UK shares: 1 under the radar tech stock to buy in 2022!

This Fool is on the lookout for the best UK shares for his portfolio in 2022. Here’s a tech stock he believes could be set for an excellent year ahead.

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I believe tech stock GB Group (LSE:GBG) could be one UK share set for an exciting 2022. At current levels, should I consider adding theshares to my portfolio? Let’s take a look.

Data driven

GB provides personal data verification tools as well as location services, ID document inspection, and fraud prevention services such as email address verification. GB’s services are driven by cutting-edge intelligence-based software.

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As I write, shares in GB Group are trading for 694p per share. At this time last year, shares were trading for 934p, which is a 25% drop. This does not concern me. In fact, I see the current price as an opportunity to potentially add cheap shares to my portfolio. The fall in share price can be explained by a dip in demand for such products due to the pandemic. Analysts at Barclays believe GB Group shares will rise towards 1,000p.

The positives

GB Group is aiming to be a leader in its field and has the proprietary tech and strategy to succeed, in my opinion. The rise in demand for digital products and services is set to continue and therefore the demand for personal data based products will also increase.

A recent acquisition by GB Group has made me pay closer attention to it. I like when a firm I am reviewing for investment is acquiring competitors or firms to enhance its offering. It is a sign of ambition and growth. In November, GB announced it would be acquiring a US firm, Acuant. This acquisition has the potential for GB to cement itself as one of the biggest players in the identity management space in the world. The US market is extremely lucrative and this deal will only enhance its footprint in the US market.

Finally, GB’s performance recently has been positive and with the new acquisition, I expect it to continue on an upward trajectory too. In its most recent half-year report in November, GB announced that revenue grew by nearly 6% compared to the same period last year. This resulted in its small debt from last year’s half-year results turning into a healthy cash balance of £39m. Operating profit increased by 3.5% and two new products were launched to market as well.

UK shares have risks too

There are two main risks I see linked to GB that could affect progress and my investment. Firstly, competition in the tech market is intense. There are lots of large players that perhaps have a better brand recognition as well as footprint that could ramp up their identity management and data intelligence arms.

At current levels, GB shares still look a bit expensive despite dropping in recent months. There is a risk that future potential from the acquisition is already priced.

Overall, I like GB Group and think it could be a great addition to my portfolio for 2022 and beyond. It is making the necessary moves to enhance its footprint and become a market leader in its field. GB’s latest acquisition is exciting. I would not be surprised to see record results posted for the full year and its share price to increase. I would add GB Group shares to my portfolio at current levels.

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Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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