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The Zacks Analyst Blog Highlights Atlassian, Zscaler, Simulations Plus and Asure Software
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For Immediate Release
Chicago, IL – April 20, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Atlassian (TEAM - Free Report) , Zscaler (ZS - Free Report) , Simulations Plus (SLP - Free Report) and Asure Software (ASUR - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
4 Low-Beta Tech Stocks to Hedge Against Market Uncertainty
After a couple of pandemic-dampened years, the broader equity market started 2023 on a decent note, with the three major indexes in the positive trajectory so far this year.
Major stock market indices in the United States like the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have gained 2.5%, 16.1% and 8.2%, respectively, over the year-to-date (YTD) period. In fact, the tech sector is one of the outperformers in this year's broader stock market rally. The Zacks Computer and Technology sector has risen 19.5% YTD.
However, fears of recession still loom due to persistent macroeconomic and geopolitical issues. Consumers and enterprises have become more cautious about their IT spending due to inflationary pressure and rising interest rates. The technology sector, for which supply-chain constraints were a major issue till mid-2022, is now encountering higher inventory-level challenges due to softened IT spending.
Such challenges are likely to persist in the near term, affecting the price performances of most tech stocks. But the question is, should investors interested in tech stocks stay away from the space?
We believe that investing in low-beta tech stocks like Atlassian, Zscaler, Simulations Plus and Asure Software can aid investors in hedging against the current highly volatile market environment.
Beta measures a stock's systematic risk or volatility compared with the market. Therefore, a stock with a beta of less than 1.0 will be less sensitive to the market's movements than a stock with a beta of more than 1.0.
Picking the Right Low-Beta Stocks
We have run the Zacks Stocks Screener to identify stocks with a beta between 0.50 and 0.85. We have narrowed our search by considering stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Our Picks
Asure Software is a web-based workforce management solutions provider. The company's solution portfolio enables organizations to manage their office environment, as well as their human resource and payroll processes. Its workforce management solutions include products to optimize workforce time and attendance tracking, benefits enrollment and tracking, pay stubs and W2 documentation, expense management, meeting and event management, and asset tracking.
Currently, the company sports a Zacks Rank #1. Asure has a beta of 0.69. Shares of ASUR have gained 80.2% YTD.
Asure is gaining from growing demand for its products and services amid accelerated digital transformation. Its strategic initiative to become a pure software-as-a-service human capital management (HCM) company is aiding its top-line growth. New client additions and continued focus on cross-selling to existing clients are driving the company's revenues. ASUR's differentiated employee strategy, measurement capabilities and comprehensive product offerings are helping it win new customers.
The long-term expected earnings growth rate for Asure is pegged at 25%. The Zacks Consensus Estimate for ASUR's 2023 earnings is pegged at 35 cents per share, implying an increase of 133.3% from the year-ago reported figure. For 2024, the consensus mark for earnings has been unchanged at 44 cents per share over the past 30 days, indicating a 27.1% year-over-year rise.
Atlassian is a global leader and innovator in the enterprise collaboration and workflow software space. The company offers a suite of cloud-based software solutions, which help organizations, collaborate and manage their workforce so that teams work better together.
This Zacks Rank #2 company has a beta of 0.83. Shares of TEAM have jumped 26.1% YTD.
Atlassian is benefiting from the rising demand for remote working tools amid the hybrid work trend and accelerated digital transformation. Improvement in product quality and performance, multiple product launches, transparent pricing and its unique sales strategy are positives. The expansion of its product portfolio through acquisitions of the likes of ThinkTilt, Chartio, Halp and Mindville is expected to accelerate growth momentum. Further, integration with leading applications like Dropbox and Adobe, along with partnerships, is likely to expand its paying-user base.
The consensus mark for TEAM's fiscal 2023 earnings is pegged at $1.51 per share, unchanged over the past 60 days, and indicates a 10.7% year-over-year decrease. For fiscal 2024, the Zacks Consensus Estimate for earnings stands at $1.95 per share for the past 60 days, indicating year-over-year growth of 29%.
Simulations Plus is a premier developer of groundbreaking drug discovery and development simulation software, which is licensed and used for drug research by major pharmaceutical and biotechnology companies worldwide.
