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What is Cloud Computing?
Cloud computing (CC) is the technique of processing, storing, and managing data on a network of remote computers hosted on the internet by cloud service providers rather than on a personal computer or local server using only as much compute power and storage as needed to meet demand. This theoretically allows for cheaper and faster computing because it eliminates the need to purchase, install, and maintain servers. What is SaaS?SaaS, also known as cloud application services, makes software available to users over the internet, usually for a monthly subscription fee. They are typically ready-to-use and are run from a users’ web browser which allow businesses to skip any additional downloads or application installations. SaaS accounts for 38.5% of cloud computing revenue. (Source) For more insightful information you are encouraged to read Cloud Computing 101.
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What is the Price-to-Sales Ratio
The price-to-sales (P/S) ratio, which equals a company’s market capitalization divided by its annual revenue, is often used as a valuation metric for SaaS companies in place of the P/E ratio. A higher P/S ratio denotes optimism among investors that attractive revenue growth will continue and that the revenue will eventually generate profits.
Our Pure-Play Cloud Computing SaaS Stocks Portfolio
Below is a list of the 8 pure-play constituent cloud computing companies with market capitalizations of $20B or more presented in descending order of their performances MTD, their market capitalizations, their forward price-to-sales ratios and ranks, and any pertinent news, analyses and/or commentary where available.
- Market Capitalization: $184B
- Forward Price-to-Sales Ratio: 15.2 (Ranks #1)
- News, Analyses, and Commentary:
- ServiceNow Announces Powerful Data Enhancements to Unlock Value With Ultra-Scale and Performance
- ServiceNow Releases Its Most Comprehensive Set of New AI Innovations With the Now Platform Xanadu Release
- Market Capitalization: $21B
- Forward Price-to-Sales Ratio: 10.1 (Ranks #4)
- News, Analyses, and Commentary:
- Jim Cramer Believes MongoDB ‘Is At The Right Price’
- Market Capitalization: $38B
- Forward Price-to-Sales Ratio: 9.6 (Ranks #5)
- News, Analyses, and Commentary:
- Is Snowflake Stock’s 9.6 Forward PSR Still Worth it? Buy, Sell, or Hold?
- Market Capitalization: $43B
- Forward Price-to-Sales Ratio: 9.6 (Ranks #7)
- News, Analyses, and Commentary:
- Atlassian Corporation Shares Could Be 40% Below Their Intrinsic Value Estimate
- Market Capitalization: $25B
- Forward Price-to-Sales Ratio: 9.0 (Ranks #6)
- News, Analyses, and Commentary:
- When Should You Buy HubSpot?
- Market Capitalization: $27B
- Forward Price-to-Sales Ratio: 14.6 (Ranks #2)
- News, Analyses, and Commentary:
- Cloudflare Stock Falls Amid Market Uptick: What Investors Need to Know
- Market Capitalization: $66B
- Forward Price-to-Sales Ratio: 7.2 (Ranks #8)
- News, Analyses, and Commentary:
- Does Workday Have a Major Revenue Problem?
- Market Capitalization: $37B
- Forward Price-to-Sales Ratio: 12.8 (Ranks #3)
- News, Analyses, and Commentary:
- Datadog is Attracting Investor Attention: Here is What You Should Know
Summary
The above 8 cloud computing stocks, with an average market capitalization of $55.1B, went UP 2.8% w/e September 13th and are DOWN just 0.5% MTD.
Conclusion
According to Fortune Business Insights, the global cloud computing SaaS market is projected to have a CAGR of 18.4% between now and 2032 which should bode well for CC companies.More By This Author:Our Conservative Cannabis Stock Portfolio Continues To Outperform
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