Revenues from the US tech sector have nearly declined, but the results this week are due to a large number of high-flying cloud computing software companies.
Cloud-related software ETFs are trading near their all-time high, with the First Trust Cloud Computing ETF (NASDAQ 🙂 and the Global X Cloud Computing ETF (NASDAQ 🙂 trading around 76% and 84, respectively. % are up since their March Lows, driven by a surge in demand for cloud-based offerings as the COVID-19 pandemic accelerated digitization trends for enterprises.
Below are three cloud-based tech stocks that will deliver strong earnings and revenue growth due to strong demand for their innovative products.
Each is worth considering in the run-up to their upcoming quarterly results.
1. Splunk : Reports Aug 26 After Markets Close
Splunk (NASDAQ: ) has seen its stock significantly outperform the broader market in recent months, up about 117% from its mid-March lows, as investors grew increasingly optimistic about the San Francisco, California-based company for data analysis.
The stock ended Tuesday at $ 203.62, not far from its all-time high of $ 217.33 reached on August 5, bringing the fast-growing technology company to a market cap of about $ 32.3 billion.
Splunk – reporting late May – is expected to report a loss of $ 0.33 per share for the second quarter, compared to earnings of $ 0.30 per share in the same period a year ago. Revenue is expected to increase approximately 1% from the same period a year earlier to $ 520.98 million, reflecting increased demand for the Splunk Enterprise management platform.
Perhaps more interesting: growth rates in Splunk's cloud-based segment, which increased 81% in the previous quarter to $ 112 million.
In addition to the top and bottom line numbers, market players will also pay attention to Splunk & # 39; s update regarding the additions of enterprise customers. At the end of the first quarter, there were more than 90 of the Fortune 100 companies among the company's customers.
2. Okta: Reports Aug 27 After Markets Close
Okta (NASDAQ 🙂 shares have more than doubled its mid-March lows, to 136%, as it benefits from strong demand for its cloud-based cybersecurity platform, which helps enterprises securely connect with their employees and customers.
The stock settled at $ 209.53 yesterday, in sight of its all-time high of $ 226.87 reached on August 5, giving the San Francisco, California-based company a market capitalization of approximately $ 26.1 billion .
Okta exceeded last quarter's expectations for results and related guidance. For the upcoming results, consensus calls for a loss of $ 0.02 per share for the second quarter, down from a loss of $ 0.05 per share in the same period a year ago. Revenue is expected to grow 32% from the same period a year earlier to $ 186.26 million, driven by an expected increase in the use of the Okta Identity Cloud platform.
Investors will also focus on Okta & # 39; s subscription software revenues, which rose 48% to $ 173.8 million in the last quarter amid an increase in remote working in response to the pandemic.
In addition to earnings per share and revenue, the updated outlook of the company for the remainder of the year and beyond will be closely monitored. The cloud-based identity and access management specialist increased its full-year revenue forecast to reach $ 770 million to $ 780 million in the last quarter, representing a growth of 31% to 33% year-over-year.
3. Workday: August 27 Post Closure Reports
Workday (NASDAQ :), which provides enterprise-level software solutions for financial management and human resources, its stock has soared 80% of their bear market declining in March. The Pleasanton, California-based human resources software maker, which currently counts big names like Microsoft (NASDAQ 🙂 and Salesforce (NYSE 🙂 as customers, is quickly becoming the go-to name in HR management.
The stock closed at $ 194.03 last night, approaching the record high of $ 202.00 in February. At its current level, the human capital management (HCM) company is valued at approximately $ 45.5 billion.
Although Workday made estimates in the first quarter, it exceeded revenue expectations.
For the forthcoming publication, consensus estimates call for earnings per share of $ 0.66, which would indicate 50% annual earnings per share growth. Revenue is expected to grow 17% from the same period a year earlier to $ 1.04 billion, benefiting from the move to the cloud to manage their payroll and human resources during the COVID-19 pandemic.
As such, Wall Street will keep a close eye on subscription service revenues, which account for more than 85% of Workday's total revenues. It was up 25.8% year-over-year in the previous quarter to $ 882 million.
