December 2, 2020

AJ Downing Park

Wicked clever technology experts

Computer Software Stock Outlook: Growth Prospects Solid

1 min read
The Zacks Computer Software industry is housed within the broader Zacks Computer And Technology sector....

  • The software industry is benefiting from the continued digital transformation drive. The last few years have witnessed a series of breakthroughs in cloud computing, predictive analysis, AI, digital personal assistants and IoT, which have set the stage for strong growth. The near-term prospects are bright, given increased spending by enterprises on software procurement.
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    • Continued enterprise investment in big data and analytics along with the ongoing adoption of SaaS opens up significant opportunity for industry players. Notably, cloud offers a flexible and cost-effective platform to develop and test applications and the deployment time is also much shorter compared to legacy systems. SaaS companies are expected to register strong top-line growth on a higher percentage of recurring revenues, subscription gross margin and a lower churn rate.

     

    • The increasing need to secure cloud platforms, amid growing incidents of cyber-attacks and hacking, drives demand for cyber security software. Further, enterprises are focusing on rapid migration to cloud and DevOps technologies to achieve scalability and agility for software development as well as IT operations, which helps in delivering flawless digital experience to clients. This trend has brought immense value to application and infrastructure performance monitoring. It is driving demand for performance management monitoring tools that are not only scalable but also suitable for cloud-based environments.

     

    • Industry participants are facing coronavirus-induced challenging demand environment, which is expected to hurt prospects in the near term. However, the work-from-home and online-learning wave led to a spike in relevant software demand, primarily enterprise communication, workspace management, human capital management among others.

    Zacks Industry Rank Indicates Bright Prospects

    Industry Outperforms Sector and S&P 500

    One-Year Price Performance

     

     

    Industry’s Current Valuation

    Forward 12-Month Price-to-Earnings (P/E) Ratio

     

     

    Bottom Line

    Price and Consensus: BLKB

     

     

    Burlington, MA-based Avid Technology (AVID) develops, markets, sells and supports software, hardware and integrated solutions for video and audio content creation, management and distribution. The consensus mark for this Zacks Rank #2 (Buy) company’s 2020 earnings has risen 51.4% to 53 cents per share in the past 30 days.

    Price and Consensus: AVID

     

     

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    Oracle Corporation (ORCL) : Free Stock Analysis Report
     
    Microsoft Corporation (MSFT) : Free Stock Analysis Report
     
    Intuit Inc. (INTU) : Free Stock Analysis Report
     
    Citrix Systems, Inc. (CTXS) : Free Stock Analysis Report
     
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