The days of buying traditional software at a local store or even having it delivered and subsequently installed on company computers are giving way toward the software as a service model, commonly referred to with the acronym of SaaS.  In fact, it is possible SaaS will completely replace traditional software at some point in the future.

Part of the beauty of SaaS is it can be temporarily leased until another version or a superior competing software package hits the market.  Furthermore, it is that much easier for business personnel to add software to their personal computers for use at home and on the road with the comparably efficient SaaS model.

Salesforce, CrowdStrike and Everbridge are three companies poised to rake in the cash as a result of the seemingly unstoppable SaaS trend.

Salesforce (CRM)

Cloud computing, customer information management and seamless software transitions are the name of the game in 2020.  CRM provides all three of these services.  As the industry’s top provider of customer relationship management (CRM) software, CRM makes it easy to automate sales forces, provide effecient customer support and streamline marketing.

CRM is helping companies conduct business as best as possible in the midst of the coronavirus pandemic.  The bottom line is there will always be a need to understand customers and market services through automated means.  As a result, CRM will likely be in business for decades or possibly even centuries into the future.

The analysts have set a price target of $195.32 for CRM.  The POWR Ratings have CRM ranked #6 of 47 stocks in the Software – Business category.  CRM has an A Trade Grade and Bs in the remaining categories.

Businesses were trending toward conducting operations digitally even before the virus outbreak.  CRM’s SaaS will undoubtedly continue to sell in the years ahead as this digital transition is fully fleshed out.  Furthermore, CRM’s integration of artificial intelligence into services makes its offerings that much more attractive.

Look for CRM to exceed its 29% revenue growth from last year, setting an even higher benchmark in 2020.

Everbridge (EVBG)

Wouldn’t it be nice to own a piece of a business that heroically steps in to help businesses as well as governmental entities proactively manage network outages?  EVBG does just that.  In fact, the company’s SaaS solutions even help amidst harsh weather, active shooting incidents and terrorist attacks.

Of the dozen analyst ratings provided through TipRanks, 11 recommend buying EVBG while only one recommends holding the stock. EVBG is only $13 away from its 52-week high of $165.  The coronavirus boosted EVBG revenue by 38% in the most recent quarter.  Revenue will inevitably jump even higher in the quarters to come as the full impact of the pandemic is felt.

EVBG has the potential to achieve an adjusted profit in one of the final two quarters of the year, marking quite the turnaround from its time in the red.  Most importantly, EVBG aces the POWR Ratings analysis with As in all categories but for industry rank. The POWR Ratings have EVBG ranked second of 10 stocks in the Software – SAAS category.

Look for EVBG to move toward and possibly beyond its 52-week high thanks to the strength of its pandemic-related SaaS services.

CrowdStrike (CRWD)

Cybersecurity has become that much more important as operations have shifted away from brick-and-mortar offices to houses and apartments across the land.  CRWD provides cybersecurity SaaS security platforms for businesses of all types and sizes.

The company is set to ramp up its growth that much more thanks to the coronavirus pandemic.  After all, the last thing businesses will cut back on is cybersecurity amidst the transition to working from home.

CRWD is a quickly growing SaaS juggernaut.  The company’s revenue soared more than 90% in fiscal ’20.  Revenue spiked 89% in the latest quarter.  Furthermore, subscription revenue which isCRWD’s primary money-maker, also increased 90% in the most recent quarter.  The company’s 5,400 subscription customers at January’s end has since doubled.

Fast forward to the 2022 fiscal year and CRWD adjusted earnings should finally be in the black.  CRWD has a B trade grade in the POWR Ratings along with a “Strong Buy” rating from Zacks.  Buy this budding SaaS superstar, hold it for years and you will likely be ecstatic with your gains.

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CRM shares fell $0.10 (-0.06%) in after-hours trading Tuesday. Year-to-date, CRM has gained 8.24%, versus a -8.75% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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