Technology stocks’ third-quarter 2020 earnings season is likely to reflect solid uptake of cloud computing solutions, owing to coronavirus crisis triggered digital transformation.
This can be ascertained by strong performance of cloud providers including Amazon ( AMZN Quick Quote AMZN - Free Report) , Microsoft ( MSFT Quick Quote MSFT - Free Report) and Alphabet, this earnings season. Markedly, Amazon Web Services (or AWS), Azure and Google Cloud platform revenues surged 29%, 48% and 44.8%, on a year-over-year basis, respectively, in the September quarter. Encouraging trends in PC shipments in third-quarter of calendar 2020, which per IDC data improved 14.6% year over year to 81.3 million units, remains noteworthy. (Read More: PC Sales Continue Benefiting From COVID-19 Pandemic-Led Demand) Factors Likely to Have Influenced Q3 Performance
Strong momentum in remote working and web-based learning technology owing to coronavirus outbreak might have bolstered sales of processors utilized in enterprise laptops and data center servers. This, in turn, is expected to have benefited the technology sector in the to-be-reported quarter.
Further, work-from-home trend is anticipated to have raked in solid sales for companies offering video conferencing tools and workspace management offerings. Also, robust uptick in chip design activity, increasing deployment of 5G, and recovery in automotive sector are expected to have acted as tailwinds for simulation software providers. Additionally, coronavirus crisis-led stay-at-home wave and shelter-in-place guidelines are likely to have fuelled implementation of contactless payment, online education portals, cloud-gaming, social media platforms, and other leisure tools. This is expected to have aided the technology companies in the quarter to be reported. Nevertheless, impacts from coronavirus-led sluggishness in IT spending, and weakness across small and medium sized businesses are likely to have weighed on the tech companies’ performance in the third quarter. Likewise, softness in transactional software vertical is likely to have affected performance of companies with exposure in the domain. Upcoming Tech Stocks Q3 Earnings Results
As third-quarter 2020 earnings season nears closure, investors following technology stocks are eagerly awaiting earnings releases from players like
Paycom Software, Inc. ( PAYC Quick Quote PAYC - Free Report) , GoDaddy Inc. ( GDDY Quick Quote GDDY - Free Report) , ANSYS, Inc. ( ANSS Quick Quote ANSS - Free Report) , Tyler Technologies, Inc. ( TYL Quick Quote TYL - Free Report) , Upwork Inc. ( UPWK Quick Quote UPWK - Free Report) , scheduled to report on Nov 4. Paycom’s third-quarter 2020 performance is likely to reflect gains from new deal wins and uptick in its high-margined recurring revenue business. Moreover, this cloud-based human capital management (HCM) software as a service solution provider, has a Zacks Rank #2 (Buy) and an Earnings ESP of +3.67%. Notably, per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the odds of an earnings beat. You can see . the complete list of today’s Zacks #1 Rank stocks here Improving employee usage strategy, sales efforts and strategic investments are likely to have contributed to sales growth during the period in discussion. (Read More: What's in Store for Paycom This Earnings Season?)
The Zacks Consensus Estimate for earnings has been steady over the past seven days at 56 cents per share.
GoDaddy’s third-quarter 2020 performance is likely to reflect gains from momentum in coronavirus crisis induced digitization. Digital transformation wave has led to an uptick in subscriptions to Websites and Marketing, and managed WordPress offerings, which is expected to have contributed to third-quarter performance. Additionally, growing momentum of Open-Xchange in the emerging markets is likely to have accelerated revenues within the Business Applications unit.
Notably, our proven model does not conclusively predict an earnings beat for GoDaddy this time around. Although, it has a Zacks Rank #2, an Earnings ESP of 0.00%, makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter. The Zacks Consensus Estimate for earnings has been steady over the past seven days at 31 cents per share. ANSYS’ third quarter 2020 results are likely to have benefited from solid uptick in chip design activity. Strong demand for the company’s cloud-based simulation software offerings amid strength across the semiconductor, defense, and communication end-markets, might get reflected in the to-be-reported quarter’s results. (Read More: Factors You Must Note Ahead of ANSYS' Q3 Earnings) ANSYS has a Zacks Rank #3 and an Earnings ESP of 0.00%.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.26 per share, unchanged in the past 30 days.
Tyler’s third-quarter 2020 results are likely to have been affected by the coronavirus pandemic-induced economic and business disruptions. Notably, during its second-quarter earnings conference call, management had stated that the pandemic would impact its financial results during the second half of 2020. Nevertheless, the company’s focus on a subscription-based model and coronavirus crisis led traction of its software offerings across municipal and local governments are likely to have driven performance. (Read More: What's in Store for Tyler This Earnings Season?)
Tyler has a Zacks Rank #3 and an Earnings ESP of 0.00%.
The Zacks Consensus Estimate for earnings has been steady over the past 30 days at $1.34 per share. Upwork’s third-quarter 2020 results are likely to reflect gains from the COVID-19 crisis induced remote working trend. The online talent marketplace provider has been striving hard to attract large business organizations to hire freelance talent through its Work Together Talent Grants program. A surge in hiring of freelance talent as businesses resort to stringent cost-saving practices are likely to have resulted in healthy adoption of Upwork’s services. (Read More: Factors Setting the Tone for Upwork's Q3 Earnings)
Upwork has a Zacks Rank #3 and an Earnings ESP of 0.00%.
The Zacks Consensus Estimate for loss per share has been steady at 8 cents in the past 30 days. Legal Marijuana: An Investor’s Dream
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