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3 Software Stocks to Make the Most of Remote Working Trend

The software space looks poised to make a comeback this year as the shift to digitization continues with trends like remote working driving demand. Notably, per a report by Gartner, the worldwide IT spending is set to rebound this year, increasing 6.2% compared to a decline of 3.2% in 2020. Importantly, among the IT spending segments, enterprise software is estimated to have the strongest rebound upon improving and expanding remote work environments, rising 8.8% this year, compared to a decline of 2.4% in 2020.

The report stated that the digital transformation witnessed in 2020, fueled by the need for remote working and education, was instrumental in abating the negative effect that the pandemic had on IT spending coming into 2021. Moreover, the report mentioned that in 2021, digital business, led by projects with “a short Time to Value,” is set to receive more money and board attention. In fact, Gartner stated that through 2024, businesses will be forced to accelerate their digital business transformation plans by “at least five years to survive in a post-COVID-19 world that involves permanently higher adoption of remote work and digital touchpoints.” Areas such as cloud computing, security, core business applications and customer experience are expected to be at the forefront. Notably, global IT spending related to remote work is estimated to rise 4.9% in 2021 and total $332.9 billion.

Moreover, Statista estimated in a report that revenues from the worldwide software market is set to witness a CAGR of 7.4% from 2021 to 2025, with enterprise software being the largest segment. Notably, in global comparison, the United States is set to generate maximum revenues in the software segment in 2021.

3 Top Software Stocks to Buy Now

The software space looks set to make a comeback in 2021, driving the shift to digitization as remote work seems ready to stay. This makes it a good time to invest in software companies that stand to benefit from this potential. Hence, we have handpicked three such stocks that carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Calix, Inc. CALX, together with its subsidiaries, provides cloud and software platforms, and systems and services required to deliver the unified access network in the United States, the Middle East, Canada, Europe, the Caribbean and internationally. The Zacks Consensus Estimate for its current-year earnings increased 10.8% over the past 60 days. The company’s expected earnings growth rate for the next quarter is 21.4%.

Digital Turbine, Inc. APPS, through its subsidiaries, provides media and mobile communication products and solutions. Its software platform enables mobile operators and original equipment manufacturers to control, manage and monetize devices. The Zacks Consensus Estimate for its current-year earnings increased 7.9% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.

Mimecast Limited MIME provides cloud security and risk management services for corporate information and email. The company offers Mimecast Email Security solution, which protects against the delivery of malware, malicious URLs and attachments, spam, viruses and so on. The Zacks Consensus Estimate for its current-year earnings increased 11.6% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


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