech stocks under the $20 threshold -- arguably because they aren't as closely monitored as higher-priced stocks.

Let's examine three of those stocks -- Sierra Wireless (NASDAQ:SWIR), LG Display (NYSE:LPL), and Zynga (NASDAQ:ZNGA) -- and see why they might be worth buying.

A $20 bill stuck between two gears.

Image source: Getty Images.

1. Sierra Wireless

Sierra Wireless is the world's largest manufacturer of embedded M2M (machine-to-machine) networking modules and gateways, which enable devices to communicate with each other across wireless networks. Sierra has gobbled up smaller chipmakers to boost its market share over the past few years, and it divested its weaker units -- including its automotive segment -- to streamline its business.

Sierra's modules are widely used in smart meters, security systems, utilities, emergency response vehicles, and transit agency vehicles. Its modules can operate across more than 80 different types of networks in over 130 countries -- and it has shipped over 160 million devices to date.

Sierra's revenue dipped 18% to $448.6 million last year as it struggled with pandemic-related disruptions, lower module sales to the mobile computing market, and tighter component supplies. Its adjusted net loss widened from $6 million to $51 million.

Those numbers may look ugly, but Sierra's stock actually rallied nearly 50% over the past 12 months as investors looked toward its post-pandemic recovery. Wall Street expects its revenue to rise 8% this year and for the company to post a narrower loss as the pandemic passes and the 5G market expands.

That recovery might seem sluggish, but Sierra's stock trades at just 1.5 times this year's sales which makes it a cheap play on the ongoing expansion of the Internet of Things (IoT) market.

2. LG Display

LG Display is one of the world's largest manufacturers of TFT-LCD and OLED screens for IT devices, computers, mobile devices, and TVs.

A PC gamer plays a game.

Image source: Getty Images.

The South Korean company's revenue rose 3% to 24.2 trillion Korean won ($20.8 billion) last year. Its revenue declined in the first half of the year as it grappled with pandemic-related disruptions, but grew again in the second half of the year as stay-at-home trends boosted sales of PCs, TVs, and other devices. Its net loss narrowed significantly, from 2.83 trillion won ($2.45 billion) to 89.3 billion won ($77.2 million), as it turned profitable again in the second half of the year.

Analysts expect LG Display's revenue to rise 37% this year as demand for new mobile devices, phones, and TVs boost LCD and OLED prices. It's also expected to generate a full-year profit. Based on those expectations, LG Display's stock trades at a mere eight times forward earnings -- making it an inexpensive way to profit from the growing demand for display panels worldwide.

3. Zynga

Zynga -- the mobile game maker that publishes CSR Racing, Empires & PuzzlesWords with Friends, Zynga Poker, and other popular games -- gained a lot of gamers during the pandemic. The company also acquired two other game makers, Peak and Rollic, last year.

Zynga's revenue surged 49% to $1.97 billion in 2020, marking its highest annual growth rate ever, as its bookings jumped 45% to $2.3 billion. Its revenue from paying users rose 59% to $1.67 billion, as the number of mobile monthly active users -- buoyed by its acquisitions of Peak and Rollic -- more than doubled to 134 million.

Those acquisitions led to Zynga posting a net loss of $429 million in 2020 compared to a net profit of $42 million in 2019. But its adjusted EBITDA -- which excludes those expenses, its stock-based compensation, and other one-time costs -- tripled to $266 million. Wall Street expects Zynga's revenue to rise 29% this year, and for its adjusted earnings to improve 14%.

Like other gaming companies, Zynga's growth is expected to decelerate as the pandemic passes. But its new titles -- which include Peak's Toy Blast and Toon Blast, Rollic's "hyper-casual" games, and a new Harry Potter game -- could keep gamers engaged long after the crisis ends. Therefore, Zynga's stock could still be a bargain at 22 times forward earnings.

 
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.