The US stock market has entered correction territory, with the Nasdaq Composite and S&P 500 down 11.4% and 7.5% respectively since the start of the year. Last week. the market has witnessed its worst week since March 2020 due to concerns over impending interest rate hikes and overvalued equities. The technology and software sectors saw a sharp decline. However, according to Nuveen, the outlook for software is bright because demand remains robust.
Remote lifestyles and continuous digitization are helping to drive the global demand for the software industry. As a result, some high-growth tech stocks are currently trading at record highs, reflecting investors’ optimistic outlook. According to a recent market study by Technavio, the ISV market is expected to grow by 13.3% CAGR of 2021 – 2026.
So we think it might be a good idea to add SS&C Technologies Holdings, Inc. quality software stocks (SSNC) and Verint Systems Inc. (VRNT) to his wallet now. They are currently trading near their 52-week highs.
SS&C Technologies Holdings, Inc. (SSNC)
SSNC, in Windsor, Connecticut, together with its subsidiaries, provides software products and software serviceses to the financial services and healthcare sectors. It operates through the following geographic segments: United States; Europe; Middle East and Africa; Asia-Pacific and Japan; Canada; and the Americas.
On December 9, 2021, SSNC agreed to acquire Hubwise Holdings Limited. Bill Stone, President and CEO, said, “The addition of Hubwise is a natural step for our successful existing partnership. Additionally, the combination of SS&C and Hubwise will create a one-stop solution for the advisor and distributor community to better address growing competitive and regulatory pressures.
SSNC’s adjusted revenue increased 9.5% year-over-year to $1.27 billion in its fiscal third quarter, which ended September 30, 2021. operating result was $524.1 million, up 16.8% year-over-year. And its adjusted EPS was $1.32, up 20% year-over-year.
Analysts expect SSNC’s revenue to grow 7.2% year-over-year to $5.02 billion in its fiscal 2021. Its EPS is expected to rise 7.9% per year over the next five years. It has exceeded street EPS estimates in each of the past four quarters. And over the past year, the stock price has gained 15.2% to close yesterday’s trading session at $77.18. It is currently trading 9% below its 52-week high of $84.85, which it reached on January 13, 2022.
SSNC’s strong fundamentals are reflected in its POWR Rankings. The stock has an overall A rating, indicating a strong buy in our proprietary rating system. POWR ratings rate stocks on 118 separate factors, each with its own weighting.
SSNC has a B rating for Growth, Sentiment, Stability and Quality. Within the Software – Enterprise industry, it is ranked #2 out of 61 stocks. Click on here to see additional POWR ratings for value and momentum for SSNC.
Verint Systems Inc. (VRNT)
VRNT provides customer engagement solutions worldwide. He helps the world’s most iconic brands, which include more than 85 of the Fortune 100 companies, build lasting relationships with their customers by connecting work, data and experiences across the enterprise.
On December 2, 2021, VRNT CEO Dan Bodner said, “The momentum we saw in the first half continued into the third quarter with strong cloud revenue growth, strong new PLE bookings growth, strong revenue and diluted EPS ahead. clearly ahead of expectations.
VRNT’s total revenue increased 4.5% year-on-year to $224.82 million for its fiscal third quarter, ended October 31, 2021. The company’s non-GAAP net income increased amounted to $52.47 million, up 3.3% year-on-year. Its EPS was $0.12, compared to a loss of $0.08 per share a year ago.
For its 2023 fiscal year, analysts expect VRNT’s revenue to grow 7.1% year-over-year to $937.78 million. Its EPS is expected to grow 14% annually over the next five years. Additionally, it has exceeded consensus EPS estimates in each of the past four quarters. Over the past year, the stock price has gained 33.2% to close yesterday’s trading session at $55.33. It is currently trading 1.1% below its 52-week high of $54.74, which it reached on January 20, 2022.
VRNT’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, indicating a buy in our proprietary rating system. It has a B rating for value and sentiment. Within the Software – Enterprise industry, it is ranked #11. Click on here to see additional POWR ratings for Growth, Momentum, Stability, and Quality for VRNT.
SSNC shares were trading at $77.95 per share Wednesday morning, up $0.77 (+1.00%). Year-to-date, the SSNC is down -4.92%, compared to a -7.18% rise in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions with her insightful commentary. Following…