The rising demand for cloud-based applications that enable remote working and boost the efficiency of corporate operations is propelling the growth of the software-as-a-service (SaaS) industry. In addition, because…
many companies have delayed their return to office plans amid the resurgence of COVID-19 cases, companies in this space should continue to thrive.
Rapid changes amid dynamic market conditions that include economic uncertainty, competitive rivalry, changing regulations, and technological advancements, are projected to benefit the SaaS market. Indeed, the global SaaS market is expected to reach $253 billion by 2023, representing a 10% CAGR.
Therefore, Wall Street analysts expect fundamentally sound SaaS stocks HubSpot Inc. (HUBS – Get Rating) and GitLab Inc. (GTLB – Get Rating) to rally more than 80% in price in the near term based on their solid growth attributes.
HubSpot Inc. (HUBS – Get Rating)
HUBS in Cambridge, Mass., offers cloud-based customer relationship management (CRM) software to companies in the Americas, Europe, and the Asia Pacific. It also provides professional and phone, email, and chat-based services.
In October, HUBS introduced new enterprise-grade capabilities and improvements at INBOUND 2021 to help organizations better coordinate their data, channels, and teams and seamlessly adapt to each stage of development. HUBS’ latest enhancements provide users with more advanced customization and controls, including increased reporting capabilities and a new enterprise tier of its Operations Hub product.
For the third quarter, ended Sept. 30, 2021, HUBS’ revenue increased 48.5% from its year-ago value to $339.19 million. Its total customers grew 34% year-over-year to 128,144. And its total average subscription revenue per customer rose 9% from the year-ago value to $10,536.
A $1.78 consensus EPS estimate for its fiscal 2021 represents a 34.8% increase year-over-year. HUBS’ revenue is expected to increase 29% in its fiscal 2022. The stock has declined 42.7% in price over the past three months and 32.2% over the past month.
Of 20 Wall Street analysts that have provided ratings for the stock, 16 rated it Buy, and four rated it a Hold. Closing yesterday’s trading session at $452.96, the $845.94 average analyst price target represents a potential 86.8% upside.
GitLab Inc. (GTLB – Get Rating)
San Francisco-based GTLB, through its subsidiaries, creates software for the software development lifecycle. It runs the SaaS-based GitLab.com, which allows users to develop, review, and deploy code. In addition, it provides consulting, training seminars, development, and other support services.
Last month, GTLB, the provider of The DevOps Platform, received ISO/IEC 27001:2013 certification from Schellman and Company, LLC. GTLB was certified on its first attempt, indicating the maturity and efficacy of its information security operation.
Also, last month, GTLB acquired Opstrace, Inc., a developer of open-source observability software. With this acquisition, GTLB continues to define the future of DevOps platforms and expects to be the first to include an integrated open-source observability solution within a single application with…
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