Vertical Software Stocks Q3 Earnings: Doximity (NYSE:DOCS) Best of the Bunch
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how the vertical software stocks have fared in Q3, starting with Doximity (NYSE:DOCS).
Software is eating the world, and while a large number of solutions such as project management or video conferencing software can be useful to a wide array of industries, some have very specific needs. As a result, vertical software, which addresses industry-specific workflows, is growing and fueled by the pressures to improve productivity, whether it be for a life sciences, education, or banking company.
The 17 vertical software stocks we track reported a weaker Q3; on average, revenues beat analyst consensus estimates by 1.1% while next quarter's revenue guidance was 1.5% below consensus. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but vertical software stocks held their ground better than others, with the share prices up 12.3% on average since the previous earnings results.
Best Q3: Doximity (NYSE:DOCS)
Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.
Doximity reported revenues of $113.6 million, up 11.2% year on year, topping analyst expectations by 4.1%. It was a very strong quarter for the company, with optimistic revenue guidance for the next quarter and a decent beat of analysts' revenue estimates.
“We’re proud to make medicine mobile, with another quarter of record engagement across our entire platform,” said Jeff Tangney, co-founder and CEO of Doximity.
The stock is up 48.5% since the results and currently trades at $30.44.
Is now the time to buy Doximity? Access our full analysis of the earnings results here, it's free.
Olo (NYSE:OLO)
Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.
Olo reported revenues of $57.79 million, up 22.3% year on year, outperforming analyst expectations by 2.6%. It was a strong quarter for the company, with a significant improvement in its net revenue retention rate and optimistic revenue guidance for the next quarter.
The stock is down 16.2% since the results and currently trades at $4.9.
Is now the time to buy Olo? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Upstart (NASDAQ:UPST)
Founded by the former head of Google's enterprise business Dave Girouard, Upstart (NASDAQ:UPST) is an AI-powered lending platform that helps banks better evaluate the risk of lending money to a person and provide loans to more customers.
Upstart reported revenues of $134.6 million, down 14.4% year on year, falling short of analyst expectations by 3.7%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
Upstart had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is up 12.1% since the results and currently trades at $32.95.
Read our full analysis of Upstart's results here.
Cadence (NASDAQ:CDNS)
With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ:CDNS) offers a software-as-a-service platform for semiconductor engineering and design.
Cadence reported revenues of $1.02 billion, up 13.4% year on year, surpassing analyst expectations by 1.8%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its gross margin.
The stock is up 22.1% since the results and currently trades at $292.8.
Read our full, actionable report on Cadence here, it's free.
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The author has no position in any of the stocks mentioned
