With the global economy in the doldrums, and many people find themselves under-employed at best or unemplyed at worse, its time for people to take a serious look at the stock market as a viable arena to boost their finances.My blog offers useful insights into the market that will enable even a novice to cash in on Wall Street bonanza.....learn the secrets of the 1% who own 90% of nation's wealth. So welcome aboard the money train.
Showing posts with label Cloud computing stocks. Show all posts
Showing posts with label Cloud computing stocks. Show all posts
AppFolio Inc. (APPF - Free Report) , a Zacks Ranked #1 (Strong Buy), offers cloud-based software solutions for property management and legal industries. It offers AppFolio Property Manager, a solution for the property managers including activities of posting and tracking tenant vacancies, handling the entire leasing process electronically, administering maintenance and repairs with their vendor networks, managing accounting and reporting to property owners. My Case solution for practitioners and small law firms, providing time tracking, billing and payments, client communication, coordination with other lawyers and support staff, legal document management and assembly and general office administration services. Value+ services include Websites and electronic payment services. AppFolio, Inc. is headquartered Goleta, California.
Recent News and Earnings
The company recently reported Q2 17 earnings where they beat both the Zacks consensus earnings and revenue estimates for the fifth consecutive quarter. Total revenues grew by +37%, and total billings were up +32.2% on a year over year (YoY) basis. The Value+ services saw the biggest YoY improvement in revenues as they were up +43%. The Property Management arm of the business saw the number of customers increase by +17% YoY, and the number of units under management rise by +22% YoY. The Legal segment saw customer growth improve by +21% YoY to almost 9,000 customers. The average revenues per unit jumped up by +38% as management streamlined sales, improved marketing performance, and targeted higher value customers.
Due to the impressive quarterly performance, management increased FY 17 guidance from a range between $136-138 million to a range between $138-139 million indicating a +31-32% YoY increase.
The Board of Directors also announced that the current CEO Brian Donahoo will be retiring and that Jason Randall will take over the position. Mr. Donahoo will be available through the end of the year to ensure a smooth transition. Mr. Randall was the SVP, and has been with the company for over nine years. While the retirement was not expected, the street viewed the transition as a positive.
Price and Earnings Consensus Graph
As you can see in the graph below, the company’s stock price and future earnings estimates have been increasing throughout 2017, and are expected to continue to grow into 2018. AppFolio, Inc. Price and Consensus
Due to the impressive quarterly results, improving fundamentals, and increased guidance earnings estimates for Q3 17, Q4 17, FY 17 and FY 18 have all seen positive revisions. Q3 17 jumped up from $0.04 to $0.07, Q4 17 more than doubled from $0.03 to $0.07, FY 17 leaped from $0.15 to $0.32, and FY 18 was elevated from $0.30 to $0.45.
Bottom Line
Management’s ability to acquire new customers, and improve their retention rates has enabled them to see increased earnings and revenues over the past five quarters. This strong trend is expected to continue into 2018 with expected growth in all three segments of the company.
Opinion: After Nutanix IPO, tech giants jump to offer software that manages data stored on private servers and public cloud
Nutanix Inc. co-founder and Chief Executive Dheeraj Pandey attempts to explain hyperconvergence at the company's San Jose headquarters.
Hyperconvergence may never be a household word, but in Silicon Valley, last year’s booming initial public offering of Nutanix Inc. has pushed more big tech companies to jump into the young technology in hopes that it is the next big thing.
Simply put — or as simple as the complex technology can be — hyperconvergence combines storage and computing functions in disparate systems through software on a single device, similar to the software-based virtualization movement sparked by VMware Inc. VMW, +0.89% a decade ago. Just as VMware’s software allows a single computer to host multiple virtual machines running different operating systems, hyperconvergence makes it easier to store and manage data spread across private servers and the public cloud from a single appliance, critical for companies that use a “hybrid” approach to the cloud.
“Everyone and their brother are either thinking about a hyperconverged system or building new ones,” said Richard Fichera, a Forrester Research analyst. “It’s a hot active area right now because it has a high value to its users.”
