The markets completed the first half of 2021 with multi-decade gains. The tech-heavy Nasdaq Composite gained 12.5% in the first half of the year. Moreover, Nasdaq hit its all-time high of 14,649.11 in the last trading session, driven by an impressive June job growth report. Following the release of the job market data, benchmark treasury yields declined slightly on July 2.
The bullish stock market indicates favorable investor sentiment despite several macroeconomic headwinds. Besides the robust tech integration, hefty government investments and the Fed’s commitment of not raising the interest rates preemptively should boost the tech stocks further in upcoming months.
An accommodative monetary policy and surging investor sentiment have driven the performance of popular tech stocks McAfee Corp. (MCFE), Commvault Systems, Inc. (CVLT), Agilysys, Inc. (AGYS), and Thryv Holdings, Inc. (THRY). These stocks have delivered double-digit price gains in the first half of 2021. This trend is likely to continue as the economy reaches its pre-pandemic levels.
McAfee Corp. (MCFE)
MCFE is a cybersecurity company providing various integrated security, privacy, and trust solutions to consumers, small and medium-sized businesses, large enterprises, and governments worldwide. The company operates in two segments — Consumer and Enterprise. MCFE was named the 2021 Gartner Peer Insights Customers’ Choice for Secure Web Gateways (SWGs) for the third consecutive year.
On July 1, MCFE announced that it has received a success memorandum from the Defense Innovation Unit (DIU) for its MVISION Unified Cloud Edge (UCE) solution. This demonstrates MCFE’s dominance in the cybersecurity space.
On May 18, MCFE unveiled a significant expansion of its MVISION Extended Detection and Response (XDR) solution, which is effective against the most advanced threats. This upgrade should be widely demanded amid rising sophisticated cybercrime.
MCFE’s net revenue increased 24.9% year-over-year to $442 million in the fiscal first quarter that ended March 27. Its operating income grew 69.4% from the year-ago value to $105 million, while its net income improved 944.4% year-over-year to $94 million. MCFE’s combined Unlevered Free Cash Flow stood at $298 million, up 35% year-over-year.
Analysts expect MCFE’s revenues to increase 11.3% year-over-year to $1.99 billion in 2022. The consensus EPS estimate of $1.08 for the next year indicates a 35% rise from the current year.
MCFE gained 68.5% over the past six months to close yesterday’s trading session at $28.12. The stock has gained 8.5% over the past month.
It is no surprise that MCFE has an overall grade of B, which equates to a Buy rating in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
The stock also has a B grade for Growth, Value, and Quality. Among the 24 stocks in the Software-Security industry, MCFE is ranked #4. To see additional grades for MCFE such Sentiment, Stability, and Momentum, click here.
Click here to check out our Cybersecurity Industry Report for 2021
Commvault Systems, Inc. (CVLT)
CVLT is a global leader in data protection and information management software applications and related services. The company works across cloud and on-premises environments, leveraging the digital tools and procedures already in use. CVLT enables its customers to intelligently manage data with solutions that store, protect, optimize, and use data.
On June 16, CVLT introduced its new Metallic Cloud offerings for the U.S. government. The company also announced the achievement of “High Ready” status for its solutions from the Federal Risk and Authorization Management Program (FedRAMP).
On May 25, CVLT announced the expansion of its Metallic software-as-a-service (SaaS) portfolio and a new unified Intelligent Data Services Platform to meet the growing demand for intelligently managed data services platform.
CVLT’s reported record revenue of $191.34 million, an increase of 16.1% year-over-year in the fiscal fourth quarter that ended March 31. Income from operations stood at $10.34 million, up 572.9% from the same period last year. Its cash and cash equivalents balance rose 34.2% from the prior year quarter to $397.24 million this period.
The consensus revenue estimate of $766.96 million for the current year indicates a 6% increase from the prior year. The Street expects the company’s EPS to rise 19% from the previous year to $2.51 in the ongoing year. CVLT has an impressive earnings surprise history as well, as it beat the consensus EPS estimates in each of trailing four quarters. Shares of CVLT have gained 39.5% over the past six months, and 39.5% year-to-date.
CVLT has an overall grade of A, which equates to a Strong Buy rating in our proprietary POWR Ratings system. CVLT has a grade of A for Growth and Quality, and a grade B for Value and Sentiment. Of the 131 stocks in the Software – Application industry, it is ranked #1. Click here to view additional grades for CVLT such as Momentum and Stability.
Click here to check out our Software Industry Report for 2021
Agilysys, Inc. (AGYS)
AGYS is a technology company operating as a developer and marketer of hardware and software products and services to the hospitality industry. The company serves four market sectors: gaming, both corporate and tribal; hotels, resorts and cruise; foodservice management, and restaurants, universities, stadia, and healthcare.
On March 23, AGYS announced the availability of its new cloud-native, hospitality marketing solution, Agilysys Digital Marketing. This is a prominent addition to the company’s solution set and is expected to boost its revenues significantly.
On March 9, AGYS partnered with CITCON, a leading mobile wallet payment provider to offer its customers enhanced payment options and strengthen market presence for both companies.
AGYS’ gross profit increased 19.4% year-over-year to $23.48 million in the fiscal fourth quarter that ended March 31. Adjusted EBITDA came in at $7.07 million, indicating a 97.8% improvement year-over-year. The company’s adjusted EPS increased 320% year-over-year to $0.21.
The consensus revenue estimate of $163.55 million for the current fiscal year indicates a 19.2% improvement from last year. Also, the company’s revenue is expected to rise 15.9% in the next fiscal year. Analysts expect the company’s EPS to come in at $0.92 next year, indicating a 31.4% rise from its year-ago value. Moreover, AGYS surpassed Street EPS estimates in each of the trailing four quarters, which is impressive.
AGYS has gained 219.2% over the past year. The stock gained 49.1% over the past six months to close yesterday’s trading session at $57.23.
AGYS has an overall grade of B, which equates to Buy rating in our proprietary POWR Ratings system. AGYS has a grade of A for Quality, and B for Growth and Momentum. It is ranked #4 among the 59 stocks in the Software – Business industry.
Beyond what we’ve stated above, we also provide grades for AGYS for Value, Sentiment, and Stability. Click here to view all of AGYS ratings.
Thryv Holdings, Inc. (THRY)
THRY is engaged in providing digital marketing solutions and cloud-based tools to small-to-medium sized businesses (SMBs). The company operates through three segments: SaaS (Software-as-a-Service), Marketing Services, and Thryv International. The company is part of Russell 2000® Index and the broad-market Russell 3000® Index, as of June 28.
On April 7, THRY launched its fully-integrated vertical platform to provide enhanced solutions to small businesses utilizing THRY’s software. This is expected to strengthen its position in the industry, with more businesses opting for its pre-configured solutions.
THRY’s operating income grew 4.8% from the year-ago value to $64.63 million. THRY’s net income came in at $36.51 million, indicating a 29.9% rise year-over-year. The company’s EPS increased 33.8% year-over-year to $1.07. Cash and cash equivalents balance rose 2,380.5% from the prior year quarter to $29.84 million over this period. Shares of THRY have gained 146.2% over the past six months, and 466.8% over the past year.
It’s no surprise that THRY has an overall grade of B, which equates to a Buy rating in our POWR Ratings system. THRY has a grade of A for Sentiment, and a B for Growth and Value. It is ranked #9 in the Software – Business industry. To see more of THRY’s component grades, click here.
MCFE shares were trading at $28.27 per share on Tuesday morning, up $0.15 (+0.53%). Year-to-date, MCFE has gained 70.95%, versus a 16.42% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More…
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