The cloud computing market has grown exponentially since the COVID-19 pandemic due to the spurring demand for cloud solutions and services to stay functional from anywhere. Businesses continue to shift their operations to cloud platforms for better efficiency.
Moreover, the advancements in cloud-based technologies should keep driving the industry’s growth. The global cloud computing market is expected to reach $947.3 billion by 2026, growing at a CAGR of 16.3%.
Given this backdrop, fundamentally sound cloud-computing stocks Oracle Corporation (ORCL) and Veeva Systems Inc. (VEEV) could be solid additions to your watchlist.
Oracle Corporation (ORCL)
ORCL provides products and services that address all aspects of corporate IT environments, including application, platform, and infrastructure worldwide. The company operates through cloud services and license support, cloud license and on-premises license, hardware, and services segments.
For the fiscal fourth quarter ended May 31, 2022, ORCL’s total revenue increased 5.5% year-over-year to $11.84 billion. The company’s non-GAAP operating income increased 2.6% year-over-year to $5.59 billion. However, its non-GAAP EPS remained flat year-over-year at $1.54.
For the first quarter ending August 31, 2022, ORCL’s EPS and revenue are expected to increase 4.6% and 17.9% year-over-year to $1.08 and $11.47 billion, respectively. It has surpassed the Street EPS estimates in three of the trailing four quarters. Over the past three months, the stock has gained 11.4% to close the last trading session at $76.46.
ORCL’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has a B grade for Sentiment and Quality. Within the Software - Application industry, it is ranked #12 out of 154 stocks. To see the other ratings of ORCL for Growth, Value, Momentum, and Stability, click here.
Veeva Systems Inc. (VEEV)
VEEV is a cloud computing and enterprise software company for the healthcare, pharmaceutical, and life sciences industries. It provides software solutions for the unique needs of companies in these industries, from meeting regulatory standards to conducting clinical trials to managing operations.
On June 21, 2022, ANI Pharmaceuticals, Inc. (ANIP) and VEEV collaborated to define and operationalize data-driven commercial strategies for ANIP's new rare disease business unit. "To serve rare disease patients with high unmet medical needs, we need to be agile, data-driven, and efficient," said Christopher Mutz, head of rare disease at ANI. This reflects the strong demand for the company’s services among its peers.
VEEV’s total revenues increased 16.5% year-over-year to $505.10 million for the first quarter ended April 30, 2022. Its gross profit grew 15.1% year-over-year to $365.59 million. The company’s non-GAAP operating income increased 10% year-over-year to $199.55 million, while its non-GAAP net income rose 8.8% from the prior-year value to $159.79 million. Also, its non-GAAP EPS increased 8.8% year-over-year to $0.99.
Analysts expect VEEV’s EPS for the quarter ended July 31, 2022, to increase 7.5% year-over-year to $1.01. Its revenue for the about-to-be-reported quarter is expected to increase 16.5% year-over-year to $530.70 million. It has surpassed the consensus EPS estimate in each of the trailing four quarters. The stock has gained 30.1% over the past three months to close the last trading session at $214.09.
VEEV’s POWR Ratings reflect solid prospects. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
It has an A grade for Quality and a B for Growth and Sentiment. It is ranked #20 out of 83 stocks in the Medical - Services industry. Click here to see the other ratings of VEEV for Value, Momentum, and Stability.
ORCL shares were trading at $76.63 per share on Tuesday afternoon, up $0.17 (+0.22%). Year-to-date, ORCL has declined -11.06%, versus a -12.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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