Wall Street’s second-quarter earnings season has all but wound down, but results this week are due from a number of high-flying cloud-based software-as-a-service (SaaS) companies.
Cloud-related software ETFs are trading near their highest levels on record, with the First Trust Cloud Computing ETF (NASDAQ:SKYY) up around 90% since its March low as accelerated enterprise digitization trends resulting from the COVID-19 pandemic boosts demand for cloud-based offerings.
Below are three cloud-based tech sector stocks set to enjoy explosive earnings and revenue gains. Each is worth considering ahead of their upcoming quarterly earnings reports:
1. MongoDB: Reports September 2 After Markets Close
MongoDB (NASDAQ:MDB) shares have more than doubled since hitting a bear market low in mid-March, rising 167% as it benefits from strong demand for its cloud-based, open-source database offering. MongoDB is the most-widely used NoSQL database which provides a mechanism for data storage and retrieval.
The stock closed at $250.72 last night after touching a record high of $254.76 earlier in the session. At current levels, the fast-growing software-as-a-service company has a valuation of roughly $14.6 billion.
MongoDB, whose earnings and revenue easily topped views in the first quarter, is projected to post a loss of $0.40 per share for Q2, widening from a loss of $0.26 per share in the same period a year earlier. Revenue, meanwhile, is expected to rise almost 28% year-over-year to $126.81 million, reflecting booming demand for its Atlas cloud-based database.
As such, Wall Street will be closely watching profits from its Atlas platform, which jumped 75% year-over-year in the preceding quarter. The offering now accounts for more than 40% of MongoDB's total revenue.
Beyond EPS and revenue figures, market players will also focus on MongoDB’s update regarding its outlook for the rest of the year and beyond. The company guided for full-year fiscal 2021 revenue to be between a range of $520 million to $530 million in its last quarter, up from $421.7 million in fiscal 2020.
2. Crowdstrike: Reports September 2 After Markets Close
Cloud-based cybersecurity specialist Crowdstrike (NASDAQ:CRWD) has seen its shares more than triple throughout the coronavirus crisis, soaring an astonishing 350% off its March lows. The cybersecurity leader—whose technology is used to detect and prevent security breaches—has benefited as a rising number of corporations are utilizing its services to make their IT networks more secure.
The stock jumped to a fresh record high of $144.69 yesterday before settling at $143.69, giving the Sunnyvale, California-based company a market cap of approximately $21.8 billion.
Crowdstrike, which easily beat earnings and revenue expectations in the first quarter are forecast to report a loss of $0.01 per share in Q2, narrowing from a loss of $0.18 per share in the same period a year earlier. Revenue is expected to jump 74.4% from the year-ago period to $188.57 million, benefitting from strong demand for its cloud-based Falcon cybersecurity platform amid the shift to the work-from-home environment.
Perhaps of greater interest, investors will keep an eye on CrowdStrike’s total subscription customers, which soared 105% to 6,261 in the previous quarter.
3. DocuSign: Reports September 3 After Markets Close
DocuSign (NASDAQ:DOCU)—widely considered the leader in the e-signature market—has seen its shares thrive in recent months, rebounding about 315% from lows hit in mid-March, on views that less business travel amid the ongoing coronavirus pandemic will lead to more businesses signing contracts electronically over the internet. The company has over 660,000 paying customers and hundreds of millions of users in over 180 countries.
The stock reached an all-time high of $271.44 on Tuesday, before ending at $268.80, giving the San Francisco, California-based software-as-a-service company a market cap of around $49.3 billion.
DocuSign—which reported blowout first-quarter results at the beginning of June—is projected to report earnings of $0.08 per share for Q2, which would indicate a year-over-year EPS increase of 700%. Revenue is expected to rise roughly 35% from the same period a year earlier to $318.57 million, as the COVID-19 pandemic created soaring demand for its Agreement Cloud e-signature platform resulting from the shift to the work-from-home environment.
In addition to the top- and bottom-line numbers, market players will also focus on DocuSign’s update regarding its enterprise customer additions to see if it can maintain its torrid pace of expansion. The company announced on its Q1 earnings report that clients with annual contract values of greater than $300,000 grew 46% from the year-ago period to 473.