- Despite Snap’s disappointing second-quarter earnings, the company’s long-term prospects remain bright.
- With a $13 billion potential in front of it, Veeva has plenty of space to expand.
- Zoom might profit from 836 million individuals working remotely by 2026, particularly if it continues to grow its platform’s reach.
2022 has been unstable for investors, with indexes like the S&P 500 and the tech-heavy Nasdaq 100 falling into the bear market territory. On the other hand, Nasdaq 100 has risen 18% in the previous two months alone after rebounding from its lows.
However, despite recent gains in the overall market, many individual technology equities remain negative.
Nevertheless, you may purchase these stocks today, even if they’re down between 32 and 87 percent from their all-time highs.
Zoom’s video conferencing service
Videoconferencing platform Zoom Meetings was crucial in aiding socially dispersed workers, students, friends, and relatives throughout the epidemic. With G2 Grid stating that Zoom Meetings is now the most popular videoconferencing tool available, the Zoom moniker is now well-known all across the globe.
The corporation is using this advantage to promote the use of other goods. An excellent example is Zoom Phone, a cloud-based phone system that streamlines remote work while removing the burden of on-site phone gear. Zoom Phone sold 3 million tickets in the first quarter of fiscal 2023, up from 2 million seats sold in September 2021.
So why has the stock fallen 72%? For many investors, the greatest days of Zoom seem to be behind it as revenue growth has slowed considerably in recent periods. However, it seems to be a short-term view. Even as the firm grows, Zoom is disrupting a huge industry.
Since last year, the number of corporate clients jumped 26% to 198,900; the typical customer spent 23% more. A successful land and expand approach may be shown in this example. As a result, sales increased by 29% to $4.2 billion, while profits per diluted share increased by 42% to $4.12.
With 832 million knowledge workers working remotely at least part-time by 2026, up 70 percent from 2021, the bull case for Zoom is clear. This tendency is expected to increase demand for tools like Zoom Meetings, Zoom Phone, and Zoom Contact Center, which account for the bulk of the $91 billion addressable market by 2025. On the other hand, shares are now selling at only 8.1 times revenue, compared to the historical average of 40.8 times sales, making this beaten-down growth company a superb purchase right now.
SNAP, INC.
A 40-year high in U.S. inflation has prompted the Federal Reserve to launch one of its most aggressive interest rate-hiking campaigns. Increasing prices are hurting the bottom line of firms like Snap, the parent company of social media platform Snapchat, which depend on advertising as a source of income because of the rising cost of goods and services.
Businesses cut down on their marketing budgets when customers are weak since the returns may be less. In the same way, if a company loses money because of rising expenditures, it will cut down on its marketing budget. Snap’s revenue increased by just 13% year over year to $1.1 billion in the second quarter of 2022. Yet, compared to the same period in 2021, income increased by a remarkable 116%. It’s a stark reminder of the decline in corporate confidence.
It’s not all bad for Snap, however: It has a few advantages. Daily active users reached 347 million in Q2, an increase of 18% over the year before. In addition, a large percentage (60 percent) of its members are between 13 and 24 years old, making it a highly sought-after social media platform for marketers to employ.
At 87% of its all-time high, Snap’s stock is now under pressure from the larger economy and is expected to be unchanged for the foreseeable future. In addition, apple’s recent privacy improvements have harmed digital marketing, but the company is putting a lot of resources into improving the experience for marketers. For example, as it expands its augmented reality capabilities, it can significantly increase the number of conversions for its advertisers.
Due to slowing revenue growth and more investment in platform improvements, Snap lost $781 million in the first half of 2022. Despite this, the company has a robust financial sheet, with more than $4.8B in cash., cash equivalents, and marketable securities.
Veeva Systems
Because Veeva Systems isn’t a high-flying tech company, it’s generally disregarded, but now that it’s 32 percent off its all-time highs, it may be worth a closer look. Pharmaceutical companies rely on this company’s software for every stage of their operations, from clinical testing and regulatory compliance to medication marketing and sales.
Despite rising prices and the possibility of a recession, Veeva is expected to do well in the following quarters. Data collecting, storage, and other back-end activities are all made easier using the company’s solutions. Veeva’s clients are unlikely to switch to manual operations in a recession. Because of rising inflation and economic fears, the business just negotiated one of its most significant transactions with one of the top 20 pharmaceutical customers.
Veeva’s sales increased by just 16 percent year over year to $505 million in its first fiscal quarter, which concluded on April 30. However, profitability makes up for the lack of expansion in this company. Veeva has achieved a free cash flow of $767 million and a net income of $412 million in the preceding 12 months. Even if a recession hits Veeva, the firm is sufficiently lucrative that it can continue to invest in the adoption of its product. Still, competitors may have to reduce their investment expenditure due to the crisis.
Veeva is a one-of-a-kind firm since it provides a broad range of products. An opportunity that management estimates to be worth $13 billion is in the company’s best interest as a result of this. This company’s stock has fallen by more than a third in the last year, making it a no-brainer purchase that is expected to expand significantly over the long term.
