The profit season of the US technology sector will accelerate in the coming days.
While most attention has focused on megapet names such as (NASDAQ :), (NASDAQ :), (NASDAQ :), (NASDAQ 🙂 and (NASDAQ :), investors would be wise to turn their attention to other high-flying companies ready to provide robust long-term growth.
Below, we will discuss three technology sector stocks that will enjoy explosive profit and sales growth due to the accelerated demand for their innovative products, as the COVID-19 pandemic has forced many companies to work remotely.
Each is worth considering ahead of their quarterly reports in the coming weeks.
1. Zendesk : Reports as of July 30th after Closing markets
Customer software manufacturer Zendes NYSE 🙂 has seen its shares rise 66% since hitting a recent low in late March as many organizations hastened their move to a cloud-based contact center platform following government-imposed lockdown measures, forcing many to close their physical offices.
On Tuesday, the stock reached a record high of $ 96.79, before ending at $ 94.30, providing the San Francisco-based company with a market capitalization of approximately $ 10.8 billion.
Zendesk's second quarter results, which will be Thursday, July 30 after the US market closes, are expected to have benefited from growing demand and adoption of the Sunshine Conversations platform, a feature that allows companies to report from every channel, social media and messaging services, in one call and maximize their communication with customers.
Consensus calls for a second quarter earnings per share of $ 0.10, which would represent an annual increase of 100%. Revenue is expected to grow 24% in the same period a to $ 240.54 million, as companies sought new channels of communication to improve interaction with their customers during the lockdown.
In addition to earnings per share and earnings, investors will also focus on Zendesk's update regarding customer additions. At the end of the first quarter, paid customer accounts were around 160,600, up 10% year over year.
2. Twilio: Reports August 6 After Markets Close
Cloud communications platform specialist Twilio (NYSE 🙂 has seen its shares rise during the corona virus crisis , with a dazzling 210% since then, the bear market was low at the end of March. The software-as-a-service company has been in high demand for its cloud-based offering as more companies have invested in upgrading their online services during the ongoing pandemic.
The stock closed at $ 260.51 last night after reaching a record high of $ 264.43 earlier in the session. At the current level, the San Francisco-based company has a valuation of approximately $ 36.5 billion.
Twilio – who exceeded expectations for the results and guidance for the last quarter – reports the financial results after the closing clock on Thursday, August 6.
Consensus calls for a loss of $ 0.09 per share for the second quarter, compared to a profit of $ 0.03 per share in the prior year period, reflecting the rising costs of the software maker in his efforts to expand. However, sales are expected to rise nearly 34% from the same period a to $ 367.9 million, thanks to an expected increase in the use of its services for distributed contact centers and telecare.
Aside from the top and bottom line figures, investors will be watching Twilio's update on its active customer accounts to see if the cloud communications platform provider can sustain its scorching growth rate. The company announced in its first quarter earnings report that it had 190,000 customers, 23% more than a year ago.
3. Datadog: Reports August 6 after Closing markets
Shares of IT monitoring software company Datadog (NASDAQ 🙂 performed significantly in recent months outperformed the broader market and rose 172% low since March 23 as it benefits from the growing demand for cloud observation solutions across the business segment.
The stock, which reached a record high of $ 98.99 on July 9, closed at $ 90.72 last night, earning the New York-based company a market capitalization of approximately $ 27.6 billion.
The business software manufacturer, whose revenues and revenues easily surpassed the first quarter forecasts, is expected to report the second quarter results on Thursday, August 6 after closing.
Consensus estimates require a profit of $ 0.01 per share, which would indicate an annual growth rate of 300%. Revenue is expected to rise approximately 165% over the same period a to $ 135.4 million as the impact of COVID-19 accelerated digitization trends for companies and increased demand for cloud communications tools.
As such, investors will keep an eye on Datadog's update on the total number of new customers to see if it can extend its quarterly streak of at least 1,000 net new customers into three consecutive quarters. The company announced in its first quarter earnings report that it had a total of 11,500 customers, up 40% year over year.
The total number of Datadog customers with annual recurring revenues of $ 100,000 or more, which increased 89% to 960 in the previous quarter, will also be in focus.
