Do You Have These Software Stocks On Your Watchlist This Week?
Believe it or not, software plays a key role in helping the world around us function. As a result, software stocks have become top performers on the stock market. From the applications in our devices to the intricate networks that house all our data, software is present. Even before we were hit with a global pandemic, the software industry was known for bringing substantial returns to investors. Because of the current pandemic, software has been propelled into even more important roles.
For instance, online education company Chegg (NYSE: CHGG) continues to help students who are struggling with distance learning. Over 2020, the company's online study platform reached a mind-blowing total of 6.6 million subscribers. In fact, CEO Dan Rosensweig said last week that online education is the "wave of the future." Another great example of how important software has become would be cloud communications company Twilio (NYSE: TWLO). Initially, you would think that the company's platform would mostly be employed by organizations and companies in the business world.
Well, last week, it was announced that the company would be working on providing patient engagement solutions that would help streamline vaccine distribution efforts. With the world of software expanding each day, investors would be wise to look for the top software stocks for their portfolios. With that in mind, here are four to watch this week.
Top Software Stocks To Watch Now
- Smartsheet Inc. (NYSE: SMAR)
- 2U Inc. (NASDAQ: TWOU)
- Zscaler Inc. (NASDAQ: ZS)
- PubMatic Inc. (NASDAQ: PUBM)
Smartsheet offers a cloud-based enterprise platform that enables organizations to manage, automate, and report on work at scale. Essentially, Smartsheet's offerings help organizations by making work processes more efficient, which, in turn, makes for better business outcomes. Not to mention, 80% of Fortune 500 companies rely on Smartsheet for their enterprise management software. Given all of this, it is no wonder that SMAR stock is looking at massive gains of over 160% since the March selloffs. Notably, the company's shares are up by 9% since it announced the latest expansion of its flagship platform on Feb 11.
In detail, the company announced a series of ecosystem partners and product innovations. This brings a slew of new features for existing clients to make use of. In brief, Smartsheet now provides customers with real-time resource management and insight on team activity. This would help with being able to plan staff projects more strategically and optimizing existing workforces to meet changing work demands.
On top of that, the company's expanded partner ecosystem provides thoughtful integrations with other enterprise software platforms. These include Microsoft (NASDAQ: MSFT) Teams, Adobe (NASDAQ: ADBE) Creative Cloud, Salesforce (NYSE: CRM) Connector, and Jira Connector by Atlassian (NASDAQ: TEAM). No doubt, Smartsheet is firing on all cylinders. Could this mean big gains for SMAR stock moving forward? I'll let you decide.
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Another software company in focus would be 2U. The company has a plethora of contracts with non-profit colleges and universities allowing it to offer online degree programs. To begin with, 2U supplies its client institutions with a cloud-based Software-as-a-Service (SaaS) platform. With growing digital learning initiatives, 2U could likely continue playing a key role in facilitating the new era of learning we are in now. In the same way, investors might think that TWOU stock has long-term growth potential moving forward. Seeing as the stock has climbed by over 12% since its recent earnings report last week, this might be the case.
In its full-year 2020 fiscal posted late last Thursday, the company reported a 35% year-over-year increase in total revenue. This added up to a cool $774.5 million in revenue for the fiscal year. Specifically, 2U also saw year-over-year gains of 17% in its degree program revenues and 83% in alternative credential revenues. No doubt, as digital learning has virtually become the main means of study now, 2U has reaped the benefits.
Despite its solid performance, the company continues to expand its course portfolio. Earlier this month, the company announced a collaboration with the Institute for Management Development (IMD), a Top 3 ranked global business school. Given 2U's current momentum, will you be adding TWOU stock to your watchlist this week?
Next up, we will be looking at cloud-based information security company Zscaler. Through its Zscaler Zero Trust Exchange (ZZTE) solution, the company can help thousands of clients with any ongoing or future digital transformation efforts. The ZZTE protects clients from cyberattacks and data loss by securely connecting users, devices, and applications in any location. With gains of over 250% in the past year, investors may be watching to see if ZS stock has more room to run this year.
Well, earlier this month, Zscaler announced that its Zscaler Internet Access (ZIA) offering was being considered for use by the U.S. government. Namely, ZIA is being considered for a High Impact Level certification by the Federal Risk and Authorization Management Program (FedRAMP). Important to note, Zscaler's Private Access (ZPA) service is already authorized by the FedRAMP in this regard.
Seeing as ZIA and ZPA make up its core ZZTE solution, this makes for great news for Zscaler. Why? Crucially, solutions authorized by the FedRAMP at this level protect the government's most sensitive unclassified data in cloud environments. All in all, Zscaler could be looking at a busy year ahead should things go as planned. With this massive expansion in the works, could ZS stock continue to soar? You tell me.
Last but not least, we have online advertising company, PubMatic. PubMatic mainly operates via its all-in-one cloud-based supply-side platform. Generally, the company's cloud infrastructure enables app developers and publishers to increase monetization while improving market reach and client engagement. For buyers, the company offers ad inventory coupled with real-time bidding technology. In light of recovering ad trends as seen in Microsoft's recent quarter fiscal, PubMatic seems to be in a good position for now. Likewise, PUBM stock has seen modest gains of over 69% since it went public in early December.
In the third quarter of 2020, the company saw $127 million in revenue, a 33% year-over-year increase. The emerging ad solutions company now has major operations in North America, Asia Pacific, and Europe, Middle East, and Africa (EMEA) region. According to the company, PubMatic serves close to 63,000 individual domains and apps worldwide as of late January.
In an interview last month, CEO Mukul Kumar said, "We will continue to expand our international presence by making investments in sales, marketing, and infrastructure to support our long-term growth." With PubMatic set to host its first earnings call as a public company on February 23, will you be watching PUBM stock?
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