“The Cloud” has evolved from a budding innovation in tech to one of the largest factors driving growth in the technology sector in only a few years. Today, cloud computing in an integral part of software-related firms, which in turn has seen investors search for cloud-focused tech stocks.
In our increasingly on-the-go and mobile world, cloud computing has dramatically reshaped the way companies conduct business. The technology allows firms big and small, as well as individuals, to access all their vital information nearly anywhere. Cloud computing like the smartphone, is hardly a fad, and it seems nearly impossible to think that people will reverse course—unless the cybersecurity concerns become too high.
Think how much market share Amazon’s AMZN AWS cloud business was able to gain based on its significant head start into the now booming market over rivals and fellow tech giants Microsoft MSFT, IBM IBM, and Google GOOGL. With this in mind, we have highlighted three stocks that are not only showing strong cloud-related activity, but also strong fundamental metrics.
Check out these three Zacks buy-ranked cloud stocks to consider right now.
1. Salesforce CRM
Salesforce is one of the quintessential cloud computing companies in Silicon Valley, offering cloud-based software that enables businesses to run modern digital operations that would otherwise require a ton of in-house talent, infrastructure, and maintenance. CRM’s software-as-a-service model is one that is likely to remain vital and the subscription payments create a more stable revenue stream that has seen it grow its top-line by roughly 25% every quarter for years. Looking ahead to its upcoming Q4 results, Salesforce is expected to see its revenue to surge 24.9% to reach $3.56 billion, based on our current Zacks Consensus Estimate.
At the bottom end of the income statement, Salesforce’s adjusted fourth-quarter earnings are projected to soar 60% and its full-year EPS figure is expected to skyrocket over 93%. Salesforce is currently a Zacks Rank #1 (Strong Buy) based on its recent earnings estimate revision activity and has a solid history of earnings beats. In the end, Salesforce is one of the largest customer relationship management platforms, with clients from American Express AXP to the US Department of Agriculture, and its cloud-based platforms seem poised to help business run sales, marketing, e-commerce, analytics, and more for years to come.
2. Pure Storage, Inc. PSTG
Pure Storage is a data solutions and storage company that helps cloud service providers, SaaS firms, and enterprise clients deliver data securely in real-time within multi-cloud environments. The Mountain View, California-based firm announced last quarter a suite of new cloud offerings that run natively on AWS. The company, which is coming off 34% revenue growth in Q3 and also works with cloud firms such as VMware VMW, has seen its stock price surge 21% in 2019. Still, shares of PSTG rest roughly 34% below their 52-week high, which might set up a solid buying opportunity.
Moving on, the company is projected to see its Q4 fiscal 2019 revenues jump over 31% when it reports its quarterly results on Thursday, February 28. Pure Storage’s bottom-line is expected to pop 38.5% in the fourth quarter and its full-year earnings are projected to swing from a loss of $0.13 a share last year to EPS of $0.26, for a 300% climb. Plus, PSTG has earned some positive full-year fiscal 2019 and 2020 earnings estimate revisions recently to help it earn its Zacks Rank #1 (Strong Buy) standing.
3. Five9, Inc. FIVN
Five9 is one of the largest providers of cloud software for contact centers and has worked to shake up on-premise operations. The firm’s cloud-based virtual contact centers offer clients a suite of apps that allow them to manage customer interactions across everything from social media and email to voice. Five9 just reported its fourth-quarter financial results on Tuesday, which saw its full-year revenues surge 29% a record $257.7 million.
FIVN has also been on an insane run over the last three years, with its stock price up 585% from under $8 a share to its current $52. Looking ahead, the company’s Q1 revenues are projected to jump 20% to $70.69 million. Meanwhile, the company’s quarterly earnings are excepted to soar 50%. Five9 has also earned some full-year 2019 and 2020 earnings revisions in the last seven days to help it earn a Zacks Rank #2 (Buy).
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Pure Storage, Inc. (PSTG) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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Five9, Inc. (FIVN) : Free Stock Analysis Report
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American Express Company (AXP) : Free Stock Analysis Report
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