–– ADVERTISEMENT ––
Just as VMware’s 2007 IPO and subsequent success pushed legacy enterprise-tech companies to jump into that field, last year’s Nutanix NTNX, +1.91% IPO put the spotlight on its pioneering concept of hyperconvergence and has attracted the attention of those same companies, which want a piece of a sector expected to grow into a $6 billion industry in the next few years.
“It is an extremely exciting space,” said Stefanie Chiras, vice president of power systems at IBM Corp. IBM, -0.18% “We are watching the space extremely closely…The growth rates are incredible.”
Gartner projects that hyperconvergence revenue will grow at a compounded annual rate of more than 60% in the next few years.
Nutanix, though, is the poster child for this new computing trend, having coined the term “hyperconvergence.” The eight-year-old San Jose, Calif., company was one of just a handful of tech IPOs in 2016, capturing investors’ attention with stunning revenue growth rates, a large and growing customer base and its vision to become a platform company.
Nutanix software is simply trying to make computing mirror life, the company’s co-founder and chief executive told MarketWatch in an interview at the company’s headquarters.
“A life analogy is housing or lodging,” Nutanix CEO Dheeraj Pandey said. “When I go travel for two nights, I rent a hotel. When I go away for a month, I will rent corporate housing. But if I move for three years, I will own a home.”
With hyperconvergence, companies don’t have to choose between those types of scenarios in computing power, which can be bought through on-premises servers or rented through public-cloud offerings, he said.
“There will be all sorts of different lifespans of owning and renting [computing power]. At the end of day, we are not as wedded to the idea of renting, as we are to converging the two. We have always been about converging.”
How 4D mapping could change the way we live and work
Mapping-software company HERE is owned by the biggest German automotive companies - BMW, Audi and Mercedes owner Daimler. HERE CEO Edzard Overbeek spoke to MarketWatch about the evolution of maps from two to three and, eventually, four dimensions.
Pandey noted that when the company was founded in 2009, the cloud had not really taken off yet, but that made his company’s technology popular with companies that were just starting to move to cloud computing.
“We had to start it ‘on-prem,’” he said, referring to computing systems or data centers on a customer’s premises, instead of in the cloud. “The large enterprises want the first step toward cloud…its actually a five-year journey.”
He noted that in public cloud systems, VMware’s software, which partitions parts of a server to run different operating systems, is not even visible to the user.
“Why shouldn’t it be the same experience in private cloud?” he asked.
For the large tech companies that are not offering public cloud services like Amazon.com Inc.’s AMZN, -0.38% Amazon Web Services and Microsoft Corp.’sMSFT, -0.08% Azure, hyperconvergence represents an opportunity to address the so-called hybrid cloud market. While cloud computing has become popular, many experts consider a hybrid approach will prevail in the end, as companies look to keep their most important or sensitive data on servers they own and maintain.
“Hybrid cloud — that is, cloud-style systems or infrastructures that run in private data centers but interact with public clouds like AWS and Azure — has become the methodology of choice for most enterprise customers,” said Charles King, an analyst with Pund-IT, in an email.
Many large tech providers were far too late to challenge for the cloud-computing market, since building up a public cloud service is a huge infrastructure expense and Amazon got quite a head start.HPE and Cisco, for example, have both recently abandoned their public cloud efforts as they eye a hybrid approach.
Even companies that have succeeded in offering public cloud services see value in hyperconvergence. Sid Roy, group program manager for Microsoft’s Windows Server group, said many customers looking to upgrade hardware find the cost to upgrade their storage systems is daunting, and look for a different approach.
“Enterprise service providers are very conscious about cost, where storage can be up to 60% of the data center costs,” Roy said. “If you are not ready to go to the cloud but you are thinking of lowering your storage costs, hyperconverged is a good way to go. …Hyperconverged is a key part of our private cloud strategy.”
The growth rate for the hyperconvergence market is potentially huge, with a 60.5% compounded annual growth rate projected for the next several years, according to market research firm Gartner Inc.
“We would call hyperconvergence the fastest-growing segment of the integrated systems market,” said George Weiss, a Gartner analyst. “We are forecasting it to be a $6 billion market by 2020,” compared with $1.2 billion in 2016.
