The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how vertical software stocks fared in Q3, starting with Manhattan Associates (NASDAQ:MANH).
Software (ETR:SOWGn) 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, some have very specific needs. As a result, vertical software, which addresses industry-specific workflows, is growing and fueled by the pressures to improve productivity, whether it be for a life sciences, education, or banking company.
The 4 vertical software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 2% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.8% since the latest earnings results.
Manhattan Associates (NASDAQ:MANH)
Boasting major consumer staples and pharmaceutical companies as clients, Manhattan Associates (NASDAQ:MANH) offers a software-as-service platform that helps customers manage their supply chains.Manhattan Associates reported revenues of $266.7 million, up 11.8% year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
“Manhattan delivered record third quarter and year-to-date results. Our fundamentals are strong, and we continue to deliver a balanced financial performance across top-line growth and profitability and industry leading innovation each quarter,” said Manhattan Associates president and CEO Eddie Capel.
Manhattan Associates delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 6.6% since reporting and currently trades at $273.43.
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Best Q3: Alarm.com (NASDAQ:ALRM)
Founded in 2000 as a business unit within MicroStrategy, Alarm.com (NASDAQ:ALRM) is a software-as-a-service platform that enables users to control their security systems and smart home appliances from a single app.Alarm.com reported revenues of $240.5 million, up 8.4% year on year, outperforming analysts’ expectations by 3.9%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates.
Alarm.com achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6.7% since reporting. It currently trades at $60.96.
Weakest Q3: Bentley (NASDAQ:BSY)
Founded by brothers Keith and Barry Bentley, Bentley Systems (NASDAQ:BSY) offers a software-as-a-service platform that addresses the lifecycle of infrastructure projects such as road networks, tunnel systems, and wastewater facilities.Bentley reported revenues of $335.2 million, up 9.3% year on year, falling short of analysts’ expectations by 1.7%. It was a slower quarter as it posted a slight miss of analysts’ billings estimates and EBITDA in line with analysts’ estimates.
Bentley delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 9.7% since the results and currently trades at $45.05.
Guidewire (NYSE:GWRE)
Founded by two individuals involved in the development of leading procurement software Ariba, Guidewire (NYSE:GWRE) offers insurance companies a software-as-a-service platform to help sell their products and manage their workflows.Guidewire reported revenues of $262.9 million, up 26.8% year on year. This number surpassed analysts’ expectations by 3.5%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.
Guidewire achieved the fastest revenue growth and highest full-year guidance raise among its peers. The stock is down 13.6% since reporting and currently trades at $178.58.
Market Update
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This content was originally published on Stock Story
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