Q4 Rundown: Alarm.com (NASDAQ:ALRM) Vs Other Vertical Software Stocks

As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at vertical software stocks, starting with Alarm.com (NASDAQ:ALRM).

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 4 vertical software stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 1.4%, while next quarter's revenue guidance was 1.6% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the vertical software stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.8% on average since the previous earnings results.

Alarm.com (NASDAQ:ALRM)

Founded in 2000 as a business unit within MicroStrategy, Alarm.com (NASDAQ:ALRM) is a software-as-a-service platform that enables users to control their security systems and smart home appliances from a single app.

Alarm.com reported revenues of $226.2 million, up 8.7% year on year, in line with analyst expectations. It was a decent quarter for the company, with management forecasting robust growth.

“We are pleased to report solid results for the quarter and the year,” said Steve Trundle, CEO of Alarm.com.

The stock is down 6.2% since the results and currently trades at $65.52.

Is now the time to buy Alarm.com? Access our full analysis of the earnings results here, it's free.

Best Q4: Manhattan Associates (NASDAQ:MANH)

Boasting major consumer staples and pharmaceutical companies as clients, Manhattan Associates (NASDAQ:MANH) offers a software-as-service platform that helps customers manage their supply chains.

Manhattan Associates reported revenues of $238.3 million, up 20.3% year on year, outperforming analyst expectations by 6.4%. It was a strong quarter for the company, with a solid beat of analysts' revenue estimates and a significant improvement in its gross margin.

Manhattan Associates pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 3% since the results and currently trades at $230.51.

Is now the time to buy Manhattan Associates? Access our full analysis of the earnings results here, it's free.

Weakest Q4: Guidewire (NYSE:GWRE)

Founded by two individuals involved in the development of leading procurement software Ariba, Guidewire (NYSE:GWRE) offers insurance companies a software-as-a-service platform to help sell their products and manage their workflows.

Guidewire reported revenues of $240.9 million, up 3.6% year on year, falling short of analyst expectations by 0.4%. It was a slower quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.

Guidewire had the slowest revenue growth and weakest full-year guidance update in the group. The stock is down 7.7% since the results and currently trades at $107.9.

Read our full analysis of Guidewire's results here.

Bentley (NASDAQ:BSY)

Founded by brothers Keith and Barry Bentley, Bentley Systems (NASDAQ:BSY) offers a software-as-a-service platform that addresses the lifecycle of infrastructure projects such as road networks, tunnel systems, and wastewater facilities.

Bentley reported revenues of $310.6 million, up 8.3% year on year, falling short of analyst expectations by 0.9%. It was a weak quarter for the company, with a miss of analysts' revenue estimates and full-year revenue guidance missing analysts' expectations.

Bentley had the weakest performance against analyst estimates among its peers. The stock is down 0.4% since the results and currently trades at $52.28.

Read our full, actionable report on Bentley here, it's free.

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