2 A-Rated Small Cap Software Stocks to Buy Based on POWR Ratings

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Several emerging trends and breakthroughs are driving the growth of the software industry. Business development, centralized infrastructure, cloud on edge, low-code and no-code development, ramp-up of microservices architectures, and various other trends should maintain the momentum of the industry.

Furthermore, the increasing use of cloud-based platforms, owing to advantages such as flexibility, cost-effectiveness, and mobility, has boosted the demand for cloud-based software solutions in most businesses. Spending on the software market is expected to reach $313.74 billion in 2022.

Against this backdrop, we think it might make sense to bet on small cap stocks Rimini Street, Inc. (RMNI) and eGain Corporation (EGAN) amid the current market volatility. They are rated A (Strong Buy) in our own POWR Rankings system and could deliver significant benefits in the months to come.

Click here to view our Software Industry Report for 2022

Rimini Street, Inc. (RMNI)

With a market cap RMNI of $447.73 million in Vegas is a global provider of enterprise software, products and services that support various industries. The company provides software support services for Oracle and SAP enterprise software products. Its software support includes application and database management services, security solutions, cloud consulting, and other professional services. RMNI sells its solutions primarily in North America, Latin America, Europe, Africa, the Middle East, Asia and Asia-Pacific.

Last month, Staffmark Group, a staffing and recruitment company, began leveraging RMNI to support and maintain Staffmark Group’s PeopleSoft system environment. RMNI believes this should improve its competitive edge and drive growth.

RMNI’s revenue for the third fiscal quarter, ended September 30, 2021, increased 15.9% year-over-year to $95.64 million. The company’s gross profit rose 23.2% from its value a year ago to $62.27 million. His operating result increased 66% from the prior year quarter to $7.53 million. Additionally, the company’s net profit was $1.93 million during the period.

RMNI’s revenue is expected to increase 11.9% year-over-year to $415.75 million in its fiscal 2022. Its EPS is expected to increase 210.5% in fiscal 2022 The stock price has gained 4.5% over the past five trading days.

RMNI’s strong fundamentals are reflected in its POWR ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. POWR ratings rate stocks on 118 separate factors, each with its own weighting.

Additionally, the stock has an A rating for quality and a B for growth and value. We also scored RMNI for Sentiment, Stability, and Momentum. Click here to access all RMNI ratings. RMNI is ranked No. 3 out of 171 stocks in the Software app industry.

eGain Corporation (EGAN)

Incorporated in 1997, Based in Sunnyvale, CA EGAN is a software as a service (SaaS) provider serving North America, Europe, the Middle East, Africa and Asia-Pacific. The company offers unified cloud software solutions to automate, augment and orchestrate customer engagement. It also provides solutions to clients in the finance, telecommunications, retail, government and healthcare industries. EGAN has a market capitalization of $324.24 million.

Last month, EGAN obtained Federal Risk and Authorization Management Program (FedRAMP) clearance with sponsorship from the Internal Revenue Service (IRS). This EGAN FedRAMP solution should enable government agencies to easily deliver large-scale digital experiences powered by AI, insights and analytics.

During its first fiscal quarter, ended September 30, 2021, EGAN’s total revenue increased 12.5% ​​year-over-year to $21.45 million. The company’s gross profit rose 11.9% from its value a year ago to $16.15 million. Its operating income is $691,000. In addition, the company’s net profit amounted to $551,000 during the period.

Analysts expect EGAN’s revenue to grow 14.6% year-over-year to $89.72 million in its fiscal 2022. The company beat consensus estimates for the EPS in three of the last four quarters. Its EPS is expected to rise 333.3% in fiscal 2022. And the share price has jumped 5.1% in the past nine months.

EGAN’s POWR ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has an A rating for sentiment and quality and a B for value.

In addition to the POWR ratings I just highlighted, one can see EGAN’s ratings for Growth, Stability, and Momentum. here. The stock is ranked #5 in software App industry.

Click here to view our Software Industry Report for 2022

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Shares of RMNI were trading at $5.26 per share on Tuesday morning, up $0.11 (+2.14%). Year-to-date, the RMNI is down -11.89%, compared to a -5.25% rise in the benchmark S&P 500 over the same period.

Priyanka is a passionate investment analyst and financial journalist. After earning a master’s degree in economics, her interest in financial markets motivated her to begin her career in investment research. Following…

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