Amid the trend of hybrid work, companies are increasingly adopting software solutions to enable employees to accomplish more in less time. Gartner predicts global IT spending to exceed $ 4 trillion next year. Additionally, trends in cybersecurity, customer loyalty, and low-code development are expected to propel the industry’s growth.
In addition, the adoption of cloud platforms is expected to accelerate because the world is more dependent on remote activities in part because of the spread of the COVID-19 omicron variant. In addition, investor optimism regarding the software industry is evident in the iShares Expanded Tech-Software Sector ETFs (IGV) 11% returns over the past year.
In this context, we think that it might be interesting to add the software shares Yalla Group Limited (YALA) and Zedge, Inc. (ZDGE) to his watch list. They are currently trading below $ 10 and could generate a significant upside in the short term.
Click here to view our Software Industry Report
Yalla Group Limited (YALA)
Based in Dubai, United Arab Emirates, YALA is a social networking and entertainment platform in the Middle East and North Africa region. The company offers group chat and game services through its Yalla and Yalla Ludo products. YALA operates through Ayla UAE, Hangzhou Yale and Shenzhen Moov.
YALA revenue increased 110.8% year-on-year to $ 71.31 million for the third quarter ended September 30, 2021. operating result was $ 25.74 million, compared with an operating loss of $ 30.91 million in the third quarter of 2020. Its net profit was $ 25.33 million, compared with a net loss of $ 30.98 million in the previous year quarter.
Analysts expect YALA’s revenue for its 2022 fiscal year to be $ 347.91 million, up 28 percent year-over-year. The company has an impressive history of profit surprises; it has beaten consensus EPS in three of the past four quarters. In addition, its EPS is expected to grow 22.8% in the current year. YALA closed the last trading session at $ 6.09.
YALA’s strong fundamentals are reflected in its POWR odds. The stock has an overall rating of B, which is equivalent to a purchase in our proprietary rating system. POWR ratings evaluate stocks based on 118 distinct factors, each with its own weight.
Additionally, the stock has an A rating for quality and a B rating for growth and value. We also rated YALA for the feeling, stability and momentum. Click here to access all of YALA’s assessments. YALA is ranked 13th out of 169 stocks in the Software application industry.
Zedge, Inc. (ZDGE)
Incorporated in 2008, ZDGE in New York is a digital publishing platform that offers Zedge, a mobile personalization app for consumers. The company also offers a wide range of custom wallpapers, video wallpapers, ringtones, sound notifications on Android, wallpapers and ringtones on iOS.
This month, ZDGE began offering its creators, which range from celebrities to artists, the ability to create and sell NFTs on the Zedge Premium Marketplace. The launch of NFTs should provide artists with the “NFTs Made Easy” utility, allowing them to compete without extensive experience with cryptocurrencies.
ZDGE’s total revenue increased 57.9% year-on-year to $ 6 million for its fiscal first quarter ended October 31, 2021. The company’s operating profit increased 136.4% compared to its value a year ago to reach $ 2.6 million. Its net profit increased 110% from the previous year quarter to $ 2.1 million. In addition, the company’s EBITDA increased 114.3% year-over-year to $ 3 million.
Analysts expect ZDGE’s revenue for its 2022 fiscal year to be $ 24.75 million, up 26.5 percent year-over-year. The company has an impressive history of profit surprises; it has beaten consensus EPS in three of the past four quarters. The company’s EPS is expected to rise 16.9% next year. Closing yesterday’s trading session at $ 9.36, ZDGE’s stock has jumped 65.4% in the past year.
It’s no surprise that ZDGE has an overall rating of B, which equates to a purchase in our POWR rating system. Additionally, the stock has an A rating for quality and a B rating for value and sentiment.
Click here to view additional POWR ratings for ZDGE (Momentum, Stability & Growth). ZDGE is ranked # 28 in the Software application industry.
Click here to view our Software Industry Report
YALA shares were trading at $ 5.94 per share on Tuesday morning, down $ 0.15 (-2.46%). Year-to-date, YALA is down -58.55%, compared to a 29.51% increase in the benchmark S&P 500 over the same period.
About the Author: Priyanka Mandal
Priyanka is an avid investment analyst and financial journalist. After get a master’s degree in economics, her interest in financial markets motivated her to start her career in investment research. Following…