Since the spread of COVID-19 in March began forcing businesses to mandate that employees stay at home, demand for remote-work tools has surged.
Not surprisingly, the Direxion Work From Home ETF (NYSE:WFH), which ended at a new all-time high on Tuesday, is up around 17% since its inception in late June.
Beyond the high-profile, work-from-home winners such as Zoom Video Communications (NASDAQ:ZM), Slack Technologies (NYSE:WORK), DocuSign (NASDAQ:DOCU), Twilio (NYSE:TWLO), and Crowdstrike (NASDAQ:CRWD), here are three more tech stocks in prime position to further capitalize on the booming trend.
Each is well worth considering ahead of their quarterly reports in the weeks ahead.
1. Citrix Systems: Reports October 22, Before Markets Open
Citrix Systems (NASDAQ:CTXS), which has more than 100 million users across 400,000 organizations, has seen its shares climb around 30% since the start of the year, as stay-at-home orders resulting from the COVID-19 pandemic fueled demand for its remote-work software services.
The tech company, which has corporate headquarters in both Fort Lauderdale, Florida and Santa Clara, California, develops virtual private networking (VPN) software that lets users remotely access work computers and networks over a secured connection.
The stock—which at one point this year was up by as much as 55%—closed at $144.03 on Tuesday, giving the enterprise software maker a valuation of roughly $18 billion.
Citrix, whose earnings and revenue topped consensus views in the second quarter, is projected to report third quarter results on Thursday, Oct. 22 before the U.S. market opens.
Analyst expectations are for earnings per share of $1.24 for the July-September period. Revenue is forecast to increase 4% from the same period a year earlier to $758.28 million, thanks to strong demand for its remote work-from-home software products.
With Citrix transitioning from a license-based revenue model to a more profitable subscription-based strategy, Wall Street will be closely watching annual recurring revenue (ARR) figures—which jumped 54% year-over-year to $949 million in the last quarter—and software-as-a-service ARR numbers, which rose 41% Y-o-Y to $590 million, to see if they can maintain their torrid pace of growth.
In addition to EPS and revenue figures, market players will focus on Citrix’s outlook for the rest of the year and beyond. The virtual desktop software maker guided for full-year fiscal 2020 revenue to be between $3.18 billion and $3.21 billion in its last quarter, up from $3.01 billion in fiscal 2019.
2. ServiceNow: Reports October 28, After Markets Close
ServiceNow (NYSE:NOW) has seen its shares significantly outperform the broader market this year, rising almost 84% in 2020, as investors have gotten increasingly bullish on the cloud-based workflow automation software provider amid the current work-from-home environment.
The Santa Clara, California-based company helps other businesses track and manage digital workflows for enterprise operations. It also provides cloud-based tools to automate tasks for information-technology departments, human resources as well as customer service management.
The stock reached a record high of $522.77 last night, before settling at $518.30, giving the cloud enterprise software maker a market cap of about $100 billion.
ServiceNow, which reported better than expected second-quarter results at the end of July, but disappointed on its guidance, next reports earnings after the closing bell on Wednesday, Oct. 28.
Consensus estimates call for the enterprise software maker to post earnings of $1.03 per share, higher than EPS of $0.99 in the year-ago period. Revenue is expected to total $1.11 billion, up 25% from $885.8 in the same period a year earlier, as the COVID-19 pandemic created soaring demand for its remote workflow tools.
As such, investors will keep an eye on ServiceNow’s update regarding its enterprise customer additions, to see if it can still add big contracts in the current environment. The company announced in its Q2 earnings report that it closed 40 deals with more than $1 million in net new annual contract value, compared to 37 in the preceding quarter.
3. Datadog: Reports November 5, After Markets Close
Datadog (NASDAQ:DDOG), which provides a monitoring and analytics platform for software developers and information technology (IT) departments, has enjoyed a remarkable run this year.
Shares of the New York-based company, which counts names such as AT&T (NYSE:T), FedEx (NYSE:FDX), and Airbnb as customers, have more than doubled this year, as it benefits from surging demand for its cloud observability solutions across the enterprise segment.
The stock, which is up 210% so far in 2020, reached a new a new all-time high of $118.10 yesterday, before ending at $116.87, giving the fast-growing monitoring and analytics platform specialist a market cap of nearly $25 billion.
Datadog—which beat expectations last quarter on results and guidance—next reports financial results after the closing bell on Thursday, Nov. 5.
Consensus estimates call for earnings of $0.01 per share, which would indicate a Y-o-Y EPS growth rate of 100%. Revenue is forecast to surge almost 50% from the same period a year earlier to $144.3 million, reflecting soaring demand for its cloud-based tools as the COVID-19 pandemic forced businesses to accelerate digitization trends.
Beyond the top- and bottom-line numbers, investors will focus on Datadog’s update regarding its total new customer count. The enterprise software maker announced on its Q2 earnings report that it had 12,100 total customers, up 37% year-over-year.
Datadog’s total number of customers with annual recurring revenue (ARR) of $100,000 or more, which jumped 71% to 1,015 in the previous quarter, will also be in focus.
Additionally, investors will be keen to hear further details on Datadog’s recently announced cloud-computing partnership with Microsoft (NASDAQ:MSFT). Under the partnership, which was revealed last month, Microsoft customers will be able to access Datadog tools at the Azure web portal. We expect the deal to positively impact Datadog’s business and increase its customer base in the quarters ahead.