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In the matter of just a few years, “the Cloud” has evolved from the new feature that your grandmother just can’t quite seem to understand to one of the main factors driving growth in the technology sector. Cloud computing is now an essential focus for software-related companies, and cloud stocks have piqued the interest of many tech-focused investors.
New technologies and changing consumer behavior have changed the shape of the technology landscape, and an industry that was once centered on the personal computer has adapted to survive in the world of mobile computing and the Cloud. The markets have been paying attention, and some of the best tech stocks have been those that are either primarily cloud-based companies, or those that have shown growth in their cloud operations.
With this in mind, we’ve highlighted three stocks that are not only showing strong cloud-related activity, but also strong fundamental metrics. Check out these three cloud stocks to buy right now:
Adobe Systems is a provider of graphic design, publishing, and imaging software for Web and print production. The company’s main offering is its “Creative Cloud,” which is a software-as-a-service (SaaS) product that allows users to access all of Adobe’s tools at one monthly price. The stock currently has a Zacks Rank #2 (Buy).
ADBE shares are up over 44% year-to-date and could be poised to break even higher soon. We’ve seen five positive estimate revisions for the company’s upcoming earnings report over the past 60 days, and Adobe has already proven itself to be a consistent earnings over-performer. On top of this, our current consensus estimate is calling for sales to grow 24% this quarter—a rate that should have investors giddy.
Five9 provides cloud software for contact centers. The company offers software products such as workforce management, speech recognition, predictive dialer, and voice applications, as well as an all-in-one contact center cloud platform. Currently, FIVN holds a Zacks Rank #2 (Buy).
Shares of FIVN are up nearly 50% so far this year, and if the stock’s strong Zacks Rank and “A” grades for Growth and Momentum have anything to say, it should move higher soon. Although Five9 is still a loss-making company, it recently smashed earnings estimates, extending its streak of out-performing the Zacks Consensus Estimate. Sales are growing at about 20% and its full-year earnings estimates have gained 10% in just the past week alone.
3. Red Hat
Red Hat is a leading provider of open-source software and enterprise IT solutions, including cloud computing. The company has a strategic partnership with Amazon’s (AMZN - Free Report) Web Services unit and is rapidly growing its cloud offerings. After another impressive quarter, the stock is now a Zacks Rank #1 (Strong Buy).
In the past quarter, earnings of 40 cents per share smashed the Zacks Consensus Estimate of 6 cents. Revenues were up over 19% year-over-year, primarily driven by strong subscription revenues and cross-selling of cloud-enabled technology. Additionally, the company’s net margin of 10.5% and RoE of 22.6% are significantly better than the respective industry averages of 1.5% an 11%.
Bottom Line
Cloud-based companies have been some of the best performing stocks in the tech sector this year, and these cloud stocks also boast strong fundamental metrics. If you’re looking to add tech stocks to your portfolio right now, this list is probably a good place to start.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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3 Cloud Stocks to Buy Right Now
In the matter of just a few years, “the Cloud” has evolved from the new feature that your grandmother just can’t quite seem to understand to one of the main factors driving growth in the technology sector. Cloud computing is now an essential focus for software-related companies, and cloud stocks have piqued the interest of many tech-focused investors.
New technologies and changing consumer behavior have changed the shape of the technology landscape, and an industry that was once centered on the personal computer has adapted to survive in the world of mobile computing and the Cloud. The markets have been paying attention, and some of the best tech stocks have been those that are either primarily cloud-based companies, or those that have shown growth in their cloud operations.
With this in mind, we’ve highlighted three stocks that are not only showing strong cloud-related activity, but also strong fundamental metrics. Check out these three cloud stocks to buy right now:
1. Adobe Systems (ADBE - Free Report)
Adobe Systems is a provider of graphic design, publishing, and imaging software for Web and print production. The company’s main offering is its “Creative Cloud,” which is a software-as-a-service (SaaS) product that allows users to access all of Adobe’s tools at one monthly price. The stock currently has a Zacks Rank #2 (Buy).
ADBE shares are up over 44% year-to-date and could be poised to break even higher soon. We’ve seen five positive estimate revisions for the company’s upcoming earnings report over the past 60 days, and Adobe has already proven itself to be a consistent earnings over-performer. On top of this, our current consensus estimate is calling for sales to grow 24% this quarter—a rate that should have investors giddy.
2. Five9, Inc. (FIVN - Free Report)
Five9 provides cloud software for contact centers. The company offers software products such as workforce management, speech recognition, predictive dialer, and voice applications, as well as an all-in-one contact center cloud platform. Currently, FIVN holds a Zacks Rank #2 (Buy).
Shares of FIVN are up nearly 50% so far this year, and if the stock’s strong Zacks Rank and “A” grades for Growth and Momentum have anything to say, it should move higher soon. Although Five9 is still a loss-making company, it recently smashed earnings estimates, extending its streak of out-performing the Zacks Consensus Estimate. Sales are growing at about 20% and its full-year earnings estimates have gained 10% in just the past week alone.
3. Red Hat
Red Hat is a leading provider of open-source software and enterprise IT solutions, including cloud computing. The company has a strategic partnership with Amazon’s (AMZN - Free Report) Web Services unit and is rapidly growing its cloud offerings. After another impressive quarter, the stock is now a Zacks Rank #1 (Strong Buy).
In the past quarter, earnings of 40 cents per share smashed the Zacks Consensus Estimate of 6 cents. Revenues were up over 19% year-over-year, primarily driven by strong subscription revenues and cross-selling of cloud-enabled technology. Additionally, the company’s net margin of 10.5% and RoE of 22.6% are significantly better than the respective industry averages of 1.5% an 11%.
Bottom Line
Cloud-based companies have been some of the best performing stocks in the tech sector this year, and these cloud stocks also boast strong fundamental metrics. If you’re looking to add tech stocks to your portfolio right now, this list is probably a good place to start.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>