As should be expected in the tech world, there are a raft of startups seeking to challenge Nutanix or potentially get gobbled up by the tech giants looking to jump into the sector. Cloudistics, an on-premises cloud infrastructure software developer founded in 2013, has raised about $16 million in venture funding; Atlantis Computing, founded in 2006, has raised $32.2 million from investors; and Pivot3, founded in 2002 by veterans of VMware and Compaq, has raised $253 million in venture funding, with its own software storage technology in a configurable, converged appliance.
With companies large and small nipping at its heels, Nutanix isn’t standing still, as it looks to eventually become a bigger platform, with networking and security next on its list to conquer.
“Hybrid becomes the new battleground,” Pandey said. “The aspiration is a platform for the whole infrastructure. There is no misconception that it will happen overnight. Think of AWS, they started in the 2006 time frame, it has taken them 10 years to get here.”
A lot could happen in the next 10 years to disrupt a profitable path for hyperconvergence, but if large enterprises do opt for hybrid-cloud systems as many expect, the hype for the technology could be justified.
Nutanix shares have lost 34% in the year so far, while the S&P 500 SPX, -0.08% has gained 5%.
Alarm.Com Holdings, Inc. (ALRM - Free Report) : This provider of cloud-based software platform solutions has witnessed the Zacks Consensus Estimate for its current year earnings increasing 2.6% over the last 30 days.
Catabasis Pharmaceuticals, Inc. (CATB - Free Report) : This clinical-stage biopharmaceutical company has seen the Zacks Consensus Estimate for its current year earnings advancing 0.6% over the last 30 days.
Extended Stay America, Inc. (STAY - Free Report) : This owner and operator of hotels in the United States and Canada has witnessed the Zacks Consensus Estimate for its current year earnings increasing 0.2% over the last 30 days.
Nivalis Therapeutics, Inc. (NVLS- Free Report) : This clinical stage pharmaceutical company has seen the Zacks Consensus Estimate for its current year earnings improving 2.9% over the last 30 days.
TD Ameritrade Holding Corporation (AMTD - Free Report) : This provider of securities brokerage services and related technology-based financial services has witnessed the Zacks Consensus Estimate for its current year earnings increasing 3.1% over the last 30 days.
Cloud services are increasingly becoming a material part of business for many tech companies, especially to those that may be struggling with revenue growth from more traditional businesses.
"Enterprises are increasingly moving application workloads to the cloud in lieu of replacing older IT systems or building new data centers," Pacific Crest Securities analysts Brent Bracelin and Alyssa Johnson wrote in a note to clients last week. Pacific Crest Securities is a division of KeyCorp. In 2015, the adoption of cloud services by large businesses "created a market tipping point in 2015. Cloud is increasingly material and matters."
As a result, investors should consider 2016 as the kick off for another major investment cycle to support further cloud adoption. Companies including Microsoft, Amazon and Alphabet, among others, noted that they are boosting resources to cloud services this year. Pacific Crest Securities analysts are projecting that capital expenditures in 2016 for cloud services by the top 20 companies offering cloud services could rise 21% year-over-year to $62.7 billion.
Cloud computing, commonly referred to as "the cloud," is the "delivery of on-demand computing resources-everything from applications to data centers-over the Internet on a pay-for-use basis," as described by IBM. There is a business-to-consumer segment, where Facebook and Google, for instance, have significant offerings, such as Google's Gmail and Google Drive and Facebook's photo storage options. And then there is the business-to-business cloud segment, which Pacific Securities estimates that revenue for the top 10 largest cloud providers there is nearing $42 billion on an annualized basis - a figure that is growing 51% year over year and 9% sequentially.
Software as a Service, or SaaS, is slated to remain the preferred cloud computing type, capturing more than two thirds of all public cloud spending by 2019, IDC said in January. However, IDC noted global spending by companies on Infrastructure as a Service, or IaaS, and Platform as a Service, or PaaS, will grow at a faster rate than SaaS with five-year CAGRs of 27% and 30.6%, respectively.
