The heaviest technology acts in the vicinity of its highest level ever recorded. Although most of the focus was on the high-profile FAANG group shares, including Facebook (NASDAQ :), Apple (NASDAQ :), Amazon (NASDAQ :), Netflix (NASDAQ 🙂 and Google parent alphabet (NASDAQ 🙂 , there is another important industry group in the technology room that has raised costs this year: cloud-based software.
In fact, the First Trust ISE Cloud Computing ETF (NASDAQ 🙂 has risen by around 24% since early 2019, better than the NASDAQ Composite, which won around 21% on the year.
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Below we focus on three leading names in the cloud software space, each showing one of the best opportunities for long-term growth. As well, in the wake of their last quarterly earnings reports, released earlier this week, every stock is now worth considering.
Twilio, Inc.
Twilio (NYSE :), a specialist in cloud communication systems that we have marked twice before, here and here, exceeds consensus estimates for revenues and revenues when the quarterly result following the closing bell on Tuesday was announced
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The San Francisco-based company adjusted earnings per share of 5 cents, compared to a loss of 4 cents per share in the same period last year. Turnover rose to $ 233.1 million, an impressive 81% compared to the same quarter a year earlier.
The active customer accounts of Twilio also maintained a tremendous pace of growth and increased by almost 65% on an annual basis to 154797 at the end of the quarter. "A growing number of customers around the world are rewarding us with their business because they use our platform to create better ways to connect with their customers," said Jeff Lawson, co-founder and CEO of Twilio
Twilio & # 39; s outlook for the second quarter was also bullish. It predicts sales of $ 262 million to $ 265 million. That was well ahead of consensus estimates with sales of just $ 251.5 million.
We expect that Twilio will continue to perform well in terms of customer acquisition, as it positions itself as a leader in the cloud communication space. The integration of SendGrid, the cloud-based email marketing platform that it acquired for $ 2 billion in October last year, should also offer more opportunities to grow its revenue.
Twilio shares that closed yesterday at $ 128.57, not far from the highest point of $ 141.53 ever, won 202% in the past year.
Zendesk, Inc.
Software-as-a-service company Zendesk & # 39; s (NYSE 🙂 figures and first quarter earnings figures when it reported after the bell on Tuesday, but GAAP losses were greater than expected.
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The company said it had lost 41 cents a share in the first quarter, more than a loss of 28 cents per share in the same period last year. However, Zendesk, adjusted for one-off items, earned 4 cents per share, above the estimated EPS of 3 cents. Even more impressive was that sales increased 40% from the period last year to $ 181.5 million, exceeding expectations for the sale of $ 179.5 million
Looking ahead, Zendesk's outlook for the current quarter and for the full year 2019 exceeded Wall Street targets. The San Francisco-based company said it expects sales of between $ 191 million and $ 193 million for the second quarter, compared to the $ 191.2 million consensus.
For the full year, Zendesk realizes sales of approximately $ 802 million to $ 810 million. Analysts expected $ 802.5 million.
We are growing increasingly optimistic about the software company, which was previously marked as a game with the best software sector, because it continues to build on the strong acceptance of customer relationship management (CRM) solutions. The strong demand for the flagship product Zendesk Suite, a bundled subscription-based service, should continue to make this company a good bet in the future.
Zendesk shares, rising from % in the year before, closed at $ 84.77 last night not far from its highest point ever of $ 87.92 .
Paycom Software, Inc.
Paycom (NYSE 🙂 reported for the first quarter on Tuesday evening.
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The cloud-based workforce management software package said the adjusted earnings per share was $ 1.19, an increase of 24% compared to the first quarter of 2018. Sales increased 30% to $ 199.9 million, the third consecutive quarter of 30% + sales growth. Almost everything was recurring income, the company said.
"Our strong results for the first quarter were driven by our proprietary software offering and targeted sales efforts, which means we are well positioned to achieve our performance targets for 2019," said Chad Richison, founder and CEO of Paycom.
The Oklahoma City-based company was optimistic about its outlook for the current quarter of June, and says it expects sales of $ 162.5 million to $ 164.5 million. It also delivered full annual revenue forecasts from $ 718 million to $ 720 million. The scope of both was above consensus estimates that demand Q2 sales of $ 162.6 million and annual sales of $ 712.2 million.
Despite robust profits so far this year, the Paycom stock market still looks attractive, given the strong demand for its enterprise-class human resources software solutions, making it one of the real leaders in its field. The shares closed at $ 201.46 yesterday, just below the highest value ever of $ 203.20. The share has increased by 79% in the last 12 months
