The software industry has been hit hard this year by various market headwinds. The Fed’s interest rate hikes to combat rising inflation could hamper the growth of software companies amid exacerbated supply chain disruptions and semiconductor shortages. However, as the equity markets stabilize, investors have an excellent opportunity to invest in fundamentally strong software stocks from companies that have innovative business models and impressive growth prospects at bargain prices.
The demand for software products and services has increased significantly over the past couple of years due to extended remote working arrangements, continuing digital transformation, and the growing automation of business processes across various industries, including manufacturing, healthcare, transportation, and retail. The global software market revenue is expected to reach $608.70 billion in 2022. Approximately $303.10 billion of the sector’s worldwide revenue is estimated to be generated in the United States. Furthermore, the market is projected to grow at a 5.8% CAGR to $806.20 billion by 2027.
Given these factors, we think it could be profitable to invest in cheap software stocks Yalla Group Limited (YALA) and SilverSun Technologies, Inc. (SSNT) now.
Click here to check out our Software Industry Report for 2022
Yalla Group Limited (YALA)
Headquartered in Dubai, the United Arab Emirates, YALA operates a voice-centric social networking and entertainment platform in the Middle East and North Africa (MENA) region. The company’s platform sells and distributes virtual items and upgrade services. In addition, YALA provides group chatting and gaming services.
Last May, YALA announced a share repurchase program in which the company repurchased 418,289 American depositary shares (ADSs), representing 18,289 Class A ordinary shares, for an aggregate amount of approximately US$3.1 million. This initiative might increase the company’s equity value.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, YALA's revenues increased 39.7% year-over-year to $67.60 million. The company’s operating income improved 13.2% from the prior-year period to $26.80 million. Its net income grew 18.2% year-over-year to $27.60 million. And the company's earnings per ordinary share rose 6.7% year-over-year to $0.16.
The $68.48 million consensus revenue estimate for its fiscal year 2022 first quarter, ending March 31, 2022, represents marginal year-over-year growth.
Shares of YALA decreased 29.7% year-to-date to close yesterday's trading session at $4.72.
YALA's POWR Ratings reflect this promising outlook. It has an overall B grade, which equates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
The stock has a B grade for Quality, Value, and Sentiment. Within the Software - Application industry, it is ranked #19 of 163 stocks.
To see additional POWR Ratings (Growth, Stability, and Momentum) for YALA, click here.
SilverSun Technologies, Inc. (SSNT)
SSNT is a business application, technology, and consulting company that is headquartered in East Hanover, N.J. The company resells enterprise resource planning software and warehouse management system software. It offers training, technical support, and professional services. In addition, SSNT provides cybersecurity, business continuity, data backup, network maintenance, and service upgrade. The company serves small- and medium-sized businesses in the United States.
In January, SSNT acquired the Acumatica division of Dynamic Tech Services, Inc., an Atlanta-based reseller of Acumatica ERP software solutions. “This is a strategic transaction which bolsters our resources and our geographic reach, and further enhances our position as the leading Acumatica reseller in North America,” stated Mark Meller, CEO of SSNT. The acquisition is expected to accelerate SSNT’s growth and business prospects.
SSNT's cash and cash equivalents increased 10% to come in at $7.25 million for the nine months ended Sept. 30, 2021. The company’s total current assets improved 13.6% over the nine-month period to $9.80 million. The net cash provided by operating activities and financing activities amounted to $276,644 and $645,008, respectively.
SSNT stock has declined 24.8% in price year-to-date and 27.9% over the past three months to close yesterday's trading session at $3.36.
SSNT's strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
It has an A grade for Momentum and a B for Quality. Within the Software - Business industry, it is ranked #13 of 60 stocks.
To see additional component grades for SSNT’s Stability, Value, Growth, and Sentiment, click here.
Click here to check out our Software Industry Report for 2022
What To Do Next?
If you would like to see more top stocks under $10, then you should check out our free special report:
What gives these stocks the right stuff to become big winners?
First, because they are all low priced companies with explosive growth potential, that excel in key areas of growth, sentiment and momentum.
But even more important is that they are all top Buy rated stocks according to our coveted POWR Ratings system, Yes, that same system where top-rated stocks have averaged a +31.10% annual return.
Click below now to see these 3 exciting stocks which could double (or more!) in the year ahead:
YALA shares were trading at $4.83 per share on Tuesday afternoon, up $0.11 (+2.33%). Year-to-date, YALA has declined -28.02%, versus a -3.00% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
2 Software Stocks Under $5 to Buy Right Now StockNews.com
