Should Investors Be Watching These Top SaaS Stocks This Week?
Even as the broader stock market today appears to be slowing its roll, the Software-as-a-Service (SaaS) industry continues to perform. As such, SaaS stocks could also be viable plays amidst the current market conditions. For starters, the need for SaaS skyrocketed at the onslaught of the pandemic. Since then, corporate spending on this section of the tech industry remains at elevated levels. In the long run, companies that have already invested in these services could likely be looking to make the most of their current SaaS subscriptions. Because of this, the case for SaaS stocks could, arguably, grow.
Not to mention, the latest earnings figures from SaaS firms continue to impress throughout this earnings season. For instance, we could take a look at the likes of Semrush (NYSE: SEMR) and PubMatic (NASDAQ: PUBM). Just this week, both firms reported solid figures in their respective quarterly earnings. On one hand, Semrush saw its third-quarter revenue surge by 53% year-over-year. Additionally, the company’s annual recurring revenue is up by 47% over the same time as well. According to CEO Oleg Shchegolev, strong growth across Semrush’s core offerings is contributing to the company’s current momentum. He also notes that the company’s average revenue per customer gained by 20% in the quarter.
On the other hand, PubMatic reported record revenue in its latest quarter, marking a 54% year-over-year jump. Because of this, the company is also raising its full-year 2021 revenue outlook as well. While these two ad tech SaaS firms continue to prosper, should investors be watching the top SaaS stocks in the stock market now?
Best SaaS Stocks To Watch In November 2021
- Salesfore.com Inc. (NYSE: CRM)
- Adobe Inc. (NASDAQ: ADBE)
- Microsoft Corporation (NASDAQ: MSFT)
Salesforce.com Inc.
First up, we have Salesforce, a cloud-based software company that is also the world’s number 1 customer relationship management software. It allows for an integrated platform, with AI, app development, and a suite of best-in-class apps. The company’s CRM platform helps its users go deeper with all their data and metrics. It essentially allows them to manage their data and interpret them easily with reporting features so that they can better manage their customer relations. CRM stock currently trades at $299.56 as of 2:21 p.m. ET.
The company is set to announce its third-quarter earnings on November 30, 2021, after the market closes. In light of that, let us take a glimpse of how it has been doing financially so far. In August, it reported a strong second quarter, with $6.34 billion in revenue, increasing by 23% year-over-year. The company says that this was driven by companies and governments around the world accelerating their digital transformations. In September, it also raised its fiscal year 2022 revenue guidance to a range of $26.25 billion to $26.35 billion. It also initiated a fiscal year 2023 guidance of $31.65 billion to $31.80 billion, signaling continuous growth.
On September 21, 2021, Salesforce also announced the launch of Health Cloud 2.0, a connected platform to help deliver health and safety from anywhere for both governments and businesses. “Every company is eager to be together safely with their customers, prospects, employees, and partners as they look to get back to growth and combat digital fatigue,” said Sarah Franklin, President and Chief Marketing Officer, Salesforce. “We built Dreampass, powered by Health Cloud 2.0, to bring our community together safely in San Francisco for a special in-person experience unlike anything else in the world.” Given all of this, is CRM stock worth adding to your portfolio right now?
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Adobe Inc.
Adobe is one of the largest and most diversified software companies in the world. In fact, its users range from students, creative artists, small businesses, and government agencies. The company’s software allows its users to design and deliver exceptional digital experiences. It is also the company behind the popular raster graphics editor, Photoshop. Photoshop has become the industry standard not only in raster graphics editing but in digital arts as a whole. ADBE stock currently trades at $649.70 as of 2:21 p.m. ET and is up by over 45% in the past year alone.
Last month, the company announced that it had completed the acquisition of Frame.io, a leading cloud-based video collaboration platform. The combination of Adobe’s leading video editing offerings with Frame.io’s cloud-based review and approval functionality will radically accelerate the creative process and deliver an end-to-end video platform. With skyrocketing demand for video content, video teams must create an ever-increasing volume of content. Adobe will be able to expand beyond video editors to a broader set of customers, teams, and enterprises.
It also recently announced Adobe MAX 2021, the largest creativity conference in the world and introduced various new updates and innovations across its products. At Adobe MAX, the company announced major updates across Creative Cloud flagship applications powered by Adobe Sensei, accelerated the video creation process with the addition of Frame.io and advanced 3D and immersive authoring abilities. Adobe also previewed new collaboration capabilities with the introduction of Creative Cloud Canvas, Creative Cloud Spaces and betas of Photoshop and Illustrator on the web. Given this entire host of new features, could ADBE stock be worth watching?
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Microsoft Corporation
Another major name to consider among SaaS firms now would be Microsoft. This would be the case as it is behind the world’s leading productivity software, Microsoft Office. At the same time, Microsoft also boasts extensive cloud computing services in its Microsoft Azure division. If all that wasn’t enough, the company is an active player in the video gaming industry via its Xbox Game Pass subscription. Overall, when it comes to the SaaS space, few can stand toe-to-toe with Microsoft.
Now, MSFT stock currently trades at $330.86 as of 2:22 p.m. ET. With year-to-date gains of over 50%, could the company’s shares be worth investing in? To help answer this we could look at Microsoft’s latest moves. To begin with, Microsoft revealed a new version of its cutting-edge Windows 11 operating system. In detail, the company’s Windows 11 SE is primarily catered towards K-8 classrooms and will ship exclusively on low-cost devices. Microsoft seems to be keen on expanding into the educational tech market now. This would put it in direct competition with Alphabet‘s (NASDAQ: GOOGL) Google Chromebooks and Apple’s (NASDAQ: AAPL) MacBooks.
Aside from its work on the operational front, Microsoft continues to perform financially as well. In its latest fiscal quarter report, the company raked in a total revenue of $45.31 billion, a 22% year-over-year hike. This marks its fastest growth since 2018. With Microsoft seemingly kicking into high gear now, will you be keeping an eye on MSFT stock?
