Our dashboard Trefis Theme: Mid-Cap Software-As-A-Service Stocks provides an overview of the fundamentals of 5 mid-cap SaaS stocks. Kash Rangan, a software analyst at Goldman Sachs, thinks it can become “one of the most strategic application software companies in the cloud industry”. You'll also receive our newsletter and other Opto emails in accordance with our privacy policy. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. These businesses are firing on all cylinders despite stock price volatility. He added that the company is likely to face headwinds related to non-gaming subscriber growth. Is the current growth market correction giving investors a tremendous buying opportunity for these three stocks? If publicly-traded stock of the merchant (or a subsidiary thereof, if applicable) is not available or otherwise capable of being fulfilled for any reason, the stock reward arising from a qualifying transaction will be in an ETF or a publicly traded company available on the Stash Platform. “In our view, Splunk represents one of the few open-ended growth stories in technology, since the more customers use the company’s software, the more those customers want to use it. The global shift to working from home accelerated digital transformation and the adoption of platforms such as Zoom [ZM] and Twilio [TWILO]. The PowerShares Dynamic Software ETF -- which invests primarily in SaaS companies -- has doubled in that time frame, while the broader market is up just 40%. While Microsoft, Adobe, and Salesforce all turn healthy profits, many SaaS companies are not yet profitable, so the standard price-to-earnings ratio that is often used to evaluate stock prices doesn’t apply. Amazon and Microsoft are in fact SKYY's top two stocks, at 5% and 4% of the portfolio, respectively (read: "ETF Of The Week: Cloud Computing Rises"). The company’s $27.7bn purchase of Slack [WORK] — the acquisition is expected to be completed by the end of the second quarter — is poised to help Salesforce challenge Microsoft’s [MSFT] cloud-based communication and collaboration tools, including Teams. May 18, 2021, Manali Bhade | The Dogecoin bull thesis can be easily debunked. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. Long-term investors stand to benefit significantly from these three stocks in a reopening economy. SaaS stocks are popular among investors, and that popularity has shifted into overdrive, thanks to the COVID-19 pandemic. These are two important metrics to consider when evaluating SaaS stocks: An exceedingly high price-to-sales ratio is something to be wary of, regardless of the quality or growth prospects of the underlying company. The company reported year-over-year declines of 5% and 11% for the second and third quarters of the fiscal year 2021, respectively. Invest in great companies, but mind the price you pay. Best China Tech ETFs. The SPDR S&P Software & Services ETF [XSW] grew 57.7% and 13.5%, respectively, during the same periods, while the WisdomTree Cloud Computing Fund [WCLD] was up 99.5% and 10.2%. Tricks of the trade: 7 interviews with the world’s top traders. The Global X Cloud Computing ETF (CLOU) seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data … Byron Deeter and Mary D’Onofrio believe the FAANG stocks’ best growth years are behind … May 16, 2021, Trevor Jennewine | Amazon and Microsoft are in fact SKYY's top two stocks, at 5% and 4% of the portfolio, respectively (read: "ETF Of The Week: Cloud Computing Rises"). May 18, 2021, Jose Najarro | The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. For comparison, the S&P 500 has risen 16.3% in the last 12 months. Product differentiation could become key to attracting and retaining customers as well as satisfying investor appetite. CMC Markets does not endorse or offer opinion on the trading strategies used by the author. The company offers bContact.com, a cloud based business management solution that provides access to an integrated set of business management tools, such as customer relationship management, accounting and banking, invoicing and billing, … Which is why David Cohne is recommending Salesforce.com (CRM), Microsoft (MSFT), and Adobe (ADBE) as the top SaaS stocks for May. However, cloud (i.e. May 16, 2021, Rachel Warren | SolarEdge’s share price has failed to shine this year, despite the global push to hit new carbon emissions targets. Software-as-a-service (SaaS) stocks spent most of 2020 in the clouds. FAANG stocks outperformed major market indexes, like the S&P 500 and Nasdaq 100 Indexes, by a significant margin, of at least 14% annualized since 2010. Subscribe Technologies Inc. develops, acquires, operates, and manages software as a service (SaaS) business in Canada. The company helps organizations to recruit, train, and manage their people. Learn to make money by investing in internet of things companies. Salesforce [CRM] had a solid performance in 2020. These tech stocks can help investors build market-beating portfolios. You should consider whether you can afford to take the high risk of losing your money. WisdomTree's Computing Fund's gains in last 12 months. