For Immediate Release
Chicago, IL- January 14, 2016 - Today, Zacks Investment Ideas
feature highlights Features:
Why Now Is the Time to Buy These 4 Software Stocks
SAP, the German multinational software corporation, recently
reported preliminary Q4 revenue of € 6.35B, up 16% y/y. They issued
upside guidance for FY16, with operating profit coming in at
€6.4-6.7B v €6.35B, and with cloud subscription/support revenue up
a whopping 76% y/y. This guidance was a nice surprise to investors
and the stock was rewarded with a 2% move higher.
) has a Zacks Rank #3 (Hold) rating, there may be some better
opportunities presenting themselves in the software sector,
especially in this beaten down market. With the market so negative
at the moment, earnings season has created value in oversold
stocks. A skeptical market will create selling pressure on
companies regardless of their earnings potential.
The value created by this negative environment, along with guidance
from SAP, has these four stocks on every investor's watch list.
) is Zacks Rank #1 (Strong Buy) which designs, develops, markets,
and sells enterprise-ready analytics, mobile, and security software
The stock has started off the year by following the markets lead.
Friday, an announcement of reorganization of the management team,
caused the stock to plummet to a 52 week low of 141.06. The
previous quarter's earnings announcement (in October) was also a
disappointment for the stock, as product and license subscription
service revenue fell 15%.
Valuation for MSTR is getting attractive, with a 1.78B market cap
and a 17.45 Forward PE. Despite the recent negative news, the Zacks
A rated momentum stock is appealing at these levels.
Over the last 60 days, there have been 8 positive estimate
revisions, with the current quarter going from $2.20 per share to
$2.31 per share.
In addition to the positive revisions, the chart below shows four
straight upside surprises. With the exception of last quarter, the
stock price has reacted in a positive manner.
Looking at a five year chart shows significant volatility in the
company's earnings and stock price. A good risk reward scenario
presents itself due to the significant drop in price, positive
estimate revisions, and SAPs guidance.
) is a Zacks Rank #1 (Strong Buy) that is a provider of software
and services designed for non-profit organizations. The company has
many years of experience in this niche market, which separates
itself form larger competitors.
Blackbaud has a 2.8B market cap with a Forward P/E around 40. The
company will have to grow into this valuation with strong revenue
growth over the next year. Last quarter the company guided organic
revenue growth FY17 at 6-10%. This will be the catalyst and if
achieved or surpassed, the stock price will continue the long-term
The chart below shows the long-term trend in price and EPS
surprises, with only two negative surprises over the last three
years. The recent downturn seems highly correlated to the recent
market downturn and could be an opportunity to investors.
) is a Zacks Rank #1 (Strong Buy) and one of the leading suppliers
of application delivery and management software and services.
Citrix powers business mobility through secure, mobile workspaces
providing people with access to applications, desktops, data and
communications on any device, over any network and cloud.
Last quarter, the company decided to spin off its GoTo business and
lay off 1000 workers in a restructuring effort. Interestingly
enough, just this week they acquired Comtrade, which will enhance
the IT department's ability to ensure high-quality mobility
experience for end users. The two moves show investors the company
is not afraid to admit what doesn't work and take action on what
Agreement among analyst estimate revisions leans to the upside.
Over the last 90 days, 10 out of 13 revisions were heading higher,
with next year's estimates moving from 3.31 to 3.63.
The chart below shows that Citrix is loaded with positive earnings
surprises over the last five years. More importantly, the initial
move has typically been to the upside after earnings. With the
recent drag down on the overall markets, the company's next
earnings could cause a violent move upwards if they showed another
) is a Zacks Rank #2 (Buy) and is a financial management solutions
whose products include TurboTax, Quicken and QuickBooks. Last
quarter's earnings in November were solid, providing both a top and
bottom line beat. More importantly they raised guidance for Q2 to
$0.17-0.20 v $0.05 expected and Revenue to $880-900M v $826M
expected. They also went onto raise FY16 $3.45-3.50 v $3.43e (prior
$3.40-3.45, R$4.52-4.60B). This is the fifth straight EPS surprise,
and momentum has continued as online Payroll subscribers were up
17% y/y, with QuickBooks online subscribers +57% y/y.
CEO, Brad Smith, went on to say: "We started the fiscal year the
same way we ended the last, with strong momentum across our
businesses as our intense focus on our global cloud strategy takes
shape. We exceeded our subscriber and financial targets in the
first quarter and have raised our earnings per share guidance for
the fiscal year based on these initial strong results and our
acceleration of share repurchases in the quarter."
The chart below shows INTU has held its own in a brutal market and
should benefit when money comes back into the market.
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SAP AG ADR (SAP): Free Stock Analysis Report
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CITRIX SYS INC (CTXS): Free Stock Analysis
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