Currently, Simulations Plus has a Zacks Rank #2. It has a beta of 0.54. Shares of SLP have climbed 15.9% YTD.
Lancaster, CA-headquartered SLP's performance is being driven by strength in its Services revenues, which increased 4% to $5.3 million in second-quarter fiscal 2023. In March, the company partnered with the Sino-American Cancer Foundation to boost the development of anticancer therapies.
Earlier in the same month, it collaborated with the Institute of Medical Biology of the Polish Academy of Sciences to design new compounds for the RORγ/RORγT nuclear receptors. As part of the agreement, the company is leveraging artificial intelligence/machine learning technologies in the ADMET Predictor platform for the development of new compounds.
The Zacks Consensus Estimate for SLP's fiscal 2023 earnings is pegged at 66 cents, unchanged over the past seven days. The consensus mark for fiscal 2024 earnings has also remained steady for the past seven days at 71 cents, suggesting an 8.3% year-on-year rise.
Zscaler is one of the world's leading providers of cloud-based security solutions. The company offers a full range of enterprise network security services including web security, Internet security, antivirus, vulnerability management, firewalls, and control over user activity in mobile, cloud computing, and Internet of things environments.
Zscaler carries a Zacks Rank #2 company and has a beta of 0.85. Shares of ZS have lost 7.5% YTD.
Currently, Zscaler is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches. Growing demand for privileged access security on digital transformation and cloud-migration strategies is a key growth driver for the company. Its portfolio strength boosts its competitive edge and helps add users. It has strong presence across verticals, such as banking, insurance, healthcare, public sector, pharmaceuticals, telecommunications services and education. The increasing adoption of Software-Defined Wide Area Network solutions is a key growth driver for the company's long run growth.
The consensus mark for ZS' fiscal 2023 earnings has been revised upward by 4 cents to $1.52 per share over the past 30 days, calling for a 120.3% year-over-year rise. For fiscal 2024 also, the Zacks Consensus Estimate for earnings has increased by 4 cents to $1.97 per share over the past 30 days, implying year-over-year growth of 29.3%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Atlassian, Zscaler, Simulations Plus and Asure Software
For Immediate Release
Chicago, IL – April 20, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Atlassian (TEAM - Free Report) , Zscaler (ZS - Free Report) , Simulations Plus (SLP - Free Report) and Asure Software (ASUR - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
4 Low-Beta Tech Stocks to Hedge Against Market Uncertainty
After a couple of pandemic-dampened years, the broader equity market started 2023 on a decent note, with the three major indexes in the positive trajectory so far this year.
Major stock market indices in the United States like the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have gained 2.5%, 16.1% and 8.2%, respectively, over the year-to-date (YTD) period. In fact, the tech sector is one of the outperformers in this year's broader stock market rally. The Zacks Computer and Technology sector has risen 19.5% YTD.
However, fears of recession still loom due to persistent macroeconomic and geopolitical issues. Consumers and enterprises have become more cautious about their IT spending due to inflationary pressure and rising interest rates. The technology sector, for which supply-chain constraints were a major issue till mid-2022, is now encountering higher inventory-level challenges due to softened IT spending.
Such challenges are likely to persist in the near term, affecting the price performances of most tech stocks. But the question is, should investors interested in tech stocks stay away from the space?
We believe that investing in low-beta tech stocks like Atlassian, Zscaler, Simulations Plus and Asure Software can aid investors in hedging against the current highly volatile market environment.
Beta measures a stock's systematic risk or volatility compared with the market. Therefore, a stock with a beta of less than 1.0 will be less sensitive to the market's movements than a stock with a beta of more than 1.0.
Picking the Right Low-Beta Stocks
We have run the Zacks Stocks Screener to identify stocks with a beta between 0.50 and 0.85. We have narrowed our search by considering stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Our Picks
Asure Software is a web-based workforce management solutions provider. The company's solution portfolio enables organizations to manage their office environment, as well as their human resource and payroll processes. Its workforce management solutions include products to optimize workforce time and attendance tracking, benefits enrollment and tracking, pay stubs and W2 documentation, expense management, meeting and event management, and asset tracking.
