The end of an earnings season can be a good time to discover new stocks and assess how companies are coping with the current business environment. Let’s take a look at how Doximity (NYSE:DOCS) and the rest of the software vertical stocks fared in the second quarter.
Software is eating the world, and while a wide range of solutions, such as project management or videoconferencing software, can be useful for a wide range of industries, some have very specific needs. As a result, the software vertical, which addresses industry-specific workflows, is growing, fueled by pressure to improve productivity, whether in a life sciences, education or banking company.
The fifteen vertical software stocks we track reported a mixed second quarter. As a group, revenues exceeded analyst consensus expectations by 1.9%, while revenue expectations for the next quarter were 1.1% above.
The Fed cut its policy rate by 50 basis points (half a percent) in September 2024, the first in about four years. This marks the end of the most targeted anti-inflation campaign since the 1980s. While the CPI (inflation) numbers have been supportive lately, the employment measures have turned out to be almost worrisome. Markets will assess whether the timing of this rate cut (and more potential ones in 2024 and 2025) is ideal to support the economy or a bit too late for a macro that has already cooled too much.
Fortunately, vertical software stocks have performed well, with share prices up an average of 20% since the last earnings results.
Doximity (NYSE:DOCS)
Founded in 2010 and named after a combination of “docs” and “proximity,” Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.
Doximity reported revenue of $126.7 million, up 16.8% year over year. This print exceeded analyst expectations by 5.7%. Overall, it was a strong quarter for the company, with full-year revenue expectations exceeding analyst expectations.
“We were pleased to deliver strong profits and record engagement last quarter, while outperforming both revenue and results,” said Jeff Tangney, co-founder and CEO of Doximity.
Interestingly, the stock is up 73% since reporting and is currently trading at $44.41.
We think Doximity is a good company, but is it a buy today? Read our full report here, it’s free.
Best Second Quarter: Olo (NYSE:OLO)
Olo (NYSE:OLO), founded by Noah Glass, who wanted to grab a quick cup of coffee on the way to work, provides restaurants and food retailers with software to manage food orders and deliveries.
Olo reported revenue of $70.5 million, up 27.6% year over year, beating analyst expectations by 4.1%. The company had a very strong quarter with full-year revenue guidance exceeding analyst expectations and an impressive improvement in analysts’ GMV (gross merchandise value) estimates.
Olo scored the fastest revenue growth among its peers. The market seems pleased with the results, as the stock is up 4% since reporting. It is currently trading at $4.98.
Is this the time to buy Olo? See our full analysis of earnings results here. It’s free.
Slowest second quarter: Unity (NYSE:U)
Founded as a game studio by three friends in an apartment in Copenhagen, Unity (NYSE:U) is a software-as-a-service platform that makes it easier to develop and monetize new games and other visual digital experiences. generate.
Unity reported revenue of $449.3 million, down 15.8% year over year, beating analyst expectations by 1.7%. Still, it was a slower quarter as analyst expectations were missed.
Unity achieved the slowest revenue growth within the group. Interestingly, the stock is up 52.4% since the results and is currently trading at $21.88.
Read our full analysis of Unity’s results here.
Veeva Systems (NYSE:VEEV)
Built on top of Salesforce as one of the first vertically focused cloud platforms, Veeva (NYSE:VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry.
Veeva Systems reported revenue of $676.2 million, up 14.6% year over year. This figure exceeded analyst expectations by 1.2%. Overall, it was a strong quarter as full-year revenue expectations exceeded analyst expectations and there was meaningful improvement in gross margin.
The stock is up 9% since reporting and is currently trading at $217.33.
Read our full, actionable report on Veeva Systems here. It’s free.
Second Quarter Investments (NYSE:QTWO)
Founded in 2004 by Hank Seale, Q2 (NYSE:QTWO) provides software-as-a-service that enables small banks to offer online banking and consumer lending to their customers.
Holdings reported second-quarter revenue of $172.9 million, up 11.8% year over year. This print exceeded analyst expectations by 1.1%. It was a very strong quarter as analyst expectations and full-year expectations were also impressively exceeded.
The stock is up 19.1% since reporting and is currently trading at $80.42.
Read our full, actionable report on Q2 Holdings here. It’s free.
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