It’s no secret that software solutions have been playing an important role in worldwide rapid digitalization, which has been accelerated by the COVID-19 pandemic. Several companies in the software space are also expected to benefit from President Joe Biden’s $2 trillion infrastructure and economic recovery package proposal, which was unveiled on March 31. This is because software is playing a vital and increasing role in day-to-day industrial operations and in construction and manufacturing operations.
Software stocks are also expected to benefit from increasing IT spending. According to Gartner, Inc., worldwide IT spending is expected to hit $4.1 trillion in 2021. And because several countries are now experiencing a resurgence of COVID-19 infections, remote lifestyles are expected to continue for the foreseeable future, which should keep driving the growth of software companies.
So, we think it wise to bet on companies such as Open Text corporation (OTEX – Get Rating), Verint Systems, Inc. (VRNT – Get Rating), and Commvault Systems, Inc. (CVLT – Get Rating). Their market dominance and consistent product innovation should help them thrive in the coming months.
Headquartered in Waterloo, Canada, OTEX solves its customers’ digital business challenges, ranging from small- and mid-sized businesses to the world’s largest and most complex organizations. The company provides a platform and suite of software products and services that assist organizations in finding, utilizing, and sharing business information from any device. Its software and services allow organizations to manage the information that flows into, out of, and throughout their enterprise as part of daily operations.
OTEX’s net sales of $855.64 million for the fiscal 2021 second quarter ended December 31, 2020 represents a 10.9% year-over-year rise. Its gross profit has increased 11.9% year-over-year to $603.08 million. The company’s non-GAAP operating income has increased 14.9% year-over-year to $340.50 million. Also, its adjusted EBITDA increased 13.8% year-over-year to $360.80 million. OTEX’s non-GAAP EPS came in at $0.95, up 13.1% year-over-year.
For the quarter ended March 31, 2021 analysts expect OTEX’ EPS to be $0.69, which represents a 13.1% year-over-year increase. It also surpassed the consensus EPS estimates in each of the trailing four quarters. The company’s revenue is expected to increase 6.1% year-over-year to $3.30 billion in fiscal 2021.
Last month, OTEX announced that OpenText Migrate had achieved the Amazon Web Services (AWS) Outposts Ready designation as part of Amazon.com, Inc. ‘s (AMZN) AWS Service Ready Program. OTEX also launched Cloud Edition (CE) 21.1 on March 11, 2021, thus delivering a tailored combination of industry solutions, API services, flexible delivery models, and expert managed services to help customers support modern work, engage customers, connect businesses to global commerce, and stay ahead of their competition. The stock has gained more than 34% over the past year and closed Friday’s trading session at $49.36.
It’s no surprise that OTEX has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has an A grade for Stability and a B grade for Sentiment, Growth, and Value. Click here to see OTEX’s rating for Momentum and Quality.
OTEX is ranked #2 out of 117 stocks in the Software-Application industry.
CVLT is a provider of data and information management software applications and related services. Its solutions include Complete back-up and recovery, Hyperscale technology, and Orchestrate. The company’s software applications are used across various industries, including financial services, health care, manufacturing, technology and utilities, among others.
For its fiscal year 2021 third quarter, ended December 31, 2020, CVLT’s total revenues came were $188 million, indicating 6.6% growth year-over-year. Its gross profit for the quarter increased 9.4% year-over-year to $159.58 million. The company’s net income came in at $1.67 million, compared to a net loss of $650,000 in the third quarter of fiscal 2020. Its non-GAAP EPS increased 21.3% year-over-year to $0.57.
The company’s EPS and revenue for the quarter ended March 31, 2021 are expected to increase 60% and 10.7% year-over-year, respectively. Also, CVLT surpassed consensus EPS estimates in three of the trailing four quarters.
In February, CVLT announced that CRN, a brand of The Channel Company, had named John Tavares, Vice President, Global Channels and Alliances, Lamia Megdiche, Vice President, Partner Strategy and Programs, and Jesse Grindeland, Vice President, America’s Global Partner Organization, to its 2021 list of Channel Chiefs. In February it also announced a partnership with…
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