3 Innovative Companies Growing in the SaaS Industry
As markets crash investors should be using the opportunity to invest on the dip. One industry that I adore is Saas. Known as software as a service, Saas is a cloud based service that allows users to connect their cloud based apps through the internet. As seen in the graph below, Saas is growing at an exponential rate of close to 18% YoY. Whether it be user acquisition, business implementation, etc. Saas companies have been reaping the benefit of system integrations.
This leads me to evaluate a few companies that I think could be disruptors and capture a portion of the ever growing market that is Saas. Therefore, I chose two companies that are publicly traded and another that is preparing for a listing this quarter.
Monday.com (NASDQ:MNDY): Operating in the United States, Europe, Middle East, Africa, and internationally, monday.com is a cloud-based platform that allows users to create their own applications and work management software. After reviewing some of their key metrics I believe monday.com will recover well from the current recession. Seeing a 135% increase in NRR (net revenue retention) for a hyper growth company is extremely important. In addition, considering YoY revenue growth and producing its first positive FCF, monday.com has become a stable and financially sound company worth investing in.
Intuit (NASDAQ:INTU): Intuit Inc. is a business and financial software company that develops and sells financial, accounting, and tax preparation software and related services for small businesses, accountants, and individuals. The company is headquartered in Mountain View, California. In recent news Intuit settled a $141 million USD lawsuit This allowed the stock to drop significantly and trade at a discount. Furthermore, Intuit has a strong business model that could eventually outperform even the largest of accounting firms. As their AI technology adapts from small business to larger ones, Intuit could see hyper growth in overall revenue. Lastly, Intuit grew revenue by close to 40% from 2021 to 2022, and with aggressive acquisitions of companies like Mint and Turbotax which have provided strong profits and a diversified portfolio, Intuit should be on any investors watchlist.
Orcanos (soon TSXV): Orcanos is a cloud-based platform designed to help businesses of all sizes manage and automate all document workflows. Orcanos has developed a unique SaaS product that unites R&D, quality assurance, and regulatory compliance under a single and customizable solution. Orcanos’ platform has allowed for leading enterprises such as GE Healthcare and Mazor Robotics, to alleviate the difficult process of product development and therefore increase overall production. As the graph below indicates there is a growing market that Orcanos could very well penetrate as it begins preparing for its inevitable listing on TSX.
In conclusion, these three stocks have obstacles to overcome and are in no way shape or form guarantees to exceed expectations. However, I do think that due to market conditions and current trends within the industry they can all produce abnormal returns for investors interested in buying the dip.