As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the automation software industry, including Pegasystems (NASDAQ:PEGA) and its peers.
The whole purpose of software is to automate tasks to increase productivity. Today, innovative new software techniques, often involving AI and machine learning, are finally allowing automation that has graduated from simple one- or two-step workflows to more complex processes integral to enterprises. The result is surging demand for modern automation software.
The 5 automation software stocks we track reported a weak Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 4.6% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and automation software stocks have had a rough stretch, with share prices down 9.1% on average since the previous earnings results.
Weakest Q1: Pegasystems (NASDAQ:PEGA) Founded by Alan Trefler in 1983, Pegasystems (NASDAQ:PEGA) offers a software-as-a-service platform to automate and optimize workflows in customer service and engagement.
Pegasystems reported revenues of $330.1 million, up 1.4% year on year, falling short of analysts' expectations by 2.1%. Overall, it was a weak quarter for the company with a decline in its gross margin and a miss of analysts' billings estimates.
“In Q1, we released Pega GenAI BlueprintTM, a revolutionary technology that massively changes the way we engage with our clients to help them re-imagine and evolve their business,” said Alan Trefler, founder and CEO.
Pegasystems delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is up 1.2% since reporting and currently trades at $59.60.
Is now the time to buy Pegasystems? Find out by reading the original article on StockStory, it's free. Best Q1: Jamf (NASDAQ:JAMF)Founded in 2002 by Zach Halmstad and Chip Pearson, right around the time when Apple (NASDAQ:AAPL) began to dominate the personal computing market, Jamf (NASDAQ:JAMF) provides software for companies to manage Apple devices such as Macs, iPads, and iPhones.
Jamf reported revenues of $152.1 million, up 15.1% year on year, outperforming analysts' expectations by 2%. It performed better than its peers, but it was unfortunately a slower quarter for the company with a miss of analysts' billings estimates and a decline in its gross margin.
Jamf scored the biggest analyst estimates beat and highest full-year guidance raise among its peers. Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 9.3% since reporting. It currently trades at $17.89.
UiPath (NYSE:NYSE:PATH)Started in 2005 in Romania as a tech outsourcing company, UiPath (NYSE:PATH) makes software that helps companies automate repetitive computer tasks.
UiPath reported revenues of $335.1 million, up 15.7% year on year, in line with analysts' expectations. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a decline in its gross margin.
UiPath had the weakest full-year guidance update in the group. As expected, the stock is down 33.5% since the results and currently trades at $12.17.
ServiceNow (NYSE:NYSE:NOW)Founded by Fred Luddy, who wrote the code for the company's initial prototype on a flight from San Francisco to London, ServiceNow (NYSE:NOW) offers a software-as-a-service platform that helps companies become more efficient by allowing them to automate workflows across IT, HR, and customer service.
ServiceNow reported revenues of $2.60 billion, up 24.2% year on year, in line with analysts' expectations. Zooming out, it was a weak quarter for the company with decelerating growth in large customers and a miss of analysts' ARR (annual recurring revenue) estimates.
ServiceNow pulled off the fastest revenue growth among its peers. The company added 36 enterprise customers paying more than $1m annually to reach a total of 1,933. The stock is flat since reporting and currently trades at $751.
Appian (NASDAQ:APPN)Founded by Matt Calkins and his three friends out of an apartment in Northern Virginia, Appian (NASDAQ:APPN) sells a software platform that lets its users build applications without using much code, allowing them to create new software more quickly.
Appian reported revenues of $149.8 million, up 10.8% year on year, in line with analysts' expectations. More broadly, it was a weak quarter for the company with a miss of analysts' billings estimates and a decline in its gross margin.
The stock is down 4.6% since reporting and currently trades at $35.03.
This content was originally published on Stock Story
