2 popular software actions I would avoid this summer


The software industry has been a major beneficiary of the COVID-19 pandemic and is capitalizing on trends in hybrid labor and digital transformation.

However, the strong growth prospects of the industry favor fierce competition between existing and new players in this field. Additionally, investor optimism about the industry’s potential has caused many software stocks to reach valuations that are not supported by their current or expected financials.

Weak fundamentals and potential for earnings growth could drive Snowflake Inc. (SNOW) and Verb Technology Company, Inc. (VERB) experience a short-term downturn. We therefore believe that it is better to avoid these actions this summer.

Click here to view our Software Industry Report for 2021

Snowflake inc. (SNOW)

SNOW provides a cloud-based data platform that offers Data Cloud, an ecosystem that allows customers to consolidate data into a single source to generate meaningful business insights, build data-driven applications, and share data. SNOW is based in San Mateo, California.

On June 8, SNOW unveiled its latest product innovations that redefine what is possible in the Data Cloud. However, the data cloud industry is very competitive, with major players operating in this space, and it may take some time for SNOW to gain significant market share.

SNOW’s operating loss increased 113.3% year-on-year to $ 205.60 million in the fiscal first quarter ended April 30. His net loss amounted to $ 203.22 million, up 117% from the same period last year. The company’s EPS was $ 0.70.

The consensus estimate of revenue of $ 1.11 billion for the current year indicates an increase of 88.2% year-over-year. Analysts expect the company’s EPS to stay negative until at least next year. SNOW shares have fallen 11.9% in the past six months and 10.4% since the start of the year.

SNOW has an overall F rating, which equates to Strong Sell in our property POWR odds system. POWR scores are calculated by considering 118 different factors, each factor being weighted to an optimal degree.

SNOW has an F rating for value and D for growth, stability and quality. It is ranked last among the 73 values ​​of the Technology – Services industry.

Click here to view additional SNOW ratings for Momentum and Sentiment.

Verb Technology Company, Inc. (VERB)

VERB is developing a Software-as-a-Service (SaaS) application platform. VERB’s platform comprises a suite of commercial sales support software products marketed on a subscription basis. VERB provides next-generation CRM lead generation, sales support, and video marketing software applications to sales-based organizations.

VERB’s operating loss increased 141.7% year-over-year to $ 9.33 million in its fiscal first quarter ended March 31. Its net loss increased 328.8% year-on-year to $ 8.35 million. The loss per share of the company was $ 0.16.

Analysts expect VERB’s revenue to grow 28.2% year-on-year to $ 3.59 million in the current quarter, ending September 2021. However, its EPS is expected to remain negative as of less until next year. VERB shares gained 2.1% intraday to close yesterday’s trading session at $ 2.98.

It’s no surprise that VERB has an overall F rating, which equates to a strong sale in our proprietary POWR rating system. The stock also has an F rating for quality and a D rating for value and stability. Among the 132 D-rated actions Software application industry, VERB is ranked # 125.

To see additional VERB notes for sentiment, growth, and momentum, Click here.

Click here to view our Software Industry Report for 2021

SNOW stock was trading at $ 256.27 per share on Tuesday afternoon, up $ 3.99 (+ 1.58%). Year-to-date, SNOW is down -8.93%, compared to a 16.05% increase in the benchmark S&P 500 over the same period.

About the Author: Subhasree Kar

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After obtaining a master’s degree in economics, she acquired knowledge in equity research and portfolio management at Finlatics. After…

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