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What's in Store for These 4 Software Stocks This Earnings Season?
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Software stocks’ quarterly performances are expected to have significantly benefited from an uptick in the demand for software-based services and products, owing to the increasing adoption of the hybrid work model.
The growing proliferation of Software-as-a-Service or SaaS-based services, the rapid migration to cloud platforms, the solid adoption of video-conferencing software, and rising user penetration of online or digital payment solutions are likely to have been major tailwinds for software companies in first-quarter 2024.
This is evident from the solid third-quarter fiscal 2024 results delivered by Microsoft (MSFT - Free Report) , which was driven by strong momentum across Azure and Office 365. Also, early progress in Copilot for Microsoft 365, and the growing adoption of Teams Phone and Teams Rooms contributed well.
Factors to Consider for Software Stocks
The growing proliferation of generative AI technology, which is leading to increased demand for large language models, is anticipated to have bolstered the prospects of software companies.
Increasing demand for IoT and AR/VR devices, and the accelerated deployment of 5G are expected to have aided the performances of software stocks this earnings season.
Strong momentum across customer relationship software, employee management tools, natural language processing tools, time tracking tools and cyber security software is expected to have hugely favored the software industry in first-quarter 2024.
The solid uptake of enterprise workspace solutions, enterprise communication platforms and online education portals are likely to have contributed well.
The growing proliferation of AI-powered virtual assistants, learning management, infrastructure monitoring and business spend management software is expected to have benefited the industry players in the quarter under review.
However, sluggish consumer spending due to macroeconomic challenges is likely to have hurt the industry participants. High inflation, a weakening global economy and unfavorable foreign exchange fluctuations are expected to have been major headwinds for the software stocks.
Sneak Peek on a Few Upcoming Releases
Let us see how the following technology stocks are poised ahead of their results slated to be reported on Apr 30.
Pinterest’s (PINS - Free Report) first-quarter 2024 results are likely to reflect the positive impacts of its growing initiatives to bring more actionable content on the platform from a wide range of sources, such as users, creators, publishers and retailers, for enhancing customer engagement activities. The company’s deepening focus on building ad tools and formats to help grow the scope of monetization on the platform is likely to have been a plus.
A robust search feature, improving operational rigor and the incorporation of sophisticated AI models to enhance relevancy and personalization are expected to have bolstered the user engagement on the platform further. Benefits from the acquisition of The Yes are likely to have contributed well to the quarterly performance.
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
For the first quarter, the Zacks Consensus Estimate for PINS’s revenues is pegged at $699.96 million, indicating 16.2% growth from the year-ago quarter’s actual.
The consensus estimate for earnings is pegged at 14 cents per share, implying year-over-year growth of 75%. The estimate has been unchanged over the past 30 days.
PayPal’s (PYPL - Free Report) portfolio strength is expected to have helped it maintain a deep and trusted relationship with merchants and consumers in first-quarter 2024. Increasing user engagements on PYPL’s platform, owing to a continuous shift in customer preference toward contactless payments, are anticipated to have acted as tailwinds. Strong monetization efforts of Venmo are likely to have driven growth in the Total Payments Volume of the company.
PayPal’s strengthening cryptocurrency efforts, along with the expanding global footprint of its cryptocurrency service, are expected to have contributed well. The growing momentum of the company’s buy now pay later solution is likely to have aided. (Read more: Should You Consider PayPal Ahead of Q1 Earnings?)
Notably, PayPal has an Earnings ESP of +3.78% and a Zacks Rank #3 at present.
For the first quarter, the Zacks Consensus Estimate for PYPL’s revenues is pegged at $7.50 billion, indicating an improvement of 6.6% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings is pegged at $1.20 per share, indicating growth of 2.6% from the year-ago reported figure. The estimate has been unchanged over the past 30 days.
CommVault Systems’ (CVLT - Free Report) fourth-quarter fiscal 2024 performance is expected to have benefited from growing demand for its cyber resilience and data protection solutions by hybrid cloud organizations. The company’s strong efforts toward improving the cyber resilience of its customers on the back of security tool chain, including security information and event management, security orchestration, automation and response, and network detection and response, are likely to have driven its customer momentum in the to-be-reported quarter.
