The COVID-19 pandemic has accelerated the digital transformation across industries, leading to the adoption of new-gen technologies such as cloud computing, artificial intelligence (AI), and the Internet of Things (IoT). Demand for the ‘cloud’ has grown markedly in recent years because it is highly efficient and provides relief from hardware constraints.
According to an International Data Corporation (IDC) report, “whole cloud” spending is expected to surpass $1.30 trillion by 2025, growing at a 16.9% CAGR. With businesses moving towards a digital-first economy, cloud computing is expected to play a pivotal role in bringing efficiency, innovation, and flexibility. Investors’ interest in cloud computing stocks is evidenced by the Global X Cloud Computing ETF’s (CLOU) 27% returns over the past year and 5.7% gains over the past month.
Quality cloud computing stocks Workday, Inc. (WDAY), Veeva Systems Inc. (VEEV), and Commvault Systems, Inc. (CVLT) are well-positioned to gain this month and beyond. So, we think it could be wise to scoop up their shares now.
Click here to check out our Cloud Computing Industry Report for 2021
Workday, Inc. (WDAY)
WDAY, in Pleasanton, Calif., delivers enterprise cloud applications worldwide, helping its customers manage critical business functions and optimize their financial and human resources. It serves the technology, financial services, business and professional services, healthcare and life sciences, and manufacturing industries.
On September 29, WDAY announced that Google has subscribed to additional WDAY products, including Workday Adaptive Planning, Workday Extend, Workday Prism Analytics, and Workday Strategic Sourcing. This represents the increasing demand for the company’s products and services.
For its fiscal second quarter, ended July 31, 2021, WDAY’s revenues increased 18.7% year-over-year to $1.26 billion. Its non-GAAP operating income increased 13.2% year-over-year to $291.80 million. Also, its non-GAAP EPS increased 46.4% year-over-year to $1.23.
For its fiscal year 2022, analysts expect WDAY’s EPS to increase 25.3% year-over-year to $3.67. Its revenues for the quarter ending January 31, 2021, are expected to increase 19.8% year-over-year to $1.36 billion. It has surpassed the Street’s EPS expectations in each of the trailing four quarters. And over the past year, the stock has gained 35% in price to close yesterday’s trading session at $295.24.
WDAY’s POWR Ratings reflect its solid prospects. The company has an overall B rating, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has an A grade for Growth, and a B grade for Sentiment and Quality. In the 162-stock Software-Application industry, it is ranked #21. Click here to see the additional POWR Ratings of WDAY for Value, Momentum, and Stability.
Click here to check out our Software Industry Report for 2021
Veeva Systems Inc. (VEEV)
VEEV is a global provider of industry-specific, cloud-based software solutions for the life sciences industry. The Pleasanton, Calif.-based company’s solutions help pharmaceutical and life sciences companies realize the benefits of modern cloud-based architectures and mobile applications for their most critical business functions.
On October 13, VEEV announced that the number of biotech firms using Veeva Vault CDMS to run faster, more effective oncology trials had doubled over the last year. The Vault CDMS is a modern cloud application suite that is designed to manage clinical data for today’s builds; it efficiently manages the demands of complex studies.
VEEV’s revenues increased 29% year-over-year to $455.60 million for its fiscal second quarter, ended July 31, 2021. Its subscription revenues increased 29% year-over-year to $366.40 million. The company’s non-GAAP net income increased 31% year-over-year to $152.7 million. In addition, its non-GAAP EPS came in at $0.94, representing a 30.5% year-over-year rise.
Analysts expect VEEV’s EPS and revenue for its fiscal 2022 to increase 21.8% and 25.2%, respectively, year-over-year to $3.58 and $1.83 billion. It surpassed the consensus EPS estimates in each of the trailing four quarters. And over the past six months, the stock has gained 23.8% in price to close yesterday’s trading session at $312.93.
VEEV’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which translates to a Buy in our proprietary rating system.
It has an A grade for Quality, and a B grade for Growth and Sentiment. In the 88-stock Medical-Services industry, it is ranked #22. To see the additional ratings of VEEV (Value, Momentum, and Stability), click here.
Click here to checkout our Healthcare Sector Report for 2021
Commvault Systems, Inc. (CVLT)
CVLT in Oceanport, N.J. is a leader in delivering data readiness, enabling its customers to intelligently manage data with solutions that store, protect, optimize, and use data. Its software automates tasks and makes use of data, which enables its customers to make informed business decisions. Also, its solutions function on the cloud, SaaS, and on-premises environments.
On October 26, CVLT announced that three Managed Service Provider (MSP) partners are joining the Metallic MSP ecosystem, growing the number of MSPs offering Metallic Data Management-as-a-Service (DMaaS) solutions. This is expected to help the company expand its reach by bringing access to industry-leading data protection solutions to more organizations in more geographies.
For its fiscal second quarter, ended September 30, 2021, CVLT’s revenues increased 4% year-over-year to $177.80 million. Its ARR increased 12% year-over-year to $542.60 million. And the company’s non-GAAP EBIT increased 7.3% year-over-year to $31 million. Also, its non-GAAP EPS increased 6.6% year-over-year to $0.48.
For its fiscal 2023, analysts expect CVLT’s EPS and revenues to increase 16.7% and 6.7%, respectively, year-over-year to $2.72 and $803.85 million. It surpassed the Street’s EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 51.4% in price to close yesterday’s trading session at $66.99.
CVLT’s POWR Ratings reflect solid prospects. The company has an overall A rating, which translates to a Strong Buy in our proprietary rating system. It has an A grade for Value and Quality, and a B grade for Growth.
It is ranked #6 of 162 stocks in the Software-Application industry. To check the additional ratings of CVLT for Momentum, Stability, and Sentiment, click here.
Click here to check out our Software Industry Report for 2021
WDAY shares were trading at $300.07 per share on Friday morning, up $4.83 (+1.64%). Year-to-date, WDAY has gained 25.23%, versus a 25.83% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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