Although the number of COVID-19 cases is gradually declining, the spread of the Delta coronavirus variant remains a concern. So, software solutions should be in demand. As several companies have extended their working hours from home, the need for cloud-based software services is unlikely to abate anytime soon.
In contrast, increasing cybersecurity threats and cyberattacks continue to threaten the software industry. However, consistent innovation and improvements are expected to drive the growth of the industry against a backdrop of rapid digitization across all sectors. According to Statista, the software market revenue is expected to grow at a CAGR of 7.22% to reach $ 823.71 billion by 2026.
In this context, it might make sense to bet on software stocks such as Manhattan Associates, Inc. (MANH), Trend Micro Incorporated (TMICY), American Software, Inc. (AMSWA) and ChannelAdvisor Corporation (ECOM). They might not make the headlines every day, but are well positioned to take advantage of favorable industry winds.
Manhattan Associates, Inc. (MANH)
Supply chain business solutions provider MANH’s solutions consist of software, services and hardware, which coordinate people, workflows, assets, events and tasks across related functions in a supply chain, from planning to execution. It operates through three segments: North America and Latin America; Europe, Middle East and Africa (EMEA); and Asia-Pacific (APAC).
Imperfect Foods, the leading online grocer with a mission to eliminate food waste, selected MANH’s Manhattan Active Warehouse Management on September 13 to modernize its distribution operations and support its rapid and continued growth. This should help increase MANH’s income.
MANH’s net revenue increased 22.5% year-on-year to $ 166.11 million in the fiscal second quarter ended June 30, 2021. Its operating profit was $ 39.36 million dollars, up 47.4% year-on-year. While its net income increased 59.3% year-on-year to $ 30.59 million, its EPS stood at $ 0.48, up 60% year-on-year.
Analysts expect MANH’s revenue and EPS to grow 10.5% and 15.9% year-on-year to $ 648.08 million and $ 2.04, respectively, during the year. fiscal year 2021. Additionally, it has exceeded consensus EPS estimates in each of the past four quarters. Over the past year, the stock has gained 60.3% to close yesterday’s trading session at $ 153.03.
MANH’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, indicating a buy rating in our proprietary rating system. POWR ratings assess stocks based on 118 different factors, each with its own weight.
MANH has an A rating for quality and a B rating for sentiment. Within the Software – Applications industry, it is ranked # 24 out of 151 stocks. Click here to see additional notes for value, growth, stability and momentum for MANH.
Click here to view our Software Industry Report for 2021
Trend Micro Incorporated (TMICY)
Based in Tokyo, Japan, TMICY primarily develops and sells computer and Internet security software. The company offers both hybrid cloud security solutions and network security solutions. In addition, its main products include personal computer (PC) client products, local area network (LAN) server products, and Internet server products.
On September 13, TMICY announced the launch of Trend Micro Family, a digital tool to help parents ensure their children’s screen time is safe, positive and healthy. This move should help the company expand its consumer base. Additionally, it has announced its intention to expand functionality in Trend Micro Family to include support for additional social media applications.
TMICY’s total revenue increased 8.2% year-on-year to 91.33 billion yen ($ 817.03 million) for the six months ended June 30, 2021. Its gross margin increased 5% in year on year to reach 71.24 billion yen ($ 637.35 million). Its operating profit was 22.11 billion yen ($ 197.84 million), an increase of 10.3% year-over-year. In addition, its net profit increased 8.3% year-on-year to 16.13 billion yen ($ 144.34 million).
For fiscal 2021, TMICY’s revenue is expected to grow 145.1% year-over-year to $ 1.67 billion. Its EPS is expected to grow at a rate of 16.3% over the next five years. Additionally, over the past six months, the stock has gained 10% to close yesterday’s trading session at $ 55.77.
It’s no surprise that TMICY has an overall rating of B, which equates to a buy rating in our POWR rating system. Additionally, it has an A rating for stability and quality and a B rating for value.
TMICY is ranked n ° 2 out of 27 stocks in the Software – Security sector. Click here to see additional notes for TMICY (Growth, Feeling and Momentum).
American Software, Inc. (AMSWA)
AMSWA develops, markets and supports a range of computer application software products in the United States and around the world. The company operates through three segments: supply chain management (SCM), information technology consulting (IT consulting) and others.
AMSWA declared a quarterly dividend of $ 0.11 per share, payable December 3. In addition, the company has paid dividends for 17 consecutive years. This represents its solid financial strength.
For the fiscal first quarter ended July 31, 2021, AMSWA’s total revenue increased 7.3% year-on-year to $ 29.27 million. Its operating profit was $ 1.77 million, up 100.3% year-on-year. Its net profit was $ 2.95 million, an increase of 44.9% year-over-year. In addition, its EPS stood at $ 0.09, up 50% year-on-year.
AMSWA’s revenue is expected to grow 8.9% year-on-year to $ 131.14 million in fiscal 2023. Its EPS is expected to increase 25% year-on-year to $ 0.4 next year. Additionally, it has beaten consensus EPS estimates in each of the past four quarters. Over the past year, the stock has gained 67.3% to close yesterday’s trading session at $ 23.75.
AMSWA’s POWR ratings reflect this promising outlook. The stock has an overall rating of A, which equates to a strong buy rating in our proprietary rating system. Additionally, it has an A rating for sentiment and a B rating for growth, stability, and quality.
AMSWA is ranked # 5 in the Software Industry – Applications. Click here to also see AMSWA’s ratings for value and momentum.
ChannelAdvisor Corporation (ECOM)
Ecommerce solutions provider ECOM’s cloud-based SaaS (Software-as-a-Service) platform allows users to manage their product listings, inventory availability, price optimization, search terms, controls and execution, as well as other critical functions on these channels. . Its solutions include various platform modules such as Marketplaces, Dropship, Digital Marketing and Shoppable Media.
ECOM unveiled new enhancements to its multi-channel commerce platform in August 2021, designed to help brands and retailers expand their audience, improve the shopping experience for consumers, and increase product visibility to boost online sales. Thus, this should help boost the sales of the business.
ECOM’s revenue increased 10.9% year-on-year to $ 41.54 million for the fiscal second quarter ended June 30, 2021. The company’s gross profit was $ 32. $ 01 million, up 5.3% year-on-year. In addition, its total assets amounted to $ 201.20 million for the period ended June 30, 2021, compared to $ 180.66 million for the period ended December 31, 2020.
Analysts expect ECOM’s revenue to rise to $ 180.83 million for fiscal 2022, an increase of 9.3 percent year-over-year. In addition, the company’s EPS is expected to increase 17.4% year-on-year to $ 1.01 next year. Additionally, it has exceeded Street EPS estimates in each of the past four quarters. Over the past year, the stock has gained 74.4% to close yesterday’s trading session at $ 25.23.
ECOM’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, indicating a buy rating in our proprietary rating system.
Additionally, ECOM has an A rating for quality and a B rating for value and sentiment. Within the Software – Applications industry, it is ranked No. 21. Also click here to see additional notes for stability, momentum and growth.
MANH stock was trading at $ 153.63 per share on Friday afternoon, up $ 0.60 (+ 0.39%). Year-to-date, MANH has gained 46.06%, compared to a 16.58% increase in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist passionate about the analysis of financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary. Following…