Growing momentum across Commvault Cloud, which is a purpose-built platform for cyber resilience, is likely to have helped CommVault Systems in winning customers. This, in turn, is anticipated to have driven growth in subscription revenues in the quarter under review.
Notably, CVLT has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
For the first quarter, the Zacks Consensus Estimate for the company’s revenues is pegged at $213 million, indicating an improvement of 4.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings is pegged at 73 cents per share, suggesting no change from the year-ago reported figure. The estimate has been unchanged over the past 30 days.
Blackbaud (BLKB - Free Report) is expected to have continued benefiting from the robust portfolio of cloud-based and on-premise software solutions in first-quarter 2024. Its deepening focus on enabling customers to make data-driven decisions, powered by artificial intelligence, machine learning, cognitive technology, predictive analytics and other advanced technologies, is anticipated to have been a tailwind.
The company’s modernized pricing initiatives, including its new contractual pricing approach, are expected to have been another positive. Apart from this, strength in Blackbaud’s flagship fundraising and donor management software, namely Raiser's Edge NXT, is likely to have contributed well. Also, solid momentum in both contractual and transactional recurring revenue streams, coupled with rising volumes across its other payment solutions, is expected to have driven its quarterly performance.
However, macroeconomic headwinds are anticipated to have ailed.
Notably, Blackbaud has an Earnings ESP of -5.51% and a Zacks Rank #2 at present.
For the first quarter, the Zacks Consensus Estimate for BLKB’s revenues is pegged at $282.22 million, indicating an improvement of 7.8% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings is pegged at 85 cents per share, which suggests growth of 18.1% compared with the year-ago reported figure. The estimate has been revised downward by 4.5% over the past 30 days.
Image: Bigstock
What's in Store for These 4 Software Stocks This Earnings Season?
Software stocks’ quarterly performances are expected to have significantly benefited from an uptick in the demand for software-based services and products, owing to the increasing adoption of the hybrid work model.
The growing proliferation of Software-as-a-Service or SaaS-based services, the rapid migration to cloud platforms, the solid adoption of video-conferencing software, and rising user penetration of online or digital payment solutions are likely to have been major tailwinds for software companies in first-quarter 2024.
This is evident from the solid third-quarter fiscal 2024 results delivered by Microsoft (MSFT - Free Report) , which was driven by strong momentum across Azure and Office 365. Also, early progress in Copilot for Microsoft 365, and the growing adoption of Teams Phone and Teams Rooms contributed well.
Factors to Consider for Software Stocks
The growing proliferation of generative AI technology, which is leading to increased demand for large language models, is anticipated to have bolstered the prospects of software companies.
Increasing demand for IoT and AR/VR devices, and the accelerated deployment of 5G are expected to have aided the performances of software stocks this earnings season.
Strong momentum across customer relationship software, employee management tools, natural language processing tools, time tracking tools and cyber security software is expected to have hugely favored the software industry in first-quarter 2024.
The solid uptake of enterprise workspace solutions, enterprise communication platforms and online education portals are likely to have contributed well.
The growing proliferation of AI-powered virtual assistants, learning management, infrastructure monitoring and business spend management software is expected to have benefited the industry players in the quarter under review.
However, sluggish consumer spending due to macroeconomic challenges is likely to have hurt the industry participants. High inflation, a weakening global economy and unfavorable foreign exchange fluctuations are expected to have been major headwinds for the software stocks.
Sneak Peek on a Few Upcoming Releases
Let us see how the following technology stocks are poised ahead of their results slated to be reported on Apr 30.
Pinterest’s (PINS - Free Report) first-quarter 2024 results are likely to reflect the positive impacts of its growing initiatives to bring more actionable content on the platform from a wide range of sources, such as users, creators, publishers and retailers, for enhancing customer engagement activities. The company’s deepening focus on building ad tools and formats to help grow the scope of monetization on the platform is likely to have been a plus.
A robust search feature, improving operational rigor and the incorporation of sophisticated AI models to enhance relevancy and personalization are expected to have bolstered the user engagement on the platform further. Benefits from the acquisition of The Yes are likely to have contributed well to the quarterly performance.
