As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the vertical software industry, including nCino (NASDAQ: NCNO) and its peers.
Software is eating the world, and while a large number of solutions such as project management or video conferencing software can be useful to a wide array of industries, some have very specific needs. As a result, vertical software, which addresses industry-specific workflows, is growing and fueled by the pressures to improve productivity, whether it be for a life sciences, education, or banking company.
The 14 vertical software stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 3.3% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 17.7% since the latest earnings results.
nCino (NASDAQ: NCNO)
Founded in 2011 in North Carolina, nCino (NASDAQ: NCNO) makes cloud-based operating systems for banks and provides that software-as-a-service.
nCino reported revenues of $141.4 million, up 14.3% year on year. This print was in line with analysts’ expectations, but overall, it was a weaker quarter for the company with full-year guidance of slowing revenue growth.
"We ended the year strong, with meaningful year-over-year subscription revenues and ACV growth, while continuing to realize efficiencies across our operations," said Sean Desmond, Chief Executive Officer at nCino.
nCino delivered the weakest full-year guidance update of the whole group. The stock is down 16.3% since reporting and currently trades at $23.55.
Read our full report on nCino here, it’s free.
Best Q4: Upstart (NASDAQ: UPST)
Founded by the former head of Google's enterprise business, Upstart (NASDAQ: UPST) is an AI-powered lending platform facilitating loans for banks and consumers.
Upstart reported revenues of $219 million, up 56.1% year on year, outperforming analysts’ expectations by 20.1%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.
Upstart scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 40.4% since reporting. It currently trades at $40.15.
Is now the time to buy Upstart? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: PTC (NASDAQ: PTC)
Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC’s (NASDAQ: PTC) software-as-service platform helps engineers and designers create and test products before manufacturing.
PTC reported revenues of $565.1 million, up 2.7% year on year, exceeding analysts’ expectations by 1.9%. Still, it was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.
As expected, the stock is down 22.5% since the results and currently trades at $146.93.
Read our full analysis of PTC’s results here.
Veeva Systems (NYSE: VEEV)
Built on top of Salesforce as one of the first vertical-focused cloud platforms, Veeva (NYSE: VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry.
Veeva Systems reported revenues of $720.9 million, up 14.3% year on year. This result surpassed analysts’ expectations by 3.1%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 2.2% since reporting and currently trades at $224.75.
Read our full, actionable report on Veeva Systems here, it’s free.
Doximity (NYSE: DOCS)
Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.
Doximity reported revenues of $168.6 million, up 24.6% year on year. This number beat analysts’ expectations by 9.6%. It was a very strong quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations.
The stock is down 9.7% since reporting and currently trades at $52.74.
Read our full, actionable report on Doximity here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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