Vertical Software Stocks Q4 Teardown: Upstart (NASDAQ:UPST) Vs The Rest
Earnings results often indicate what direction a company will take in the months ahead. With Q4 now behind us, let’s have a look at Upstart (NASDAQ:UPST) 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 17 vertical software stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 1.6%. while next quarter's revenue guidance was 4.5% below consensus. Investors abandoned cash-burning companies to buy stocks with higher margins of safety, but vertical software stocks held their ground better than others, with share prices down 4.2% on average since the previous earnings results.
Upstart (NASDAQ:UPST)
Founded by the former head of Google's enterprise business Dave Girouard, Upstart (NASDAQ:UPST) is an AI-powered lending platform that helps banks better evaluate the risk of lending money to a person and provide loans to more customers.
Upstart reported revenues of $140.3 million, down 4.5% year on year, topping analyst expectations by 3.7%. It was a mixed quarter for the company, with revenue coming in ahead of expectations. On the other hand, its revenue guidance for next quarter missed analysts' expectations and the company burned through significant amount of cash.
Upstart delivered the slowest revenue growth of the whole group. The stock is down 23.9% since the results and currently trades at $25.06.
Read our full report on Upstart here, it's free.
Best Q4: Olo (NYSE:OLO)
Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.
Olo reported revenues of $63 million, up 26.6% year on year, outperforming analyst expectations by 7%. It was an exceptional quarter for the company, with and an impressive beat of analysts' billings estimates.
Olo achieved the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 9.9% since the results and currently trades at $5.21.
Is now the time to buy Olo? Access our full analysis of the earnings results here, it's free.
Weakest Q4: 2U (NASDAQ:TWOU)
Originally named 2tor after the founder's dog Tor, 2U (NASDAQ:TWOU) provides software for universities and colleges to deliver online degree programs and courses.
2U reported revenues of $255.7 million, up 8.3% year on year, falling short of analyst expectations by 9.2%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations.
2U had the weakest performance against analyst estimates in the group. The stock is down 60.8% since the results and currently trades at $0.36.
Read our full analysis of 2U's results here.
Matterport (NASDAQ:MTTR)
Founded in 2011 before any mass-market VR headset was released, Matterport (NASDAQ:MTTR) provides the hardware and software necessary to turn real-world spaces into 3D visualization.
Matterport reported revenues of $39.55 million, down 3.9% year on year, falling short of analyst expectations by 1.1%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
The company added 51,000 customers to reach a total of 938,000. The stock is down 17.7% since the results and currently trades at $2.09.
Read our full, actionable report on Matterport here, it's free.
Q2 Holdings (NYSE:QTWO)
Founded in 2004 by Hank Seale, Q2 (NYSE:QTWO) offers software-as-a-service that enables small banks to provide online banking and consumer lending services to their clients.
Q2 Holdings reported revenues of $162.1 million, up 10.6% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' billings estimates.
The stock is up 27.7% since the results and currently trades at $53.43.
Read our full, actionable report on Q2 Holdings here, it's free.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
