2191

Q3 Earnings Outperformers: Autodesk (NASDAQ:ADSK) And The Rest Of The Vertical Software Stocks


Radek Strnad /
2022/01/24 6:06 am EST
Add to Watchlist

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. Let’s have a look at how Autodesk (NASDAQ:ADSK) 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 whole tech sector has been facing a sell-off since late last year and vertical software stocks have not been spared, with share price coming down 39.7% since earnings, on average.

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 weaker quarter for the company, with an underwhelming revenue guidance for the next quarter narrowly missing analyst estimates.

"Our customers continue to embrace and prioritize digital transformation to drive growth, efficiency and sustainability, generating strong demand for Autodesk's platform," said Andrew Anagnost, Autodesk president and CEO.

Autodesk Total Revenue

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

Is now the time to buy Autodesk? 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 delivered 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.

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 guidance both for next quarter and the full year missing analysts' expectations.

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

Read our full analysis of Adobe's results here.

Toast (NYSE:TOST)

Founded by three MIT engineers at a local Cambridge bar, Toast (NYSE:TOST) provides integrated point of sale (POS) hardware, software, and payments solutions for restaurants.

Toast reported revenues of $486.3 million, up 105% year on year, beating analyst expectations by 12.1%. It was a very strong quarter for the company, with an impressive beat of analyst estimates.

Toast scored the strongest analyst estimates beat among the peers. The stock is down 62.9% since the results and currently trades at $22.54.

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

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 strong quarter for the company, with a solid revenue beat and guidance for the next quarter above 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.

The author has no position in any of the stocks mentioned