Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q1 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 17 vertical software stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 2.6%, while on average next quarter revenue guidance was 0.05% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but vertical software stocks held their ground better than others, with the share prices up 19.8% since the previous earnings results, 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 $102.9 million, down 66.9% year on year, beating analyst expectations by 3.19%. It was a very strong quarter for the company, with very optimistic guidance for the next quarter and a decent beat of analyst estimates.
“I’m pleased with the progress we made in Q1 against the objectives I set out last quarter,” said Dave Girouard, co-founder and CEO of Upstart.
Upstart delivered the slowest revenue growth of the whole group. The stock is up 155% since the results and currently trades at $35.95.
Is now the time to buy Upstart? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $819 million, up 53.1% year on year, beating analyst expectations by 7.22%. It was a very strong quarter for the company, with a solid beat of analyst estimates and very optimistic guidance for the next quarter.
Toast pulled off the highest full year guidance raise among its peers. The stock is up 20.4% since the results and currently trades at $23.45.
Is now the time to buy Toast? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $113.7 million, up 20.7% year on year, in line with analyst expectations. Despite topping expectations for revenue and earnings per share, the guidance was underwhelming and drove the narrative.
The stock is down 13.5% since the results and currently trades at $23.75.
Read our full analysis of nCino's results here.
Matterport (NASDAQ:MTTR)
Founded in 2011 before any mass market VR headset was released, Matterport (NASDAQ:MTTR) provides the hardware and software necessary to turn real world spaces into 3D visualization.
Matterport reported revenues of $38 million, up 33.3% year on year, beating analyst expectations by 8.13%. It was a very strong quarter for the company, with an impressive beat of analyst estimates.
Matterport achieved the strongest analyst estimates beat among the peers. The company added 70,000 customers to a total of 771,000. The stock is up 7.81% since the results and currently trades at $2.9.
Read our full, actionable report on Matterport here, it's free.
Veeva Systems (NYSE:VEEV)
Built on top of Salesforce as one of the first vertical-focused cloud platforms, Veeva (NYSE:VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry.
Veeva Systems reported revenues of $526.3 million, up 4.2% year on year, beating analyst expectations by 1.74%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a decline in gross margin.
The stock is up 17.1% since the results and currently trades at $194.
Read our full, actionable report on Veeva Systems here, it's free.
The author has no position in any of the stocks mentioned