Notably, Pinterest has an Earnings ESP of 0.00% and flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
For the first quarter, the Zacks Consensus Estimate for PINS’s revenues is pegged at $699.96 million, indicating 16.2% growth from the year-ago quarter’s actual.
The consensus estimate for earnings is pegged at 14 cents per share, implying year-over-year growth of 75%. The estimate has been unchanged over the past 30 days.
Pinterest, Inc. Price and EPS Surprise
Pinterest, Inc. price-eps-surprise | Pinterest, Inc. Quote
PayPal’s (PYPL - Free Report) portfolio strength is expected to have helped it maintain a deep and trusted relationship with merchants and consumers in first-quarter 2024. Increasing user engagements on PYPL’s platform, owing to a continuous shift in customer preference toward contactless payments, are anticipated to have acted as tailwinds. Strong monetization efforts of Venmo are likely to have driven growth in the Total Payments Volume of the company.
PayPal’s strengthening cryptocurrency efforts, along with the expanding global footprint of its cryptocurrency service, are expected to have contributed well. The growing momentum of the company’s buy now pay later solution is likely to have aided. (Read more: Should You Consider PayPal Ahead of Q1 Earnings?)
Notably, PayPal has an Earnings ESP of +3.78% and a Zacks Rank #3 at present.
For the first quarter, the Zacks Consensus Estimate for PYPL’s revenues is pegged at $7.50 billion, indicating an improvement of 6.6% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings is pegged at $1.20 per share, indicating growth of 2.6% from the year-ago reported figure. The estimate has been unchanged over the past 30 days.
PayPal Holdings, Inc. Price and EPS Surprise
PayPal Holdings, Inc. price-eps-surprise | PayPal Holdings, Inc. Quote
CommVault Systems’ (CVLT - Free Report) fourth-quarter fiscal 2024 performance is expected to have benefited from growing demand for its cyber resilience and data protection solutions by hybrid cloud organizations. The company’s strong efforts toward improving the cyber resilience of its customers on the back of security tool chain, including security information and event management, security orchestration, automation and response, and network detection and response, are likely to have driven its customer momentum in the to-be-reported quarter.
Growing momentum across Commvault Cloud, which is a purpose-built platform for cyber resilience, is likely to have helped CommVault Systems in winning customers. This, in turn, is anticipated to have driven growth in subscription revenues in the quarter under review.
Notably, CVLT has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
For the first quarter, the Zacks Consensus Estimate for the company’s revenues is pegged at $213 million, indicating an improvement of 4.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings is pegged at 73 cents per share, suggesting no change from the year-ago reported figure. The estimate has been unchanged over the past 30 days.
CommVault Systems, Inc. Price and EPS Surprise
CommVault Systems, Inc. price-eps-surprise | CommVault Systems, Inc. Quote
Blackbaud (BLKB - Free Report) is expected to have continued benefiting from the robust portfolio of cloud-based and on-premise software solutions in first-quarter 2024. Its deepening focus on enabling customers to make data-driven decisions, powered by artificial intelligence, machine learning, cognitive technology, predictive analytics and other advanced technologies, is anticipated to have been a tailwind.
The company’s modernized pricing initiatives, including its new contractual pricing approach, are expected to have been another positive. Apart from this, strength in Blackbaud’s flagship fundraising and donor management software, namely Raiser's Edge NXT, is likely to have contributed well. Also, solid momentum in both contractual and transactional recurring revenue streams, coupled with rising volumes across its other payment solutions, is expected to have driven its quarterly performance.
However, macroeconomic headwinds are anticipated to have ailed.
Notably, Blackbaud has an Earnings ESP of -5.51% and a Zacks Rank #2 at present.
For the first quarter, the Zacks Consensus Estimate for BLKB’s revenues is pegged at $282.22 million, indicating an improvement of 7.8% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings is pegged at 85 cents per share, which suggests growth of 18.1% compared with the year-ago reported figure. The estimate has been revised downward by 4.5% over the past 30 days.
Blackbaud, Inc. Price and EPS Surprise
Blackbaud, Inc. price-eps-surprise | Blackbaud, Inc. Quote
Stay on top of the upcoming earnings announcements with the Zacks Earnings Calendar.