December 3, 2020

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5 Growth-Focused Cloud Stocks to Buy Amid Coronavirus Crisis

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The cloud computing space is benefiting from the changing consumer preference amid the coronavirus crisis....

The cloud computing space is benefiting from the changing consumer preference amid the coronavirus crisis. Cloud-based solution-providing companies are making the most of the battle against the pandemic, wherein mass gatherings are strictly restricted and people are being increasingly asked to work from home.

The shelter-in-place orders have fueled the demand for remote project collaborations, video conferencing, online classes, data storage, gaming, and e-commerce shopping. Such services are easily available with the help of cloud computing technology.

Moreover, big data has become one of the biggest assets for the healthcare industry. Storing and managing an enormous amount of data are of utmost importance, and cloud computing firms are emerging as key players in this regard.

Additionally, growing usage of cloud-based services is aggravating security lapses, inducing risks of hacking and phishing mails in the garb of coronavirus as the subject content. Also, usage of own devices and equipment that are not properly configured or can be infected with malware during teleworking or accessing information to and fro from cloud raises possibilities of security breaches for enterprises. This is driving demand for cloud-based security service solutions.

With demand for cloud-based solutions growing, enterprises are turning to software companies for providing the digital infrastructure they need to keep up with the online world.

Considering the healthy growth prospects of cloud-focused tech companies, it makes sense to invest in this space for long-term gains.

Strategy to Pick Stocks

It is difficult to pick the right stocks from a wide range of available investment opportunities.

This is where the Zacks Stock Screener comes in handy. With the help of this screener, we have filtered five stocks that are incredible for investment right now. These stocks carry a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Also, the stocks have a Growth Score of A or B. Per Zacks’ proprietary methodology, stocks with such favorable combinations offer solid investment opportunities.

Our Picks

Zoom Communications ZM continues to add record number of subscribers and expand its enterprise customer base amid the COVID-19-induced remote-working and online-learning wave. Easy to deploy, use, manage and scalability make Zoom Video’s software popular. Moreover, the company’s efforts to eliminate the security and privacy loopholes are expected to help it maintain the existing enterprise user base and attract more customers.

Zoom Communications currently sports a Zacks Rank of 1 and has a Growth Score of A. The Zacks Consensus Estimate for fiscal 2021 earnings has been revised upward by 6.3% in the past 30 days to $1.19 per share. The consensus mark suggests a year-over-year surge of 240%.
 

Zoom Video Communications, Inc. Price and Consensus

Zoom Video Communications, Inc. Price and Consensus

Zoom Video Communications, Inc. price-consensus-chart | Zoom Video Communications, Inc. Quote

Anaplan PLAN is well poised to gain from the robust uptick in demand for its cloud-based Connected Planning platform, which enables clients to improve decision-making across finance to supply chains on a real-time basis.

The pandemic-induced macroeconomic weakness has increased the need for companies to optimize their spending patterns, in a bid to survive during these uncertain times. Moreover, rapid digital transformations across all industries are further propelling the need for efficient planning and data-driven decision-making solutions. These factors favor prospects of Anaplan that currently flaunts a Zacks Rank of 1.

San Francisco, CA-based Anaplan has a Growth Score of B. The Zacks Consensus Estimate for the fiscal 2021 bottom line is pegged at a loss of 44 cents per share, having narrowed from a loss of 45 cents per share in the past 60 days. The company had reported a loss per share of 44 cents in fiscal 2020 too.  
 

Anaplan, Inc. Price and Consensus

Anaplan, Inc. Price and Consensus

Anaplan, Inc. price-consensus-chart | Anaplan, Inc. Quote

Zscaler ZS has been benefiting from steady rise in demand for cloud security as the work-from-anywhere trend continues to gain momentum. Notably, the company’s unique offerings include four architectural advantages that firewalls cannot add. In addition, the company’s Edge cloud for policy enforcement, multi-tenancy, proxy for SSL or TLS inspection and zero trust network access are well poised to gain adoption amid the thriving remote work culture.

Zscaler currently carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for fiscal 2020 earnings has been revised upward by a penny to 21 cents per share in the past 30 days.
 

Zscaler, Inc. Price and Consensus

Zscaler, Inc. Price and Consensus

Zscaler, Inc. price-consensus-chart | Zscaler, Inc. Quote

Box BOX is benefiting from the growing customer base and strong cloud storage demand. This Zacks Rank #2 company provides a single place to secure, share, and manage all of the content for an organization’s internal and external collaborations and processes. Integration with other software like Microsoft Office 365, Google Apps for Work, Adobe and salesforce is likely to enhance Box’s user base.

Box currently carries a Growth Score of A. The consensus mark for the company’s fiscal 2021 earnings has moved up by a penny to 50 cents per share over the past 30 days and suggests an improvement from the 3 cents reported in the previous year.
 

Box, Inc. Price and Consensus

Box, Inc. Price and Consensus

Box, Inc. price-consensus-chart | Box, Inc. Quote

Datadog DDOG has shown robust resiliency amid the coronavirus outbreak. It has gained from exposure to gaming, food delivery, e-commerce and streaming sectors that actually benefited from the pandemic-led lockdowns and shelter-in-home guidelines. The cloud-based monitoring and analytics platform provider has raised the current-year guidance on solid demand for its solutions.

Datadog currently carries a Zacks Rank of 2 and has a Growth Score of B. The consensus estimate for this year’s earnings has been revised upward in the past 60 days to earnings of 3 cents per share from a loss of 6 cents. The earnings estimate reflects significant improvement from the loss of a penny reported in 2019.
 

Datadog, Inc. Price and Consensus

Datadog, Inc. Price and Consensus

Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote

5 Stocks to Soar Past the Pandemic: In addition to the companies you learned about above, we invite you to learn about 5 cutting-edge stocks that could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of the decade.

See the 5 high-tech stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Box, Inc. (BOX) : Free Stock Analysis Report
 
Zscaler, Inc. (ZS) : Free Stock Analysis Report
 
Anaplan, Inc. (PLAN) : Free Stock Analysis Report
 
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
Datadog, Inc. (DDOG) : Free Stock Analysis Report
 
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