Software-as-a-service or SaaS stock prices are rising or at least remaining steady in a turbulent market. Few sectors of the economy have performed better over the past few years
COVID-19 Unsettles the U.S. Stock Market, so Which SaaS Stocks Are Performing Well?
SaaS Stock Index: Background
SaaS or Software-as-a-Service isn’t a new idea. Over the past few decades, it has become known as one of the most robust revenue models for tech companies to develop.
Tech and subsets of tech, such as SaaS and cloud companies, are shining during regular trading. Companies and individuals investing primarily in SaaS companies have made incredible returns during recent years. Making profits from SaaS stocks shouldn’t be too surprising given the digital age we live in.
After upfront costs and sales teams, software costs are next to nothing to service each customer, so profits remain high. High switching costs add to a dependable customer base, and upselling of products has become easy with little outlay.
It’s unlikely the trend will change anytime soon, and it’s not too late to jump on the bandwagon.
Adobe (ADBE)
An excellent long-term option and giant of the industry is Adobe, which offers creative and visual-oriented cloud solutions to creative amateurs, creative professionals, and businesses.
Adobe has been around for a long time, and their success story has been attributed to multiple shifts in the industry. New SaaS companies starting up today can learn a lot from Adobe’s voyage to success. They have made some smart financial decisions, added more streams of revenue, and funded research well.
Their three main significant growth areas earn them over $100 billion in revenue. They still have a long runway of growth ahead of them. They also have a very high operating margin, which is only getting better and better.
Overall, Adobe is a large company that has potential because it is backed by a global spending shift towards visual-first content and by a move to an experience-driven market. Adobe stock should trend higher in the long run.
It’s no wonder why Adobe shares have increased nearly 400% over the past five years and are expected to continue outperforming the broader market going forward.
Adobe (ADBE)
An excellent long-term option and giant of the industry is Adobe, which offers creative and visual-oriented cloud solutions to creative amateurs, creative professionals, and businesses.
Adobe has been around for a long time, and their success story has been attributed to multiple shifts in the industry. New SaaS companies starting up today can learn a lot from Adobe’s voyage to success. They have made some smart financial decisions, added more streams of revenue, and funded research well.
Their three main significant growth areas earn them over $100 billion in revenue. They still have a long runway of growth ahead of them. They also have a very high operating margin, which is only getting better and better.
Overall, Adobe is a large company that has potential because it is backed by a global spending shift towards visual-first content and by a move to an experience-driven market. Adobe stock should trend higher in the long run.
It’s no wonder why Adobe shares have increased nearly 400% over the past five years and are expected to continue outperforming the broader market going forward.
Salesforce (SF)
An excellent long-term option and giant of the industry is Adobe, which offers creative and visual-oriented cloud solutions to creative amateurs, creative professionals, and businesses.
Adobe has been around for a long time, and their success story has been attributed to multiple shifts in the industry. New SaaS companies starting up today can learn a lot from Adobe’s voyage to success. They have made some smart financial decisions, added more streams of revenue, and funded research well.
Their three main significant growth areas earn them over $100 billion in revenue. They still have a long runway of growth ahead of them. They also have a very high operating margin, which is only getting better and better.
Overall, Adobe is a large company that has potential because it is backed by a global spending shift towards visual-first content and by a move to an experience-driven market. Adobe stock should trend higher in the long run.
It’s no wonder why Adobe shares have increased nearly 400% over the past five years and are expected to continue outperforming the broader market going forward.
Dropbox (DBX)
DBX has already accumulated a large user base, estimated at over 500 million midway through 2019. Since then, the number of users paying for their services continues to grow, as does revenue per user.
The growth seen by DBX should see its stock reach higher valuation levels in the future. Besides, its large user base and the utility of its service make DBX a stock to be watched, especially with rumored acquisitions, from Microsoft and Salesforce.
With these factors and the current low stock price, it seems clear that DBX is a SaaS stock to buy now. Like most SaaS stocks, there are always two sides to the story.
There is already lots of competition in the DBX market space, but DBX is still growing well. The high demand for their services isn’t going away. In the current market and with a price still relatively low, the potential rewards seem worth taking a risk on.
Should I Invest in SaaS Stocks Right Now?
Increased corporate spending on cloud-based software and digital transformation all drive revenue for SaaS stocks. With the Coronavirus spreading, the global economy has slowed, and SaaS stocks are likely to be impacted. However, the advantage they have during these times is less exposure to supply chain disruptions.
SaaS stocks tend to perform in general during periods of stock market volatility. Another factor why SaaS stocks are good to trade is because the industry tends to have the most mergers and acquisitions. As a result, SaaS stocks trade at higher multiples and are big winners in the long run.
There’s a wide range of software companies to watch, so if you do intend to invest, do your research, and seek financial advice if necessary.
Have you already invested in SaaS stocks? If so, how are they performing? What are your thoughts and ideas on good stocks right now? Please feel free to comment below.
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