7 Internet Software Stocks That Are Buys Right Now

The definition of software has undergone a sea change in recent times with the advent of cloud computing. So whereas earlier we would be talking about software enabling different functions, we are now mainly putting those functions in the perspective of where they stand with respect to cloud adoption and deployment.

Therefore, today there are two kinds of software development: software published for on-premises deployment and software published for cloud based deployment, whether it is offered as Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (IaaS), or Software-as-a-Service (IaaS).

The cloud basically means IT infrastructure that is maintained by third parties for use by companies according to their specific requirements. This transfer of corporate workloads to shared resources, i.e. “the cloud” therefore leads to the elimination of unutilized or under-utilized capacity, resulting in cost efficiencies for companies. This facility is a broad definition of IaaS and is monetized on the basis of the amount of capacity used.

But while infrastructure houses data, software is required to manage, process and use the data and facilitate its transfer between locations. Therefore, software platforms supporting these functions are like platforms enabling the cloud. This is a broad definition of PaaS and monetized based on usage or subscription.

Companies writing programs that can be operated in the cloud, applied to data on-site or in the cloud, and monetized through subscriptions depending on usage are grouped under SaaS. This is where a lot of collaboration is going on primarily to facilitate interoperability and increase security.

With that backdrop, let us take a look at some software stocks that are currently rated Buy by Zacks.

[Zacks Ranks are as follows: Zacks Rank #1 (Strong Buy), Zacks Rank #2 (Buy), Zacks Rank #3 (Hold), Zacks Rank #4 (Sell) and Zacks Rank #5 (Strong Sell)].

Paylocity Holding Corporation (NASDAQ:PCTY)

Paylocity offers cloud-based payroll and HR solutions to SMBs in the U.S.

Some functions its software takes care of are payroll processing and administration; employee information management; regulatory compliance and reporting including under the Affordable Care Act; social media for peer-to-peer collaboration and recognition; and performance appraisal.

Zacks Rank #1

Last EPS Surprise 116.67%

Synchronoss Technologies, Inc. (NASDAQ:SNCR)

Synchronoss offers cloud-based software activation services to accelerate and monetize value-added services in broadband networks and connected devices. It primarily serves mobile carriers, enterprises, retailers and original equipment manufacturers (OEMs) worldwide.

Software functions it provides include cloud-based sync, backup, storage and content engagement capabilities, broadband connectivity solutions, analytics, identity and access management, secure mobility management, and enterprise-wide sharing and collaboration.

Zacks Rank #1

Last EPS Surprise 12.90%

Zendesk, Inc. (NYSE:ZEN)

Zendesk offers a customer service platform as-a-service with an interface enabling one-on-one customer interaction while tracking conversations, aggregating customer data and providing related analytics for visualization using a broad range of applications. It operates in 150 countries.

Zacks Rank #1

Last EPS Surprise 6.67%

Atlassian Corporation plc (NASDAQ:TEAM)

Headquartered in Sydney, Australia, Atlassian focuses on team productivity with tools for team planning, content creation, messaging and code sharing. It also provides software hosting services worldwide.

Zacks Rank #2

Last EPS Surprise 100.00%

SharpSpring, Inc. (NASDAQ:SHSP)

SharpSpring offers a cloud based marketing automation platform for SMBs and a product enabling companies to send high-volume email messages. It operates worldwide.

Zacks Rank #2

Last EPS Surprise 61.54%

Rocket Fuel Inc. (NASDAQ:FUEL)

Rocket Fuel operates in the U.S., Canada, the UK, Australia, France, Germany, Italy, Spain and Sweden.

It offers AI-driven digital advertising solutions (including direct response) through its big-data-driven real-time optimization engine. It also has computational infrastructure facilitating purchase and delivery of highly-automated digital advertising campaigns. Additionally, its data management platform allows marketers to accept, analyze, segment and export their own and third-party audience data for advertising, customer relationship management, email marketing, call-center routing, or exploit other opportunities.

Zacks Rank #2

Last EPS Surprise 45.07%

MINDBODY, Inc. (NASDAQ:MB)

MINDBODY offers a cloud-based business management and payments platform for SMBs in the wellness services industry. Its customers are currently located in California, New York, Texas, the UK and Australia

It’s software facilitates operations including client scheduling, online booking, staff management, client relationship management, integrated software and payments, retail point-of-sale, analytics and reporting with a focus on user experience.

Zacks Rank #2

Last EPS Surprise 32.00%

Conclusion

Choosing the right stocks can be a tricky business but picking an industry with secular growth drivers and stocks that Zacks ranks Buy definitely increases the chances of beating the odds.