The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how sales and marketing software stocks fared in Q3, starting with Semrush (NYSE: SEMR).
The Internet and the exploding amount of data have transformed how businesses interact with, market to, and transact with their customers. Personalization of offerings, e-commerce, targeted advertising and data-empowered sales teams are now table stakes for modern businesses, and sales and marketing software providers are becoming the tools of evolving customer interaction.
The 22 sales and marketing software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.6% above.
Luckily, sales and marketing software stocks have performed well with share prices up 18.2% on average since the latest earnings results.
Semrush (NYSE: SEMR)
Started by Oleg Shchegolev while still in university, Semrush (NYSE: SEMR) is a software as a service platform that helps companies optimize their search engine and content marketing efforts.
Semrush reported revenues of $97.41 million, up 23.7% year on year. This print exceeded analysts’ expectations by 0.7%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ EBITDA estimates but decelerating customer growth.
Unsurprisingly, the stock is down 1.3% since reporting and currently trades at $14.17.
Is now the time to buy Semrush? Access our full analysis of the earnings results here, it’s free.
Best Q3: Zeta (NYSE: ZETA)
Co-founded by former Apple CEO John Scully, Zeta Global (NYSE: ZETA) provides software and data analytics tools that help companies market their products to billions of customers.
Zeta reported revenues of $268.3 million, up 42% year on year, outperforming analysts’ expectations by 6.3%. The business had a stunning quarter with an impressive beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.
Zeta pulled off the fastest revenue growth and highest full-year guidance raise among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 41.4% since reporting. It currently trades at $21.53.
Is now the time to buy Zeta? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Sprinklr (NYSE: CXM)
Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software.
Sprinklr reported revenues of $200.7 million, up 7.7% year on year, exceeding analysts’ expectations by 2.2%. Still, it was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations.
Interestingly, the stock is up 8.5% since the results and currently trades at $9.36.
Read our full analysis of Sprinklr’s results here.
Shopify (NYSE: SHOP)
Originally created as an internal tool for a snowboarding company, Shopify (NYSE: SHOP) provides a software platform for building and operating e-commerce businesses.
Shopify reported revenues of $2.16 billion, up 26.1% year on year. This result surpassed analysts’ expectations by 2.2%. It was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and revenue guidance for next quarter beating analysts’ expectations.
The stock is up 30.7% since reporting and currently trades at $117.67.
Read our full, actionable report on Shopify here, it’s free.
GoDaddy (NYSE: GDDY)
Founded by Bob Parsons after selling his first company to Intuit, GoDaddy (NYSE: GDDY) provides small and mid-sized businesses with the ability to buy a web domain and tools to create and manage a website.
GoDaddy reported revenues of $1.15 billion, up 7.3% year on year. This result met analysts’ expectations. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ bookings estimates.
The stock is up 29.1% since reporting and currently trades at $208.72.
Read our full, actionable report on GoDaddy 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 Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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