With the resurgence of COVID-19 cases in several countries, the hybrid working trend is expected to continue. This, along with continuing digitization, should drive the demand for software solutions. Investors’ increasing interest in software stocks is evidenced by the…
SPDR S&P Software & Services ETF’s (XSW) 13.2% returns over the past six months.
The growing need for advanced software products and services in almost every industry should help the software industry keep growing in the coming months. According to Grand View Research, the global business software and services market is expected to grow at an 11.3% CAGR between 2021 – 2028.
Therefore, we think it could be wise to scoop up shares of quality software stocks Open Text Corporation (OTEX – Get Rating), PTC Inc. (PTC – Get Rating), and Progress Software Corporation (PRGS – Get Rating), which are expected to rally in price in the coming months.
Headquartered in Waterloo, Canada, OTEX provides information management software and solutions, such as OpenText security solutions, OpenText Information Management, and OpenText Developer Cloud. Its solutions incorporate collaborative and mobile technologies and are delivered for on-premises deployment through the cloud, hybrid, and managed hosted services models.
On November 8, 2021, OTEX announced its agreement to acquire Zix Corporation, Inc., a leader in SaaS-based email encryption, threat protection, and compliance cloud solutions for small- and medium-sized businesses. OTEX’s CEO and CTO Mark J. Barrenechea said, “Acquisitions of cloud growth assets like Zix highlights our commitment to our Total Growth strategy and approach to cash-based returns.”
OTEX’s total revenues increased 3.5% year-over-year to $832.31 million in its fiscal year 2022 first quarter, ended September 30, 2021. Its gross profit came in at $574.18 million, up 3.4% year-over-year. Its income from operations was $182.69 million, compared to $182.36 million in the year-ago period. And its net income came in at $131.91 million, up 27.6% year-over-year.
Analysts expect OTEX’s revenue to increase 3% year-over-year to $4.35 billion in its fiscal year 2022. Its EPS is estimated to grow 3.9% year-over-year to $4.5 in the next year. Over the past nine months, the stock has gained 11.8% in price to close yesterday’s trading session at $52.13.
OTEX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
OTEX has a B grade for Value, Sentiment, Stability, Growth, and Quality. Within the Software-Application industry, it is ranked #1 of 166 stocks. Click here to see the additional POWR Ratings for Momentum for OTEX.
PTC is a Needham, Mass.-based software and services company that operates worldwide. The company operates in two segments: Software Products and Professional Services. Its solutions accelerate product and service innovation, improve operational efficiency, and increase workforce productivity.
On October 28, PTC unveiled its new ThingWorx Digital Performance Management Solution. The first-of-its-kind offering represents a significant advancement in manufacturing companies’ ability to drive efficiency. Craig Melrose, EVP, Digital Transformation Solutions, PTC, said…
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