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 Akamai (NASDAQ:AKAM) and the rest of the software development stocks fared in Q4.
Software is eating the world, as Marc Andreessen says, and there is virtually no industry left that has been untouched by it. That in turn drives increasing demand for tools that help software developers do their jobs, whether it is monitoring critical cloud infrastructure, integrating audio and video functionality or ensuring smooth streaming of content.
The 13 software development stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 5.08%, while on average next quarter revenue guidance was 1.67% above consensus. There has been a stampede out of high valuation technology stocks , but software development stocks held their ground better than others, with share price down 7.09% since earnings, on average.
Founded in 1999 by two engineers from MIT, Akamai (NASDAQ:AKAM) provides software for organizations to efficiently deliver web content to their customers.
Akamai reported revenues of $905.3 million, up 6.98% year on year, beating analyst expectations by 1%. It was a mixed quarter for the company, with a slow revenue growth.
"Akamai's outstanding fourth quarter performance capped off an excellent year on both the top and bottom lines," said Dr. Tom Leighton, Chief Executive Officer of Akamai.
Akamai delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is up 6.27% since the results and currently trades at $117.90.s
Best Q4: GitLab (NASDAQ:GTLB)
Founded as an open-source project in 2011, GitLab (NASDAQ:GTLB) is a leading software development tools platform.
GitLab reported revenues of $77.7 million, up 76.2% year on year, beating analyst expectations by 10.6%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.
GitLab scored the highest full year guidance raise among its peers. The stock is up 44.6% since the results and currently trades at $47.90.
Is now the time to buy GitLab? Access our full analysis of the earnings results here, it's free.
Weakest Q4: Bandwidth (NASDAQ:BAND)
Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.
Bandwidth reported revenues of $126.1 million, up 11.5% year on year, beating analyst expectations by 6.72%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analyst estimates.
Bandwidth had the weakest full year guidance update in the group. The company added 55 customers to a total of 3,228. The stock is down 32.2% since the results and currently trades at $31.44.
Sumo Logic (NASDAQ:SUMO)
Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.
Sumo Logic reported revenues of $67 million, up 23.8% year on year, beating analyst expectations by 4.23%. It was a mixed quarter for the company, with a very strong guidance for the next year but an underwhelming revenue guidance for the next quarter.
The stock is down 4.93% since the results and currently trades at $10.21.
Founded in 2014 by former engineers at WebEx and based in China, Agora (NASDAQ:API) provides a cloud platform that makes it easy for developers to integrate real-time audio and video functionalities in their apps.
Agora reported revenues of $40.3 million, up 21.4% year on year, beating analyst expectations by 6.41%. It was a weaker quarter for the company, with full year guidance missing analysts' expectations.
The company added 106 customers to a total of 2,670. The stock is down 17.2% since the results and currently trades at $8.28.
The author has no position in any of the stocks mentioned