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Winners And Losers Of Q3: Adobe (NASDAQ:ADBE) Vs The Rest Of The Vertical Software Stocks


Radek Strnad /
2022/01/25 6:17 am EST
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The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. With Q4 earnings seasons around the corner, let’s have a look at how Adobe (NASDAQ:ADBE) and the rest of the vertical software stocks fared in Q3.

Software is eating the world, and while a large number of solutions such as project management or video conferencing software can be useful to a wide array of industries, there are industries that have very specific needs. Whether it is life-sciences, education or banking, the demand for so called vertical software, addressing industry specific workflows, is growing, fueled by the pressures on improving productivity and quality of offerings.

The 13 vertical software stocks we track reported a solid Q3; on average, revenues beat analyst consensus estimates by 4.23%, while on average next quarter revenue guidance was 3.87% above consensus. The technology sell-off has been putting pressure on stocks since November and vertical software stocks have not been spared, with share price down 37.5% since earnings, on average.

Weakest Q3: Adobe (NASDAQ:ADBE)

One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.

Adobe reported revenues of $4.11 billion, up 20% year on year, in line with analyst expectations. It was a weaker quarter for the company, with both the full year and next quarter guidance missing analysts' expectations.

“Adobe’s record performance in Q4 resulted in fiscal 2021 revenue exceeding $15 billion,” said Shantanu Narayen, chairman and CEO, Adobe.

Adobe Total Revenue

Adobe delivered the weakest full year guidance update of the whole group. The stock is down 20.6% since the results and currently trades at $499.91.

Is now the time to buy Adobe? Access our full analysis of the earnings results here, it's free.

Best Q3: Doximity (NYSE:DOCS)

Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading professional network for U.S. medical professionals.

Doximity reported revenues of $79.3 million, up 75.8% year on year, beating analyst expectations by 7.9%. It was a stunning quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.

Doximity Total Revenue

Doximity pulled off the highest full year guidance raise among its peers. The stock is down 43.8% since the results and currently trades at $43.

Is now the time to buy Doximity? Access our full analysis of the earnings results here, it's free.

Autodesk (NASDAQ:ADSK)

Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.

Autodesk reported revenues of $1.12 billion, up 18.2% year on year, in line with analyst expectations. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter.

The stock is down 21.9% since the results and currently trades at $237.50.

Read our full analysis of Autodesk's results here.

nCino (NASDAQ:NCNO)

Founded in 2011 in North Carolina, nCino (NASDAQ:NCNO) makes cloud-based operating systems for banks and provides that software as a service.

nCino reported revenues of $70 million, up 29.1% year on year, beating analyst expectations by 5.12%. It was a decent quarter for the company, with a solid beat of analyst estimates.

The stock is down 29.7% since the results and currently trades at $41.55.

Read our full, actionable report on nCino here, it's free.

Upstart (NASDAQ:UPST)

Founded by the former head of Google's enterprise business Dave Girouard, Upstart (NASDAQ:UPST) is an AI-powered lending platform that helps banks better evaluate the risk of lending money to a person and provide loans to more customers.

Upstart reported revenues of $228.4 million, up 249% year on year, beating analyst expectations by 6.31%. It was a good quarter for the company, with a very optimistic guidance for the next quarter.

Upstart achieved the fastest revenue growth among the peers. The popular fintech stock is down eye-watering 71.3% since the results and currently trades at $89.81.

Read our full, actionable report on Upstart here, it's free.

The author has no position in any of the stocks mentioned