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Reflecting On Vertical Software Stocks’ Q4 Earnings: Toast (NYSE:TOST)


Jabin Bastian /
2022/04/01 7:00 am EDT
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Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q4 now behind us, let’s have a look at Toast (NYSE:TOST) 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 12 vertical software stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 4.86%, while on average next quarter revenue guidance was 2.18% above consensus. Tech stocks have been under pressure since the end of last year and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share price declining 10.3% since earnings, on average.

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 $512 million, up 111% year on year, beating analyst expectations by 4.93%. It was a strong quarter for the company, with an exceptional revenue growth and impressive guidance for the next year.

“The restaurant industry was tested again in 2021, but as evidenced by our growth there is tremendous demand for the Toast platform as restaurant operators navigate the new normal,” said Chris Comparato, CEO, Toast.

Toast Total Revenue

The stock is down 22.7% since the results and currently trades at $21.73.

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

Best Q4: 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 $97.8 million, up 66.7% year on year, beating analyst expectations by 13.4%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.

Doximity Total Revenue

The stock is up 4.81% since the results and currently trades at $52.20.

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

Weakest Q4: 2U (NASDAQ:TWOU)

Originally named 2tor after the founder's dog Tor, 2U (NASDAQ:TWOU) provides software for universities and colleges to deliver online degree programs and courses.

2U reported revenues of $243.6 million, up 13.1% year on year, in line with analyst expectations. It was a weak quarter for the company, with a decline in gross margin and an underwhelming guidance for the next year.

2U had the weakest full year guidance update in the group. The stock is down 24.8% since the results and currently trades at $13.50.

Read our full analysis of 2U's results here.

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 $1.21 billion, up 16.5% year on year, beating analyst expectations by 1.31%. It was a weaker quarter for the company, with revenue guidance missing analysts' expectations for both the full year and the next quarter.

The stock is down 1.7% since the results and currently trades at $214.41.

Read our full, actionable report on Autodesk 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 $485.4 million, up 22.3% year on year, beating analyst expectations by 1.08%. It was a slower quarter for the company, with revenue guidance for the next year below analysts' estimates.

The company added 205 customers to a total of 1,205. The stock is down 7.98% since the results and currently trades at $212.71.

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

The author has no position in any of the stocks mentioned