The software industry has been one of the major beneficiaries of the pandemic-led switch to remote working and the digital transformation across industries. According to Statista, software market revenue is projected to reach $626.45 billion in 2022, with the United States generating most of the revenues globally. In addition, software revenues are expected to grow at a 7.1% CAGR to $824.85 billion by 2026.
The demand for enterprise software and services has increased significantly in end-use industries, with companies scaling their businesses to increase their efficiency and to cater to a larger market. Furthermore, the hybrid working model is expected to drive the industry’s growth with the widespread adoption of cloud-based platforms and rising demand for industry-specific software.
However, tech stocks had a rough time last month, with the tech-heavy Nasdaq Composite losing close to 9%. But software stocks Park City Group, Inc. (PCYG), SurgePays, Inc. (SURG), and TSR, Inc. (TSRI) outperformed the broader market and were the top performers in the industry.
Click here to check out our Software Industry Report for 2022
Park City Group, Inc. (PCYG)
PCYG in Salt Lake City, Utah, operates as a software-as-a-service provider that designs, develops, and markets proprietary software products. The company offers ReposiTrak MarketPlace, ReposiTrak Compliance and Food Safety solutions, and ReposiTrak Supply Chain solutions.
Last month, XF, an animal and pet food product company, announced that it started using PCYG’s ReposiTrak Compliance Management Solution for easy reception and verification of documentation from its suppliers. PCYG should benefit from this venture.
PCYG’s income from operations increased 84.9% year-over-year to $1.17 million in its fiscal first quarter, ended September 30. Its net income, applicable to common stockholders, grew 96% from its year-ago value to $0.80 million. Its EPS increased 100% from its year-ago value to $0.04.
The Street expects the company’s revenue to increase 3% year-over-year to $5.33 million for its fiscal second quarter, ended December 2021. Likewise, the $0.04 consensus EPS estimate indicates a 75.1% rise year-over-year. PCYG’s shares gained 34.5% in price in January.
SurgePays, Inc. (SURG)
SURG is a telecommunication services provider that offers discounted and free wireless services for federal programs, such as SNAP (EBT) and Medicaid, subsidized wireless service to qualifying low-income customers, offers prepaid wireless plans with talk, text, and 4G LTE data, and client acquisition and retention services for attorneys and law firms by operating digital marketing campaigns. SURG is based in Bartlett, Tenn.
Last month, SURG declared that it had engaged international investor relations specialists MZ Group to lead its comprehensive investor relations and financial communications program across all key markets. Brian Cox, Chairman and CEO of SURG, said, “As the 2022 year begins, we are laser-focused on driving revenue growth and maximizing shareholder value. We believe that having MZ as a partner to broaden our message to the investment community will be integral to achieving a fair valuation to reflect our accomplishments.”
Last December, SURG announced its new development, enabling store owners to sell certain cryptocurrencies to customers. The new offering is expected to allow store clerks to purchase cryptocurrencies between $50 - $1,499. The offering represents an expansion of the SurgePays fintech suite of products expected to bolster the company’s position in the underbanked space.
SURG’s revenues increased 13.6% year-over-year to $14.54 million in its fiscal third quarter, ended September 30. The company’s cash balance came in at $0.64 million, indicating an improvement of 50.8% year-over-year for the nine months ended September 30, while its net cash provided by financing activities improved 117.4% from the prior-year period to $7.48 million. The stock gained 45.5% in price in January.
TSR, Inc. (TSRI)
TSRI operates as a staffing company that focuses on recruiting information technology (IT) professionals for short and long-term assignments, permanent placements, project work, and providing contract computer programming services to its customers worldwide. TSR is headquartered in Hauppauge, N.Y.
TSRI’s net revenues increased 48.5% year-over-year to $23.86 million in its fiscal second quarter, ended November 30. Its income from operations grew 286.1% from its year-ago value to $0.42 million, while its net income, attributable to TSRI, came in at $0.24 million, registering an improvement of 198.4% year-over-year.
TSRI’s EPS increased 192.3% from its year-ago value to $0.12. The stock gained 56.9% in price in January.
Click here to check out our Software Industry Report for 2022
PCYG shares were trading at $8.64 per share on Monday afternoon, up $0.59 (+7.33%). Year-to-date, PCYG has gained 48.97%, versus a -5.68% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
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