Best Enterprise Software Stocks To Buy This Month? 3 In Focus
For tech investors surveying the stock market today, enterprise software stocks would be a notable sector. If anything, this sub-division of the broader tech industry today continues to grow both in relevance and overall scale. This would be thanks to the overall increase in enterprise spending on this front. Simply put, after the coronavirus pandemic hit last year, countless companies underwent digital acceleration. Because of this, enterprise software service providers saw massive upticks in demand for their Software-as-a-Service (SaaS) offerings.
As a result, some of the top enterprise software stocks surged in value and popularity. Sure, this would serve to bump up their financials, especially when compared to year-ago levels now. However, the real question now is whether the industry has more room to grow. For the most part, companies that have invested in their digital infrastructure would likely continue their subscriptions. After all, the enterprise SaaS space offers businesses a competitive edge in our increasingly digital world.
Take CrowdStrike (NASDAQ: CRWD) for example. Through its industry-leading cybersecurity services, the company’s top-line continues to show immense growth. Just last week, it posted total revenue of $337.69 million in its second fiscal quarter, marking a huge 69% year-over-year jump. Additionally, it also ended the quarter with over $1.79 billion in cash on hand, a 67% year-over-year increase. At the same time, cloud companies like Oracle (NYSE: ORCL) continue to thrive as well. As of last month, Oracle expanded its partnership network with Vertex (NASDAQ: VERX), a global provider of indirect tax tech solutions. Having read all of this, you might be keen on the industry yourself. In that case, here are three top enterprise software stocks to know in the stock market now.
Best Enterprise Software Stocks To Buy [Or Avoid] Right Now
- Adobe Inc. (NASDAQ: ADBE)
- Zscaler Inc. (NASDAQ: ZS)
- Workday Inc. (NASDAQ: WDAY)
Adobe Inc.
Starting us off today is Adobe. In brief, Adobe identifies as one of the largest and most diversified software companies worldwide. For the uninitiated, Adobe offers digital design and productivity-focused software solutions among others to customers across the globe. Through its offerings, Adobe serves students, creatives, small businesses, government agencies, and even large corporations. Given the relevance of Adobe’s SaaS model today, some would argue that ADBE stock is worth watching now.
Evidently, investors appear to be keen on the company’s shares this year. ADBE stock is sitting on sizable gains of over 37% year-to-date, outpacing the Nasdaq composite. Furthermore, the company continues to pick up the pace on the financial front as well. In its second fiscal quarter posted back in June, Adobe reported a total revenue of $3.84 billion, indicating a 22% year-over-year increase. Executive VP John Murphy cited strong demand for the company’s Digital Media and Digital Experience offerings as key growth factors. Given all of this, Murphy argues that Adobe is in a position to “deliver another record year”.
If all that wasn’t enough, Adobe is also set to acquire Frame.io, a cloud-based video collaboration platform. In essence, Frame streamlines the video production process for customers by enabling collaborative efforts via cloud-first workflows. Safe to say, this acquisition would gel well, in theory, with Adobe’s best-in-class video editing software. All things considered, will you be keeping an eye on ADBE stock this week?
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Zscaler Inc.
Following that, we will be taking a look at cybersecurity giant, Zscaler. The California-based IT security company would be another top enterprise software name to consider now. For a sense of scale, Zscaler operates the world’s largest “in-line cloud security platform”. The likes of which span across over 150 data centers strategically located worldwide. Through this massive network, Zscaler employs its Zscaler Zero Trust Exchange (ZTE) service, protecting thousands of customers across digital ecosystems anywhere in the globe.
By and large, Zscaler’s work would be increasingly crucial as businesses expand their cloud infrastructure. This would be the case as more companies rely on the cloud to store their data and vital assets. With Zscaler’s protection on this front, it would not surprise me to see ZS stock being in focus now. Ahead of its upcoming earnings report this week, the company’s shares are trading towards record heights. Over the past year, this adds up to monumental gains of 115%. Would all this make ZS stock worth investing in now?
Well, for one thing, Inside Edge Capital Management founder, Todd Gordon, seems to believe so. Just last week, he highlighted ZS stock among his top picks for the sector. According to Gordon, the company’s shares could grow to a value of $400 per stock. Should this be the case it would suggest a possible price hike of 45% from its valuation of $287.40 as of last week’s closing. Gordon added, “When they get to more scale that they’re looking for, there’ll be opportunity for them to increase [the] bottom line and turn a profit for investors, so right now you’re buying for growth.” With all that said, will you be adding ZS stock to your portfolio today?
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Workday Inc.
Next, we have Workday, a provider of on-demand financial management and human capital management software services. In a nutshell, the company’s enterprise cloud applications serve as finance and human resources solutions for companies today. Among Workday’s core offerings are its financial management, human resources, planning, spend management, and analytical applications. With most payroll operations going digital amidst the pandemic, Workday would be looking at busy times.
Likewise, WDAY stock seems to be seeing a lot of action in the stock market now as well. Over the past month, the company’s shares have surged by over 18%. This could be on account of its stellar second-quarter earnings figures reported on August 26. In it, Workday posted earnings per share of $1.23 on revenue of $1.26 billion. To highlight this beats Wall Streets’ estimates of $0.78 and $1.24 billion respectively. Not to mention, the company also saw its quarterly subscription revenue increase by 19.5% year-over-year, adding up to $1.11 billion.
All in all, co-CEO Aneel Bhusri said, “This quarter was one of our strongest in company history. Our customer community has grown to more than 55 million users and more than half of the Fortune 500 have selected Workday.” Looking forward, Bhusri also notes that Workday is well-positioned for growth and will continue to invest in its “go-to-market strategies”. With all this in mind, would WDAY stock be a buy for you?
