Society’s increased dependence on technology since the coronavirus pandemic took hold helped the technology sector significantly outperform the broader market in 2020. This can be seen in the Vanguard Information Technology Index Fund’s (VGT) 43.4% gain in 2020 versus the S&P 500’s 18.2%.
Led by household name companies like Amazon.com, Inc. (AMZN) and Apple Inc. (AAPL), the tech wave has taken the stocks of many lesser-known sector participants to unprecedented highs. Their products and services are seeing a large uptick in demand because they are facilitating business functionality and social connectedness amid the pandemic.
RingCentral, Inc. (RNG – Get Rating), Zscaler, Inc. (ZS – Get Rating), HubSpot, Inc. (HUBS – Get Rating), Pegasystems, Inc. (PEGA – Get Rating) are three lesser-known stocks that delivered exceptional returns in 2020 and we think are positioned to continue performing well this year based on a continuing increase in demand for their offerings.
RNG provides software-as-a-service solutions for enterprise communications. The company’s primary offering is the RingCentral Office. RNG’s stock has gained 114.5% over the past year.
RNG’s U.K. subsidiary recently received the United Kingdom National Cyber Security Centre’s (NCSC) Cyber Essentials Plus certification, which will raise the company’s profile and should help it build trust with amongst its clients. The company also recently partnered with Stack8 to bring cloud communications solutions to multinational enterprise customers.
For the quarter ended September 30, 2020, RNG’s revenue grew 30% compared to the same period last year. Its ARR grew 36% during the same period.
RNG is expected to see revenue growth of 25.5% for the quarter ended December 31, 2020 and 23.1% in 2021. Its EPS is estimated to grow 21.9% in 2021 and at a rate of 1% per annum over the next five years.
How does RNG stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
B for Peer Grade
A for Overall POWR Rating
The stock is also ranked #3 of 60 stocks in the Software – Business industry.
ZS provides cloud security solutions to businesses globally. The company’s solutions find application in airlines, consumer goods, retail, financial service, healthcare, and more. ZS’s stock has returned 288.9% over the past year.
ZS has extended its partnership with VMWare, which will help organizations simplify their security practices in today’s dynamic workplace. The company has also launched ZScaler Cloud Protection, which automates security for workloads on and between cloud platforms.
For the quarter ended October 31, 2020, the company saw a…
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