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination. Salesforce is synonymous with the early Software-as-a-Service wave and was the first iconic IPO of the cloud computing ecosystem. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Disclaimer Past performance is not a reliable indicator of future results. The adoption of digital health services and telemedicine was accelerated during the coronavirus pandemic, but ongoing adoption could provide ample opportunities in the theme. The three SaaS stocks I discussed above are well-positioned to outperform the market and would make an attractive addition to your portfolio of the future. Timothy Green | After reporting exponential user base growth, these software companies’ share prices soared to new heights last year. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 4 Stocks to Keep an Eye On. As more players transition to a subscription model, the SaaS market could become oversaturated. The ETF will be delisted and investors will be paid in back in a round of cash distribution scheduled in Jun 2021. ETFs tracking the SaaS theme have outperformed the broader market in the last 12 months. May 17, 2021, Trevor Jennewine | Includes free newsletter updates, unsubscribe anytime. ... 7 Inverse ETFs … The data monitoring specialist posted impressive first-quarter results. The ETF is focused on large-cap growth stocks within the U.S. technology sector. May 19, 2021, Herve Blandin | Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein. subscription) revenue is gradually growing. https://investorplace.com/2019/03/saas-stocks-to-buy-for-long-term-gains Software ETFs invest in stocks of companies engaged in the research, … Several ride-hailing firms are following vehicle manufacturers in the switch to electric vehicles. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. This timing mismatch means that fast-growing SaaS companies will often post large losses as they scale up their revenue. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. Can commodities offer a port in the storm? The company’s recent earnings have been slightly hampered by its ongoing transition from licensing enterprise software to offering access on a subscription basis, which has meant lower upfront payments. A lack of profits isn’t concerning on its own. A SaaS company must spend heavily upfront on sales and marketing to gain customers, who pay for the product over time. Jushi Holdings and Shopify can handle whatever turbulence the market or the economy throws their way. Given the strength in small-cap SaaS stocks, and demand from subscribers for more similar ideas, we published a Special Report two months ago featuring 10 small-cap SaaS stocks, most of which are growing revenue far above the pace of their peers. SaaS Stock #20: CornerStone OnDemand This is the last stock on our list and the smallest one in terms of market cap, currently at USD$2.3bn. The First Trust Cloud Computing ETF (SKYY) and the Invesco Dynamic Software ETF (NYSE: PSJ) are other funds with similar concepts but also have their faults in terms of composition. 73% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. Instead of tossing your money down the drain, put it to work in these high-quality businesses. The SaaS business model is becoming the norm for the software industry. If you wanted to use productivity software a decade ago, you had no choice but to spend hundreds of dollars to buy outright software that would be out of date in just a few years. SaaS/Cloud computing is expected to grow rapidly over the next 5 years. *Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK. S oftware-as-a-service (SaaS) stocks spent most of 2020 in the clouds. May 16, 2021, Sean Williams | Despite posting weaker-than-expected guidance for the fourth quarter fiscal year 2021 in December, analysts are bullish on Salesforce’s prospects going into the next fiscal year. Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. It reported revenue of $220.3m on a loss of $0.10 per share for the fourth quarter on 4 February, beating analysts’ consensus estimates of $204.2m and $0.14, according to CNBC. Shares in Unity Software may be down 20.8% so far this year to 17 February, but the stock was still up 77.8% since debuting on the Nasdaq at the end of last September.