The end of earnings season is always a good time to take a step back and look at who’s excelling (and who’s not so good). Let’s take a look at how software development stocks fared in the third quarter, starting with PagerDuty (NYSE:PD).
As legendary venture capital investor Marc Andreessen says, “Software is eating the world,” and it’s affecting virtually every industry. That’s driving increasing demand for tools that help software developers do their work, whether it’s monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming.
The eleven software development stocks we track reported a very strong third quarter. As a group, revenues exceeded analyst consensus expectations by 2.7%, while revenue expectations for the next quarter were in line.
In light of this news, the companies’ share prices have remained stable as they have risen an average of 1.3% since the last earnings results.
Born out of the frustration of developers being woken up by unprioritized alerts, PagerDuty (NYSE:PD) is a digital operations management platform that helps organizations detect and respond to IT incidents, outages and other critical issues in real time.
PagerDuty reported revenue of $124.5 million, up 4.7% year over year. This print was in line with analyst expectations, but overall it was a slower quarter for the company, with full-year revenue expectations significantly below analyst expectations and next quarter revenue expectations significantly below analyst expectations.
PagerDuty Total revenue
PagerDuty achieved the highest full-year guidance lift, but had the weakest performance against analyst estimates across the group. The company added 76 customers, reaching a total of 15,398. Yet the market seems dissatisfied with the results. The stock has fallen 36.4% since reporting and is currently trading at $12.12.
Read our full report on PagerDuty here, it’s free for active Edge members.
Named after the amphibian that continually evolves from egg to tadpole to adult, JFrog (NASDAQ:FROG) provides a platform that allows organizations to securely create, store, manage and distribute software packages across any system.
JFrog reported revenue of $136.9 million, up 25.5% year over year, beating analyst expectations by 6.6%. The company had an exceptional quarter with an impressive showing of analyst expectations and next quarter earnings estimates exceeding analyst expectations.
JFrog total revenue
JFrog scored the highest analyst estimates among its peers. The company added 45 business customers paying more than $100,000 annually, bringing the total to 1,121. The market seems pleased with the results, as the stock is up 36.4% since reporting. It is currently trading at $64.47.
Is Now the Time to Buy JFrog? See our full analysis of the revenue results here. This is free for active Edge members.
Originally named after the F5 tornado, the most powerful on a meteorological scale, F5 (NASDAQ:FFIV) provides security and delivery solutions that protect applications in cloud, data center and edge environments for large organizations.
F5 reported revenue of $810.1 million, up 8.5% year over year, beating analyst expectations by 2%. Still, it was a slower quarter as full-year earnings expectations significantly missed analyst expectations and revenue expectations for the next quarter fell significantly short of analyst expectations.
As expected, the stock has fallen 15.6% since the results and is currently trading at $245.19.
Read our full analysis of F5’s results here.
With the platform processing more than 30 trillion pieces of IT performance data every day, Dynatrace (NYSE:DT) offers an AI-powered platform that helps organizations monitor, secure and optimize their applications and IT infrastructure in cloud environments.
Dynatrace reported revenue of $493.8 million, up 18.1% year over year. This figure exceeded analyst expectations by 1.3%. Let’s take a step back: It was a satisfying quarter, as it also delivered an impressive increase in analyst EBITDA estimates, but a significant miss in analyst billing estimates.
The stock is down 9.8% since reporting and is currently trading at $44.78.
Read our full, actionable report on Dynatrace here, it’s free for active Edge members.
Fastly (NYSE:FSLY) derives its name from the core benefit it offers customers and operates an edge cloud platform that processes, secures and delivers web content as close to end users as possible, enabling faster digital experiences.
Fastly reported revenue of $158.2 million, up 15.3% year over year. This print exceeded analyst expectations by 4.7%. Overall, it was an exceptional quarter as it also reported earnings per share expectations for the next quarter, which exceeded analyst expectations and an impressive improvement in analyst EBITDA estimates.
Fastly had the weakest full-year guidance update among its peers. The stock is up 28.2% since reporting and is currently trading at $10.35.
Read our full, actionable report on Fastly here. It’s free for active Edge members.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has fallen from its frothy post-pandemic levels. Overall price growth for goods and services has been trending toward the Fed’s 2% target lately, which is good news. The higher interest rates that combated inflation also did not slow economic activity enough to catalyze a recession. A soft landing so far. This, combined with recent interest rate cuts (half a percent in September 2024 and a quarter of a percent in November 2024) has led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the US presidential election in early November, sending major indices to record highs in the week after the election. Still, debates remain about the health of the economy and the impact of potential rate cuts and corporate tax cuts, leaving a lot of uncertainty around 2025.
Do you want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem stocks and add them to your watchlist. These companies are primed for growth regardless of the political or macroeconomic environment.
StockStory’s team of analysts, all seasoned professional investors, use quantitative analysis and automation to deliver market-based insights faster and with higher quality.
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