By 2018, most software vendors will have fully shifted to the cloud as a software or platform service. "This means that many enterprise software customers, as they reach their next major software upgrade decisions, will be offered SaaS as the preferred option. Put together, new solutions born on the cloud and traditional solutions migrating to the cloud will steadily pull more customers and their data to the cloud," said Frank Gens, IDC's chief analyst, in the January press release.
It will be large companies driving more than half of the spending on cloud services, but small and mid-size businesses will also be significant contributors to the overall spending, IDC said.
Here are the top 10 companies that are generating high revenue from cloud services in the enterprise space. Pacific Crest Securities determined annualized revenue based on fourth-quarter revenue figures and estimates for those that haven't reported results yet.
10. NetSuite(N - Get Report) NetSuite is a vendor of cloud computing business management software suites. The company caters to businesses in retail, wholesale distribution, manufacturing and non-profit sectors.
NetSuite enables companies to "manage core key business operations in a single system, which includes Enterprise Resource Planning (ERP), Accounting, Customer Relationship Management (CRM), and Ecommerce," according to itswebsite.
NetSuite's fourth quarter annualized cloud revenue is $800 million, up 31% year over year, according to Pacific Crest Securities. While the San Mateo, Calif.-based company plans to spend roughly $50 million on cloud capital expenditures in 2016 (flat compared to 2015), the analysts expect CapEx to be around $54 million this year.
Workday provides enterprise cloud applications for finance and human resources companies in the United States and internationally. It offers applications for customers to manage critical business functions that enable them to optimize their financial and human capital resources.
Workday's fourth quarter annualized cloud revenue is approximately $1.2 billion, up 42% year over year, according to Pacific Crest Securities.
Pacific Crest expects the Pleasanton, Calif.-based company to spend roughly $177 million, an increase of $30 million, on cloud capital expenditures in 2016.
Workday plans to report fiscal 2016 results on Feb. 29.
Workday's executives have a storied history in the tech industry. In the late 1980s, Workday Chairman and co-founderDave Duffield co-founded PeopleSoft -- essentially a predecessor to Workday. He hired Aneel Bhusri (now Workday's CEO) to join him at PeopleSoft and the company grew to be the world's second largest application software company, before it was acquired by Oracle in 2005 in a hostile takeover. The two founded Workday in 2005.
Google Compute's fourth quarter annualized cloud revenue is approximately $1.8 billion, more than doubling year over year, according to Pacific Crest Securities.
Pacific Crest estimates the company's cloud CapEx for its entire cloud businesses (not just B2B) to be $11.4 billion in 2016.
Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio owns shares of Alphabet. "This is the cheapest of the FANG stocks and we continue to hold a sizable position in the stock for ActionALertsplus.com because it defines growth at a reasonable price," Cramer said.
Exclusive Look Inside:
You see Jim Cramer on TV. Now, see where he invests his money and why Alphabet is a core holding of his multi-million dollar portfolio.
Want to be alerted before Jim Cramer buys or sells GOOG?Learn more now.
Rackspace Hosting is a cloud computing and hosting company.
Rackspace's fourth quarter annualized cloud revenue is approximately $2.1 billion, up 14% year over year, estimates Pacific Crest Securities.
Pacific Crest expects the San Antonio-based company to spend roughly $500 million, an increase of $22 million, on cloud capital expenditures in 2016.
San Antonio-based Rackspace will report fourth quarter results on Feb. 16.
Rackspace was nominated by TheStreet as a "Worst Stock in the World," as it's facing steep competition from Amazon,IBM, Alphabet, and Microsoft and others. Shares of the company have fallen just over 45% over the last two years, even as it has tried to reinvent itself as more of a hosting company.
SAP, a German software and services provider, has been ramping up its cloud-based business through acquisitions, such as its 2012 purchase of Ariba, as well as partnerships, such as IBM, to sell cloud-based services.
SAP's fourth quarter annualized cloud revenue is approximately $2.5 billion, more than double the year before, according to Pacific Crest Securities estimates.
Pacific Crest expects SAP to spend roughly $812 million on cloud capital expenditures in 2016, up from $682 million in 2015.
The company had strong growth in its cloud business in 2015, it said in January as part of its preliminary earnings results.
