2 high SaaS shares to purchase in April

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While software-as-a-service (SaaS) companies have performed excellently over the past year, there has been some sell-off in recent months. This is largely because many investors have moved from expensive tech stocks to undervalued stocks in sectors that are expected to rebound with an economic recovery.

However, a widespread transition of organizations from on-premises systems to cloud-based systems – a transition that is heavily reliant on SaaS solutions – is in full swing and there is no turning back. According to a report from ResearchAndMarkets.com, the global professional cloud services market size is expected grow with a CAGR of 17.2% in the next five years.

Companies like Adobe, Inc. (ADBE) and Salesforce.com, Inc. (CRM) are expected to generate high returns in the near future as the demand for their services increases and more companies adopt hybrid and remote working arrangements as long-term structures. We therefore think it advisable to bet on these stocks now.

Click here to read our Software Industry Report for 2021

Adobe, Inc. (ADBE)

ADBE is one of the largest and most diversified software companies in the world, enabling the design and delivery of extraordinary digital experiences. The company operates in three segments: Digital Media, Digital Experience, and Publishing. The company offers its products and services to corporate customers directly through its sales force and local branch offices, through its website, and through a network of distributors, software providers and developers, retailers and OEMs.

ADBE’s net sales increased 26.3% year over year to $ 3.91 billion for the first quarter of fiscal 2021, which ended March 5, 2021. Revenue in the Digital Media segment increased 32% year over year, while revenue in the Document Cloud increased 37% year on year. Gross profit was $ 3.46 billion, up 31% year over year. The company’s net income increased 32% year over year to $ 1.26 billion. Non-GAAP earnings per share also rose 38.3% year over year to $ 3.14.

For the quarter ending May 31, 2021, analysts expect ADBE’s revenue and EPS to grow 17.9% and 14.7% year over year, respectively. Additionally, it outperformed EPS consensus estimates for each of the past four quarters.

ADBE announced on March 11, 2021 that it would partner with government agencies in all 50 states to drive their digital modernization through Adobe Experience Cloud and Adobe Document Cloud. In December, the company completed the acquisition of Workfront, which will bring efficiency, collaboration and productivity gains to its marketing teams. The stock gained 57.3% over the past year, closing yesterday’s trading session at $ 523.25.

It’s no surprise that ADBE has an overall B rating, on par with buying in ours POWR ratings System. The POWR ratings rate stocks based on 118 different factors, each with its own weighting.

The stock has an A rating for quality and a B rating for sentiment. click Here to see ADBE’s rating for growth, stability, value and dynamism.

ADBE is number 22 of 119 stocks in the Computer program Industry.

Salesforce.com, Inc. (CRM)

CRM is the number 1 customer relationship management company with more than 150,000 companies as customers. It focuses on cloud, mobile, social, Internet of Things (IoT) and artificial intelligence (AI) technologies. The cloud service offering includes Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, Community Cloud, Analytics Cloud, Salesforce Quip and Salesforce Platform.

The company’s net sales for the fourth quarter of fiscal 2021 (ended January 31, 2021) were $ 5.82 billion, up 19.9% ​​year over year. Gross profit increased 19.5% year over year to $ 4.34 billion. The company’s net income was $ 267 million, up 207.6% year over year. Non-GAAP earnings per share were $ 1.04, 57.6% higher than last year.

Analysts expect CRM EPS and revenue for the quarter ended April 30, 2021 to grow 25.7% and 21.4%, respectively, year over year. The stock beat the Street’s EPS estimates for each of the past four quarters.

CRM’s MuleSoft announced last month that TAB Bank will be using MuleSoft to build their open banking strategy and build an ecosystem of partners. The company also announced in March that more than 150 international, federal, state and local government agencies and health organizations are using its technology for vaccine management and COVID-19 tracking. The stock gained 49.7% over the past year, closing yesterday’s trading session at $ 233.

CRM’s strong fundamentals are reflected in the POWR ratings. It has an overall B rating, which is the same as the purchase on our POWR rating system. The stock also has a B rating for sentiment, growth, and quality. Click here to view the additional POWR ratings for CRM (Stability, Value, and Momentum).

CRM ranks 13th out of 61 stocks in the Software business Industry.

Click here to read our Software Industry Report for 2021

ADBE shares were trading at $ 522.82 per share on Friday afternoon, down $ 0.43 (-0.08%). Since the beginning of the year ADBE has gained 4.54%, while the reference index S&P 500 gained 11.84% over the same period.

About the author: Ananyo Guha Niyogi

Ananyo’s keen interest in capital markets, asset management and financial supervision led him to pursue a career as an investment analyst. Its goal is to train individual investors by making complex financial problems easy to understand. More…

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