Since the release of COVID-19 in March forced companies to require employees to stay at home, the demand for remote work tools has increased dramatically.
Not surprisingly, the Direxion Work From Home ETF (NYSE :), which ended at a new record high on Tuesday, is up about 17% since its launch in late June.
In addition to high profile home working winners such as Zoom Video Communications (NASDAQ 🙂 Slack Technologies (NYSE :), DocuSign (NASDAQ :), Twilio (NYSE :), and Crowdstrike (NASDAQ :), here are three more top technology stocks to further capitalize on the booming trend.
Each is worth considering ahead of their quarterly reports in the coming weeks.
1. Citrix Systems: reports October 22, before Markets Open
Citrix Systems (NASDAQ :), which has more than 100 million users in 400,000 organizations, its share has seen its share increase to about 30% since the beginning of the year as stay-at-home orders in the wake of the COVID-19 pandemic increased demand for its remote software services.
The technology company, headquartered in Fort Lauderdale, Florida and Santa Clara, California, develops Virtual Private Networking (VPN) software that allows users to remotely access work computers and networks over a secure connection.
The stock – which had risen a whopping 55% at one point this year – closed at $ 144.03 on Tuesday, earning the enterprise software maker a valuation of approximately $ 18 billion.
Citrix, whose highest consensus views were in the second quarter, is expected to report third quarter results on Thursday, October 22, before opening the US market.
Analysts expect earnings per share of $ 1.24 for the July-September period. Revenue is expected to increase 4% from the same period a year earlier to $ 758.28 million, driven by strong demand for remote work-from-home software products.
As Citrix moves from a license-based revenue model to a more profitable subscription-based strategy, Wall Street will keep a close eye on annual recurring revenue (ARR) figures – which are up 54% year-over-year to $ 949 million in the last quarter and software-as-a-service ARR figures, which were up 41% yoy to $ 590 million, to see if they can maintain their scorching growth rate.
In addition to earnings per share and revenue, market players will focus on Citrix's outlook for the remainder of the year and beyond. The maker of virtual desktop software ensured that fiscal 2020 revenues were between $ 3.18 billion and $ 3.21 billion in the last quarter, compared to $ 3.01 billion in fiscal 2019.
2. ServiceNow: reports October 28, after Markets Close
ServiceNow (NYSE 🙂 has seen its stock significantly outperform the wider market this year, with an increase of nearly 84% in 2020, as investors have become increasingly optimistic about the cloud-based workflow automation software provider in today's work-from-home environment.
The Santa Clara, California-based company helps other companies track and manage digital workflows for business operations. It also provides cloud-based tools to automate tasks for information technology departments, human resources and customer service management.
The stock hit a record high of $ 522.77 last night before taping off at $ 518.30, bringing the cloud enterprise software manufacturer a market cap of approximately $ 100 billion.
ServiceNow, which reported better than expected at the end of July but was disappointed with its outlook, then reports revenues after the closing clock on Wednesday, October 28.
By consensus estimates, the enterprise software manufacturer should post earnings of $ 1.03 per share, higher than earnings per share of $ 0.99 in the same period a year ago. Revenues are expected to be $ 1.11 billion, up 25% from $ 885.8 in the same period a year earlier, as the COVID-19 pandemic spurred increased demand for its external workflow tools.
As such, investors will keep an eye on ServiceNow's update on the additions to enterprise customers to see if it can still add major contracts in the current environment. The company announced in its second-quarter earnings report that it had closed 40 deals with net new annual contract value in excess of $ 1 million, compared to 37 in the previous quarter.
3. Datadog: Reports November 5, after Markets Close
Datadog (NASDAQ :), which provides a monitoring and analysis platform for software developers and IT departments, has enjoyed a remarkable run this year.
Shares of the New York-based company, which counts names like AT&T (NYSE :), FedEx (NYSE 🙂 and Airbnb as customers, more than doubled this year as it benefits from rising demand for its cloud observation solutions for the entire business segment.
The stock, up 210% so far in 2020, hit a new high of $ 118.10 yesterday before finishing at $ 116.87, bringing the fast-growing monitoring and analytics platform specialist to a market cap of nearly $ 25. billion.
Datadog – which, based on results and guidelines – then reports financial results after the closing bell on Thursday, November 5.
Consensus estimates call for a profit of $ 0.01 per share, which would indicate a Y-o-Y EPS growth rate of 100%. Revenues are expected to increase nearly 50% from the same period a year earlier to $ 144.3 million, reflecting the rising demand for cloud-based tools as the COVID-19 pandemic forced companies to accelerate digitization trends .
In addition to the top and bottom line numbers, investors will focus on Datadog & # 39; s update on the total number of new customers. The enterprise software manufacturer announced in its second-quarter earnings report that it had a total of 12,100 customers, up 37% year-on-year.
The total number of Datadog customers with annual recurring revenue (ARR) of $ 100,000 or more, which increased 71% in the previous quarter to 1,015, will also be portrayed.
In addition, investors will be happy to receive more information about Datadog's recently announced cloud computing partnership with Microsoft (NASDAQ :). Under the partnership, unveiled last month, Microsoft customers will have access to Datadog tools on the Azure web portal. We expect the deal to positively impact Datadog's business and increase its customer base in the coming quarters.
