Pure-Play Cloud Computing SaaS Stocks Lagged Expectations In July: Down 3%

By Lorimer Wilson of munKNEE.com
Wednesday, July 31, 2024 5:52 PM EDT

human hand holding plasma ball

Image Source: Unsplash


An Introduction

Surprisingly, the sell-off in the munKNEE Pure-Play Cloud Computing SaaS Stocks Portfolio continued in July despite the fact, according to Fortune Business Insights, that the global cloud computing SaaS market is projected to have a CAGR of 18.4% between now and 2032.


What is Cloud Computing?

Cloud computing (CC) is the technique of processing, storing, and managing data on a network of remote computers hosted on the internet rather than on a personal computer or local server. It is used by individuals to store photos or documents, watch movies or listen to music on platforms like Netflix or Spotify and used by companies to store information.


What is SaaS?

SaaS, also known as cloud application services makes software available to users over the internet, usually for a monthly subscription fee. They are typically ready-to-use and are run from a users’ web browser which allow businesses to skip any additional downloads or application installations. SaaS accounts for 38.5% of cloud computing revenue. (Source) For more insightful information you are encouraged to read Cloud Computing 101.

A graphic comparing the similarities and differences between the software as a service model and the traditional model.

Image source: The Motley Fool


What is a Pure-Play Company?

As you would expect, a pure play company is defined as a company that concentrates all its efforts on a single line of business.


Price-to-Sales Ratio

The price-to-sales (P/S) ratio, which equals a company's market capitalization divided by its annual revenue, is often used as a valuation metric for SaaS companies in place of the P/E ratio. A higher P/S ratio denotes optimism among investors that attractive revenue growth will continue and that the revenue will eventually generate profits.


The munKNEE Pure-Play Cloud Computing SaaS Stocks Portfolio

Below is a list of pure-play CC companies presented in descending order of their performances in July (as of mid-day July 31st) and YTD, their market capitalizations, their unique business model descriptions, their current price-to-sales ratio (and rank) and their latest news, analyses and commentary where available.

  1. Dropbox (DBX): UP 8.3% in July; DOWN 18.1% YTD
  2. Twilio (TWLO): UP 4.8% in July; DOWN 21.6% YTD
    • Company Description: provides various application programming interfaces and software solutions for communications between customers and end users
    • Market Capitalization: $10B
    • Current Price-to-Sales Ratio: 2.2 (ranks #12)
    • Most Recent News, Analyses, and Commentary:
  3. Zoom Video (ZM): UP 4.6% in July; DOWN 13.9% YTD
    • Company Description: offers video, voice, chat, and content sharing through computers and also offers a cloud phone system
    • Market Capitalization: $19B
    • Current Price-to-Sales Ratio: 4.0 (Ranks #10)
    • Most Recent News, Analyses, and Commentary:
  4. ServiceNow (NOW): UP 3.5% in July; UP 15.1% YTD
  5. Atlassian (TEAM): DOWN 0.1% in July; DOWN 25.7% YTD
  6. Okta (OKTA): DOWN 0.1% in July; DOWN 25.7% YTD
    • Company Description: offers products and services to manage and secure customer identities and a suite of security capabilities that protects customers from different types of malicious traffic
    • Market Capitalization: $15B
    • Current Price-to-Sales Ratio: 5.8 (Ranks #9)
    • Most Recent News, Analyses, and Commentary:
  7. Workday (WDAY): DOWN 1.1% in July; DOWN 16.3% YTD
  8. MongoDB (MDB): DOWN 1.5% in July; DOWN 39.8% YTD
    • Company Description: provides general-purpose database platforms worldwide and offers professional services comprising consulting and training
    • Market Capitalization: $18B
    • Current Price-to-Sales Ratio: 9.4 (Ranks #5 - tied)
    • Most Recent News, Analyses, and Commentary:
  9. Snowflake (SNOW): DOWN 3.3% in July; DOWN 34.4% YTD
  10. Cloudflare (NET): DOWN 6.5% in July; DOWN 7.0% YTD
  11. Datadog (DDOG): DOWN 10.1% in July; DOWN 4.0% YTD
  12. HubSpot (HUBS): DOWN 15.3% in July; DOWN 14.0% YTD


Summary

The above 12 CC stocks were DOWN 3.3% in July and are DOWN 12.1% YTD and have an average market capitalization of $40B.

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Disclosure: None

This article has been composed with the exclusive application of the human intelligence (HI) of the author. No artificial intelligence (AI) technology has been deployed. ...

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