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Vertical Software Stocks Q3 Results: Benchmarking Upstart (NASDAQ:UPST)


Kayode Omotosho /
2022/01/20 6:12 am EST
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Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q3 now behind us, let’s have a look at Upstart (NASDAQ:UPST) and its peers.

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. There has been a stampede out of high valuation technology stocks and vertical software stocks have not been spared, with share price down 37.3% since earnings, on average.

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 strong quarter for the company, with an optimistic guidance for the next quarter and an exceptional revenue growth.

“Since Upstart's IPO a year ago, we've more than tripled our revenue, tripled our profits, tripled the number of banks and credit unions on our platform, and tripled the number of auto dealerships we serve,” said Dave Girouard co-founder and CEO of Upstart.

Upstart Total Revenue

Upstart scored the fastest revenue growth of the whole group. The high-flying fintech stock is down 66.1% since the results and currently trades at $105.97.

Read why we think that Upstart is one of the best vertical software stocks, our full report is 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 a strong revenue growth.

Doximity Total Revenue

Doximity achieved the highest full year guidance raise among its peers. The stock is down 43.3% since the results and currently trades at $43.33.

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 weak quarter for the company, with a full year guidance missing analysts' expectations and an underwhelming revenue guidance for the next quarter.

Adobe had the weakest full year guidance update in the group. The stock is down 17.9% since the results and currently trades at $517.50.

Read our full analysis of Adobe's results here.

Olo (NYSE:OLO)

Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.

Olo reported revenues of $37.3 million, up 35.9% year on year, beating analyst expectations by 2.91%. It was a solid quarter for the company, with a very optimistic guidance for the next quarter.

The stock is down 47.3% since the results and currently trades at $15.75.

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

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 strong quarter for the company, with an impressive beat of analyst estimates.

Toast pulled off the strongest analyst estimates beat among the peers. The stock is down 60.4% since the results and currently trades at $24.10.

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

The author has no position in any of the stocks mentioned