Even though the majority of the software stocks generated massive returns last year on the back of an increased remote working trend amid the COVID-19 pandemic, investors have been rotating away from expensive tech stocks this year on concerns over rising inflation and to benefit from the strong upside potential of cyclical stocks amid the economic recovery. However, tech stocks’ price retreat has made the valuations of fundamentally strong software stocks reasonable now…
Because the hybrid working model is here to stay, the software industry should witness solid growth this year and beyond. It is also expected to benefit from the ongoing, global digital transformation and increasing automation of processes across several industries, including retail, manufacturing and healthcare. According to Grand View Research, the global business software and services market is expected to grow at an 11.3% CAGR over the next seven years.
Software companies Magic Software Enterprises Ltd. (MGIC – Get Rating), Brightcove Inc. (BCOV – Get Rating), and Immersion Corporation (IMMR – Get Rating) have immense growth potential, but their stocks are currently trading below $20 per share. So, we think it could be wise to bet on them now.
Magic Software Enterprises Ltd. (MGIC – Get Rating)
Headquartered in Or Yehuda, Israel, MGIC provides application development, business process integration platforms, vertical software solutions and related professional services. The company’s product portfolio includes its Magic xpa Application Platform, AppBuilder Application Platform and Magic xpi Integration Platform.
MGIC’s revenue increased 25.9% year-over-year to $107.30 million for the first quarter, ended March 31, 2021. Its non-GAAP net income for the quarter came in at $10.30 million, up 9.5% from the prior-year quarter. And its non-GAAP EPS was $0.21, which represents a 10.5% increase year-over-year.
Analysts expect MGIC’s EPS to increase 23.5% year-over-year to $0.21 for the current quarter, ending June 30. It surpassed consensus EPS estimates in each of the trailing four quarters. Its revenue is expected to increase 22.4% year-over-year to $108.97 million for the quarter ending September 30, 2021.
MGIC introduced FactoryEye to North American manufacturers in April. It is powered by a dynamic IIoT (Industrial Internet of Things) platform. This affordable solution is expected to help mid-sized manufacturers transform data into actionable intelligence and provide visibility from the shop floor to the top floor in real time. The stock has gained…
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