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Tuesday, June 13, 2017

3 Cloud Stocks To Buy Right Now

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In the matter of just a few years, “the Cloud” has evolved from the new feature that your grandmother just can’t quite seem to understand to one of the main factors driving growth in the technology sector. Cloud computing is now an essential focus for software-related companies, and cloud stocks have piqued the interest of many tech-focused investors.

New technologies and changing consumer behavior have changed the shape of the technology landscape, and an industry that was once centered on the personal computer has adapted to survive in the world of mobile computing and the Cloud. The markets have been paying attention, and some of the best tech stocks have been those that are either primarily cloud-based companies, or those that have shown growth in their cloud operations.

With this in mind, we’ve highlighted three stocks that are not only showing strong cloud-related activity, but also strong fundamental metrics. Check out these three cloud stocks to buy right now:

1.       Five9, Inc. (FIVN)

Five9 provides cloud software for contact centers. The company offers software products such as workforce management, speech recognition, predictive dialer, and voice applications, as well as an all-in-one contact center cloud platform. Currently, FIVN holds a Zacks Rank #2 (Buy).

Five9 is still a loss-making company, but it recently surpassed our Zacks Consensus Estimate by 40%, and we’ve seen four positive revisions for its full-year and current-quarter earnings since then. Also, sales are expected to grow by nearly 20% this year and next year. Furthermore, the stock has slumped in the industry-wide tech pullback, which means investors may have a chance to buy at a discount right now.

 

2.       Exa Corporation (EXA)

Exa is a developer of computer-aided engineering simulation software, primarily in the fluid dynamics space. Over the past couple of years, the company has emerged as a cloud player thanks to its ExaCLOUD platform, which gives customers access to its entire simulation suite via a web browser. EXA is currently a Zacks Rank #2 (Buy).

Year-over-year EPS comparisons will be challenging this year, but we’ve seen positive revisions for its full-year and next-year estimates, and our current revenue estimates are calling for sales to continue to grow steadily. The stock has actually dropped year-to-date, but the company has surpassed our earnings expectations in nine consecutive quarters, so this dip could provide a nice buying opportunity ahead of its effort to extend that streak to ten.

 

3.       Paylocity Holding Corporation (PCTY)

Paylocity provides cloud-based payroll and human capital management software solutions for medium-sized organizations. Its products include web payment, HR, impressions, performance management, and time management solutions.

This stock has been on a hot streak ever since it surpassed the Zacks Consensus Estimate for earnings by 133%, adding to its run that has seen the company beat earnings by an average of 70% in each of the trailing four quarters. This is another growth picked, which is evidenced by its “B” grade in that category, and underscored by estimates that call for triple-digit EPS growth and double-digit sales growth over the next two years.

 

Bottom Line

Cloud-based companies have been some of the best performing stocks in the tech sector this year, and these cloud stocks also boast strong fundamental metrics. If you’re looking to add tech stocks to your portfolio right now, this list is probably a good place to start.

Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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Paylocity Holding Corporation (PCTY): Free Stock Analysis Report
 
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Exa Corporation (EXA): Free Stock Analysis Report
 
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June 13, 2017 at 04:53AM

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from Ryan McQueeney

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