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Technology has always been one of the pillars of a global economy. As the world embraces the digital age, a growing demand for its increasing infrastructure follows suit. One of these is your enterprise software. Enterprise software provides companies with critical solutions that allow them to optimize workflow, streamline their operations, and reduce costs.
Enterprise software has grown to be a part of different businesses. It doesn't matter if we're talking about a small to mid-size company or even a behemoth; many work with varying types of enterprise software. As businesses grow, demand rises, and technology evolves - translating into higher sales.
Let's look at three buy-rated companies that are worth checking out right now.
Hubspot (HUBS)
HubSpot, Inc. is a customer relationship management (CRM) platform provider offering cloud-based marketing, sales, service, payment, and content management solutions. The company prides itself as one of the top choices for businesses that wish to scale with its powerful software that does not add unnecessary complexity. The company’s easy-to-use and implement freemium model has rich features, making it popular with small and medium businesses.
HUBS has been growing its customer base as its recent 2nd quarter financials showed its customers growing 23% YoY. Its continued innovation and introduction of new solutions alongside A.I. implementation puts HUBS on a path of even more significant growth. The company has also consistently grown its revenues - in fact, revenues are up by more than 5% in each of the last five quarters alone.
Analyst Ratings
HUBS is also well-loved by analysts; it is being given a “Strong Buy” based on the consensus of 26 financial experts. 21 out of the 26 recommend it as a Strong buy, 2 as a Moderate buy, and 1 as a Hold recommendation. The mean price target for HUBS is $562.08, and the high target is $695.00, an upside of 28.1%.
Fair Isaac Corporation (FICO)
Fair Isaac Corporation is a Montana-based applied analytics company that operates in two primary segments: Credit Scoring and Software. The company provides business-to-business (B2B) and business-to-consumer (B2C) scoring to give their clients predictive credit scores to determine consumer credit risk analysis. It has become a part of consumer lending. FICO also offers decision-management solutions and pre-configured analytics for fraud detection, customer management, compliance, and other process-specific solutions.
The company's recent third-quarter financial results smashed expectations. The company's business-to-business revenues increased by 24% YoY. Software revenues also increased by 16% due to recurring and point-in-time revenues. Its software's annual recurring revenue was also up by 20% YoY. The company also updated its 2023 guidance, with revenue expectations going from $1.48 billion to $1.50 billion and GAAP Net income from $406 million to $428 million.
Analyst Ratings
Analysts rate HUBS as a “Moderate Buy” based on 4 Strong buys, 2 Moderate buys, and two hold recommendations. The mean target price for HUBS is $904.93, and the high target price is $ 1,100.00, an upside of 21.56%.
Service Now (NOW)
ServiceNow, Inc. is an enterprise software company helping industries, governments, and universities digitize their workflow. The company's “Now Platform” enables workflows to connect systems and departments with digital workflows to help plan, build, and operate within the entire technology lifecycle. This lets customers reimagine their workflows to help elevate customer experience and loyalty. These workflows can be tested and deployed onto the Now Platform for their employees to use.
NOW has been experiencing exceptional performance and growth. The company reported a 30% YoY growth on its new net ACV of 70 $1M+ transactions and a total revenue growth of 23% YoY. Additionally, subscription revenue also grew by 25% YoY, and EPS has beat estimates by a whopping 79.07%! That is not the only surprise because the last four quarters are double-digit surprises in the company’s earnings.
Analyst Ratings
Analysts rate NOW as a “Strong Buy” based on 28 Strong buys, 2 Moderate buys, and 2 Holds. The mean target price for NOW is $626.00, and the high target price is $700, an upside of 15.52%.
Final Thoughts
Prominent names like Microsoft, Salesforce, and Oracle have dominated enterprise software stocks. One might argue that you invest in them. True, but if you are looking for ideas separate from what the crowd thinks, it might be better to look at competitors with the necessary qualities to grow. They don't have to grow as big as the giants in the industry, just big enough to make a massive impact on your portfolio.
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