Currently, the company sports a Zacks Rank #1. Asure has a beta of 0.69. Shares of ASUR have gained 80.2% YTD.
Asure is gaining from growing demand for its products and services amid accelerated digital transformation. Its strategic initiative to become a pure software-as-a-service human capital management (HCM) company is aiding its top-line growth. New client additions and continued focus on cross-selling to existing clients are driving the company's revenues. ASUR's differentiated employee strategy, measurement capabilities and comprehensive product offerings are helping it win new customers.
The long-term expected earnings growth rate for Asure is pegged at 25%. The Zacks Consensus Estimate for ASUR's 2023 earnings is pegged at 35 cents per share, implying an increase of 133.3% from the year-ago reported figure. For 2024, the consensus mark for earnings has been unchanged at 44 cents per share over the past 30 days, indicating a 27.1% year-over-year rise.
Atlassian is a global leader and innovator in the enterprise collaboration and workflow software space. The company offers a suite of cloud-based software solutions, which help organizations, collaborate and manage their workforce so that teams work better together.
This Zacks Rank #2 company has a beta of 0.83. Shares of TEAM have jumped 26.1% YTD.
Atlassian is benefiting from the rising demand for remote working tools amid the hybrid work trend and accelerated digital transformation. Improvement in product quality and performance, multiple product launches, transparent pricing and its unique sales strategy are positives. The expansion of its product portfolio through acquisitions of the likes of ThinkTilt, Chartio, Halp and Mindville is expected to accelerate growth momentum. Further, integration with leading applications like Dropbox and Adobe, along with partnerships, is likely to expand its paying-user base.
The consensus mark for TEAM's fiscal 2023 earnings is pegged at $1.51 per share, unchanged over the past 60 days, and indicates a 10.7% year-over-year decrease. For fiscal 2024, the Zacks Consensus Estimate for earnings stands at $1.95 per share for the past 60 days, indicating year-over-year growth of 29%.
Simulations Plus is a premier developer of groundbreaking drug discovery and development simulation software, which is licensed and used for drug research by major pharmaceutical and biotechnology companies worldwide.
Currently, Simulations Plus has a Zacks Rank #2. It has a beta of 0.54. Shares of SLP have climbed 15.9% YTD.
Lancaster, CA-headquartered SLP's performance is being driven by strength in its Services revenues, which increased 4% to $5.3 million in second-quarter fiscal 2023. In March, the company partnered with the Sino-American Cancer Foundation to boost the development of anticancer therapies.
Earlier in the same month, it collaborated with the Institute of Medical Biology of the Polish Academy of Sciences to design new compounds for the RORγ/RORγT nuclear receptors. As part of the agreement, the company is leveraging artificial intelligence/machine learning technologies in the ADMET Predictor platform for the development of new compounds.
The Zacks Consensus Estimate for SLP's fiscal 2023 earnings is pegged at 66 cents, unchanged over the past seven days. The consensus mark for fiscal 2024 earnings has also remained steady for the past seven days at 71 cents, suggesting an 8.3% year-on-year rise.
Zscaler is one of the world's leading providers of cloud-based security solutions. The company offers a full range of enterprise network security services including web security, Internet security, antivirus, vulnerability management, firewalls, and control over user activity in mobile, cloud computing, and Internet of things environments.
Zscaler carries a Zacks Rank #2 company and has a beta of 0.85. Shares of ZS have lost 7.5% YTD.
Currently, Zscaler is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches. Growing demand for privileged access security on digital transformation and cloud-migration strategies is a key growth driver for the company. Its portfolio strength boosts its competitive edge and helps add users. It has strong presence across verticals, such as banking, insurance, healthcare, public sector, pharmaceuticals, telecommunications services and education. The increasing adoption of Software-Defined Wide Area Network solutions is a key growth driver for the company's long run growth.
The consensus mark for ZS' fiscal 2023 earnings has been revised upward by 4 cents to $1.52 per share over the past 30 days, calling for a 120.3% year-over-year rise. For fiscal 2024 also, the Zacks Consensus Estimate for earnings has increased by 4 cents to $1.97 per share over the past 30 days, implying year-over-year growth of 29.3%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.