Investing in tech stocks doesn’t need to be rocket science. Often, the product may be complicated, but the application is straightforward. Anyone can invest in tech stocks with basic investment knowledge.
Unity Software (NYSE:U), Crowdstrike (NASDAQ:CRWD), and Snowflake (NYSE:SNOW) each solve headache-level problems. Additionally, they have great expansion opportunities, making them smart buys for 2022 and beyond.
Developing a video game is difficult. Without an engine to build the base game on, it would take years to create a workable program. Unity Software brings these ideas to fruition through its 3D animation solution. Additionally, once the game is launched Unity offers tools to monetize it, acquire a new audience, and analyze player behavior, creating an information loop for game improvements. This is not just useful for video games; Unity’s animation programs can also bring industrial designs to life and build augmented and virtual reality models for an immersive experience.
Unity’s third-quarter results were impressive. Its total revenue was up 43% to $286.3 million. Operate solutions — the segment that manages programs — increased the fastest at 54%. It also made up 65% of total revenue. It’s a a positive sign when the largest segment is also growing the quickest. A key business metric management identified is customers spending greater than $100,000 annually. That count increased to 973 from 739, up 32% over the last year.
Valuation has been a roller-coaster ride for Unity since going public in 2020.
While its price-to-sales (P/S) ratio is down from its high, it is also far from its low. Forty times sales isn’t cheap, but Unity has been delivering great results throughout the year. Moving into 2022, investors should watch its large customer spending count as well as future partnerships. During Q3, it announced a joint venture with UFC utilizing Unity’s Metacast software to create an immersive fan experience. Unity’s offerings have nearly unlimited use cases, so investors would be wise to purchase some stock because of its wide potential.
One vulnerable component in any network system is the access points. Malicious programs can be downloaded from the internet on a single laptop and wreak havoc on an entire business network, potentially holding it or its information for ransom. Crowdstrike secures these endpoints with its leading Falcon platform. Its cloud-native security protects devices no matter where employees are accessing a company’s network. Once a customer signs on, Crowdstrike has multiple other solutions to expand defense capabilities. In fact, 68% of subscribers utilize four or more modules.
2021 has been a successful year; Crowdstrike’s annual recurring revenue (ARR) increased to $1.51 billion, up 67% from Oct. 31, 2020. Q3 total revenue was $380 million, up 63% for the period ending Oct. 31, with subscription revenue making up $357 million. While Crowdstrike remains unprofitable, it converted more than 30% of revenue into free cash flow. Customer count increased 75% to 14,687 during Q3 as well.
At its midpoint…
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