Over the past two years, the software industry has grown tremendously, driven by the acceleration of digital transformation. the changing requirements of the IT landscape a shift to services, such as software as a service (SaaS). Thus, the technology sector is evolving, supported by innovation and technological advancements, including artificial intelligence (AI), 5G, cloud, machine learning, DevOps, software architecture and development.
Despite concerns over the Fed’s plan to raise interest rates to fight inflation, software companies are expected to maintaining high growth rates for longer periods. Software vendors are expanding and improving their business models and accelerating growth through innovation.
Given the backdrop, Wall Street analysts expect software shares Payoneer Global Inc. (PAYMENT), Phunware, Inc. (PHUN)and Exela Technologies, Inc. (XELA) to increase its prices in the coming months.
Click here to view our Software Industry Report for 2022
Payoneer Global Inc. (PAYMENT)
PAYO is a payment and cross-border trade platform. The New York-based company offers a wide range of services, including cross-border payments, tax solutions, working capital, merchant services and risk management. It is aimed at digital businesses, online sellers and freelancers around the world to manage their international payments.
On December 15, 2021, PAYO expanded its partnership with Awin Group, a global marketing technology company, to provide best-in-class payment services to Awin’s publisher base worldwide. The partnership is expected to expand PAYO’s customer reach and increase revenue streams.
On December 7, 2021, PAYO offered working capital to Walmart Inc. (WMT) to US Marketplace sellers to support their growth by reinvesting in their business. The offering includes three flexible capital advance programs that allow sellers to choose the one that best suits their business needs. This offer could reach a new market and increase the company’s profitability.
During the third quarter of its fiscal 2021, ended Sept. 30, PAYO’s revenue grew 35.5% year-over-year to $122.65 million. PAYO’s adjusted EBITDA increased 137.9% year over year to $6.13 million. Of the society Cash and cash equivalents grew 18.9% over the nine months ended September 30, 2021, to $4.25 billion. PAYO’s total assets grew 18.8% year-over-year to $4.36 billion.
Consensus revenue estimate of $559.75 million for fiscal year 2022, ending December 31, 2022, represents 21.6% year-over-year growth over the same period in 2021 The Street expects PAYO’s EPS to improve 68.2% year-over-year. during the next fiscal year.
Over the past five days, PAYO has gained 5.2% in price. Of the two Wall Street analysts who rated PAYO, one rated it Buy, while the other rated it Hold. The 12-month median price target of $10.75 indicates a 104.4% upside potential from yesterday’s closing price of $5.26. Price targets range from a low of $8.50 to a high of $13.00.
Phunware, Inc. (PHUN)
PHUN is an Austin, TX-based integrated software platform provider that provides enterprises with the products, services and solutions needed to engage, manage and monetize their mobile app portfolios. The Company’s products and services include cloud-based mobile software, content management, marketing automation, advertising and location-based services.
This week, PHUN partnered with Campaign Nucleus to integrate Smart Advocacy Solution capabilities with politicians and advocacy groups to personalize their delivery of political content and drive engagement. The partnership is expected to leverage PHUN’s Multiscreen-as-a-Service (MaaS) platform, expand its customer base and increase revenue.
Last month, PHUN announced two new strategic suppliers for high-performance PC series powered by LYTE business unit inspired by Consumer Electronics Show (CES). “Through these new strategic vendor relationships, we’ve taken the guesswork out of selecting the right personal computing systems for the needs of power users,” said Caleb Borgstrom, vice president and general manager, LYTE by Phunware.
PHUN’s revenue from app transactions increased 44.1% year-over-year to $389,000 during its third fiscal quarter of 2021, ended September 30, 2021. Total other PHUN’s revenue grew 512.8% year-over-year to $4.41 million. And the company’s net income rose 104.3% year over year to $372,000.
Analysts expect PHUN’s revenue for the fiscal fourth quarter, ended December 31, 2021, to be $5.03 million, a 149.4% year-over-year increase. other. The Street expects PHUN’s EPS to improve 66.7% year-over-year in the quarter to be reported. The company has an impressive track record of earnings surprises; It has exceeded consensus EPS estimates in three of the past four quarters.
The stock is up 34.6% year-to-date and 16.5% over the past year, respectively. PHUN closed yesterday’s trading session at $3.54.
Each of the two Wall Street analysts who rated PHUN rated it Buy. The 12-month median price target of $4.75 indicates upside potential of 34.2%. Price targets range from a low of $4.00 to a high of $5.50.
Exela Technologies, Inc. (XELA)
XELA provides a wide range of services, including transaction processing, document management, enterprise information management, and digital business process services. The Irving, Texas-based company operates in three segments: Information and Transaction Processing Solutions (ITPS); Healthcare Solutions (HS); and Legal and Loss Prevention Services (LLPS).
On February 8, 2022, XELA purchased a 25,000 square foot multi-level corporate headquarters in Dublin, Ireland. With this investment, XELA is expected to expand its services in the Irish payment space and strengthen its leading position in Europe.
On February 7, 2022, XELA amended its previously announced offer to exchange up to 100 million common shares for 6% senior unsecured notes due 2029, with an increase in the consideration offered for each share of $1.00 to $1.25 per share. As a result, a total of up to $125 million in new notes could be issued.
On February 3, 2022, XELA enrolled over 6,000 users on its Work-From-anywhere platform for intelligent document processing, which leverages the gig economy for exception management and machine learning via a web app. With this user enrollment, XELA is expected to expand the company’s technological advantage.
XELA’s EBITDA increased 30.2% year-over-year to $49.10 million during its fiscal 2021 third quarter, ended September 30, 2021. XELA’s net loss decreased 53.4% year-over-year to hit $13.20 million in its third fiscal quarter. The company announced record liquidity of $227 million as of November 2, 2021.
In its fourth fiscal quarter, ended December 31, 2021, analysts expect XELA’s EPS to improve 82.4% year-over-year.
Over the past month, shares of XELA have gained 13.1% in price. The 12-month price target of $5.00 indicates a 567.7% upside potential from yesterday’s closing price of $0.75.
Click here to view our Software Industry Report for 2022
PAYO shares were trading at $4.96 per share on Friday afternoon, down $0.30 (-5.70%). Year-to-date, PAYO is down -32.52%, compared to a -6.62% rise in the benchmark S&P 500 over the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using its fundamental approach to stock analysis, Mangeet seeks to help retail investors understand the underlying factors before making investment decisions. Following…