Anyone can make money in a bull market when inflation and interest rates are low. Retail investors were active in 2020 and 2021 because returns were almost guaranteed. With a bear market like we’re experiencing now, ETFs and mutual funds aren’t the surefire picks they were a few years ago, making individual equity analysis more important.
The S&P 500 is down 15% this year and the Nasdaq is showing a loss of 24%. Inflation, the war in Ukraine, and a sell-off of overpriced tech stocks have fueled the decline. From a macro perspective, 2022 looks like a disaster in the making for investors. Fortunately, there are a select few companies that are still thriving in these difficult economic times.
Asure Software announces 23% Annual Revenue Growth
Asure Software, Inc (NASDAQ: ASUR) is shaping up to be one of the great comeback stories of 2022. Since peaking at $9.80 in November 2021, the company appeared to be on the same downtrend as the rest of the market, dipping to $5.77 on March 31st. That changed when they released their Q1 financial report. ASUR is on the rise again.
Asure’s highlight of Q1 was the revenue numbers. They’re up 23% year-over-year, and non-GAAP EBITDA, which hit $4 million, is up 18%. Chairman and CEO Pat Goepel attributes the surge to the solid execution of their 2022 business plan, with a strong focus on building sales and ramping up operating momentum. Based on the numbers, it’s working.
Asure Software is a leading provider of Human Capital Management (HCM) software solutions. Unlike other tech companies that suffered through the pandemic, ASUR was able to capitalize on the growth of remote and hybrid business models. Their Integration Marketplace and API-first development strategy are revolutionizing human resource management.
Trade Desk Shows Topline Growth of 43% YOY During Q1
Share prices can be deceiving. Trade Desk Inc (NASDAQ: TTD) is showing a 44% decline in the market this year, but their Q1 report revealed topline growth of 43%. Currently hovering around $50 a share, most analysts have this company as a solid “buy now” opportunity. According to Seeking Alpha, TTD is on a run rate of $1.8 billion with a CAGR of 30%.
These numbers should come as no surprise to anyone who’s been paying attention to the digital marketing space. Trade Desk specializes in real-time programmatic marketing automation technologies and is the largest independent demand-side platform in the world. Their two main competitors are DoubleClick by Google and Facebook Ads.
The Q1 numbers are promising, but they could pale in comparison to what may be coming later this year. CEO Jeff Green is working on a partnership with Netflix (NYSE: NFLX) and reports that he’s “extremely optimistic” that the deal will come to fruition. Combine that with Q1 being the historically low season for ad-tech and 2022 could be a very good year for TTD.
Squarespace Reports a 10% Increase in Unique Subscriptions During Q1
Software as a service (SaaS) is all about user subscriptions. Squarespace (NYSE: SQSP) reported a 36% year-over-year increase in commerce revenue for Q1, with unique subscriptions up 10% to 4.2 million. The company’s average revenue per unique subscription (ARPUS) was also up, an increase of 7% to $204. The total GAAP revenue grew by 16% to $207.8 million.
Squarespace reported cash and cash equivalents of $230.5 million and they plan to put that to good use. The board of directors has authorized a $200 million share repurchase program that could be a prelude to further maneuverings in the coming months. They’re also trading below market value right now, making it a good time to invest.
Like the other companies on this list, Squarespace has benefitted from the remote and hybrid employment situations created by the pandemic. The need to create “side hustles” to survive in 2020 opened the eyes of prospective entrepreneurs. Squarespace is one of the top three platforms for new businesses to build a website, along with Wix and WordPress.
Zeta Reduces Cost of Revenue by 33%
Increasing sales is one way to boost revenue. So is cutting costs. Zeta Global Holdings Corp (NYSE: ZETA) reported a reduction in the cost of revenue of 540 bps year-over-year, roughly 33%. That, along with adding four new scaled customers in the quarter, resulted in a 24% YOY revenue increase to $126 million. Generated cash flow from operating activities was $21.2 million.
Zeta is a data-driven marketing technology company. They’ve been able to capitalize on the increase in online business since 2020 by offering a suite of multi-channel marketing tools focused on creating, maintaining, and monetizing customer relationships. In other words, they profit from the growth and retention rates of their customers.
According to CEO and Cofounder David A. Steinberg, “Zeta is off to an incredible start in 2022 as the power of our platform continues to deliver a greater return on investment for our customers. In the current environment, enterprises are challenged by a tough economy and large technology companies are eliminating their tracking tools. Zeta is a direct beneficiary.”
What These Companies Have in Common
Each of the firms profiled in this article has one thing in common. They didn’t just survive the pandemic. They found ways to profit and grow from it. The tech selloff of 2022 might make it seem like technology is a bad investment, but it’s not. Most of what we’re seeing is a correction. The companies here are growth stocks for the next bull market.
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