Workiva Inc. WK has been benefiting from continuous focus on developing its flagship product, Wdesk cloud platform, which is used for collecting, integrating, managing and analyzing business data. Notably, the platform continues to gain traction.
Workiva’s stock has surged 60.3% in the past year, substantially outperforming the industry’s rally of 1.3%.
The Zacks Consensus Estimate for earnings and revenues is currently pegged at a loss of 10 cents and $62.7 million, representing 47.4% and 15% year-over-year growth, respectively. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy), indicating robust fundamentals and the expectation of outperforming its industry in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
What’s Favoring Workiva?
Workiva came out with a third-quarter 2018 loss of $0.09 per share versus the Zacks Consensus Estimate of a loss of $0.21. This compares to a loss of $0.23 per share a year ago.
The company reported revenues of $60.87 million during the quarter, surpassing the Zacks Consensus Estimate by 1.72%. This compares to year-ago revenues of $52.07 million.
Moreover, the company surpassed earnings estimates in all the trailing four quarters, recording average beat of 43.4%.
Workiva had strengthened its flagship product, Wdesk platform, with new solutions for internal audit management. The announcement was made at Workiva User Conference during its opening session. The new solution provides internal auditors with greater business visibility for better risk management across organizations.
The Financial revealed that per a recent Market Insights Report, the global financial services application market will be worth $117.1 billion by 2023 from $74.35 billion as of 2017. Notably, the market is currently seeing a CAGR of 7.86% and the time period under consideration is 2018-2023. We believe that since Workiva’s platform is mostly used for auditing and accounting, the company will benefit from growth of the relevant market.
Workiva continues to expand its existing customer base with its accounting, SOX and compliance software. This expansion in clientele along with a widening partner ecosystem is expected to drive growth.
Furthermore, according to Gartner, the global SaaS market is anticipated to see a CAGR of 18.1% from $60.2 billion in 2017 to $117.1 billion in 2021. We believe Workiva is well poised to capitalize on growth opportunities of its domain.
Workiva’s return on equity (“ROE”) supports its growth potential. The company’s ROE of 150.9% compares favorably with the industry’s average of 3.3%, implying its efficiency in using shareholders’ funds.
Other Stocks to Consider
Some top-ranked stocks in the broader technology sector are Upland Software UPLD, Marvell Technology Group Ltd. MRVL and Twitter, Inc. TWTR, all flaunting a Zacks Rank #1.
Long-term earnings growth rate for Upland Software, Marvell and Twitter is currently pegged at 20%, 9.4% and 22.1%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Twitter, Inc. (TWTR) : Free Stock Analysis Report
Workiva Inc. (WK) : Free Stock Analysis Report
Upland Software, Inc. (UPLD) : Free Stock Analysis Report
Marvell Technology Group Ltd. (MRVL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research