The value of a company isn't actually defined by the trading price of its stock. For example, a company with a market cap of $500 billion might be trading at $20 a share, while one with a market cap of $1 billion could be trading at $50 a share.

That said, some investors still prefer to buy round lots (100 shares) of stocks at $20 or less instead of odd lots (fewer than 100 shares) because they're easier to track. Round lots also grant them the option of selling covered calls since a single options contract is tethered to 100 shares to generate passive income from those positions.

A happy couple is showered with cash.

Image source: Getty Images.

So today, I'll take a closer look at three unloved tech stocks that are trading below that $20 threshold -- AT&T (T 2.15%), Magnite (MGNI -3.82%), and Nio (NIO) -- and explain why they'll likely head higher over the next few years.

1. AT&T

AT&T abandoned its dreams of becoming a streaming media giant like Netflix (NASDAQ: NFLX) over the past two years by divesting DirecTV, WarnerMedia, and its other non-core media assets. It subsequently focused on strengthening its core telecom business by upgrading 5G and fiber networks.

AT&T gained 2.9 million postpaid phone subscribers in 2022, while its larger competitor, Verizon (NYSE: VZ), only added 201,000 comparable subscribers. That growth continued in the first quarter of 2023 when AT&T gained another 424,000 postpaid phone subscribers as Verizon lost 127,000 comparable subscribers.

The robust growth of AT&T's mobility and consumer wireline units offset the macro-induced declines of its business wireline unit over the past year. The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins are still expanding, and it expects to generate $16 billion in free cash flow (FCF) this year. Yet AT&T only generated $1 billion in FCF in the first quarter -- which raises some concerns about its ability to juggle expansion with its rising costs.

AT&T insists its upgrade costs peaked in the first quarter, and analysts still expect its adjusted EBITDA to rise 3% this year with just 1% revenue growth. That near-term outlook may seem anemic, but its stock looks dirt-cheap at 6 times this year's adjusted EBITDA, and it still pays an attractive forward dividend yield of 6.3%.

2. Magnite

Magnite, which was born from a merger between two smaller ad tech companies in 2020, is the world's largest independent sell-side platform (SSP) for digital ads. SSPs help publishers sell their own digital ad inventories across desktop, mobile, and connected TV (CTV) platforms, and they sit at the opposite end of the ad supply chain as demand-side platforms (DSPs), which allow advertisers to bid on that ad space.

Magnite's reported growth was significantly inflated by its initial merger and some big acquisitions throughout 2020 and 2021. In 2022, its revenue rose 23% (24% after excluding traffic acquisition costs) as its adjusted EBITDA increased by 20%. However, Magnite's growth cooled off as it lapped its acquisitions and macro headwinds battered the broader advertising market.

This year, analysts expect Magnite's revenue to only rise 6% as its adjusted EBITDA dips 1%. That slowdown was mainly caused by the deceleration of its CTV business, which could quickly accelerate again once the macro situation improves.

But over the long term, Magnite still expects to grow annual revenue by more than 25% on an organic basis as it maintains adjusted EBITDA margins of 35% to 40%. That promising long-term outlook -- and the fact that Magnite trades at just 9 times this year's adjusted EBITDA -- make it a potential turnaround play in a new bull market.

3. Nio

Last but not least, the Chinese EV maker Nio barely gets any attention from U.S. investors even though it delivered 122,486 sedans and SUVs in 2022. That represented a 34% jump from 2021 -- even as it struggled with supply chain constraints. By comparison, the company's struggling American peer Rivian (NASDAQ: RIVN) only produced 24,337 vehicles last year.

Nio differentiates itself from its domestic and overseas competitors with a battery-swapping network that allows members to quickly swap out their depleted batteries for fully charged ones. That approach eliminates lengthy charging times while generating a secondary stream of a la carte and subscription-based battery revenue for the company.

Nio is still unprofitable, but narrowing its net losses while analysts expect revenue to grow at a compound annual growth rate (CAGR) of 45% from 2022 to 2025. That's a jaw-dropping growth rate for a stock that trades at just 1 times this year's sales. For reference, Rivian -- which faces a tougher uphill battle -- trades at about 2 times this year's sales.

Investors seem to be shunning Nio because delisting threats continue to hang over U.S.-listed Chinese stocks. The broader EV sector will also likely remain out of favor as long as high interest rates continue to punish unprofitable companies. Nevertheless, patient investors who can look past these near-term challenges might just strike gold with Nio.