Investing in tech stocks does not need to be hard. Often, the product might be complex, but the application is pretty straightforward. Anyone could invest in tech stocks with just basic investment knowledge.
Unity Software and Crowdstrike each solve big problems. Additionally, they have some great growth opportunities, making them great buys for 2022 and beyond.
Developing a video game is hard. Without an engine to create the base game on, it would take many years to create a program that works. Unity Software has had success with these ideas through its 3D animation solution. Also, once the game is released Unity offers tools to make money from it, acquire a new audience, and review player behavior, creating a loop of information for game upgrades. This is not just useful for video games; Unity’s animation programs are able to bring industrial designs to life and build virtual reality and augmented models for an immersive experience.
Unity’s third-quarter results were excellent. Its total income was up 43% to $286.3 million. Operate solutions increased the quickest at 54%. It also makes up 65% of total earnings. It is a positive sign when the biggest segment is also growing the fastest. The main business metric management that was identified is customers spending more than $100,000 every year. That count rose to 973 from 739, up 32% over the past year.
Valuation has been a wild ride for Unity ever since going public in 2020.
While its price-to-sales (P/S) ratio is lower than its high, it is also far from where its low was. Forty times sales is not cheap, but Unity has delivered some great results throughout 2021. Moving into 2022, traders should watch its big customer spending count as well as partnerships from the future. During Q3, it had announced a joint venture with the UFC using the Metacast software to make an immersive experience for fans. Unity’s offerings have almost unlimited use cases, so traders would be smart to buy some stock because of its broad potential.
The access points are a vulnerable part in any network system. Malicious programs could be downloaded via the internet on a laptop and cause havoc on an entire business network, possibly holding the company’s information or the company for ransom. Crowdstrike helps secure those endpoints with its top Falcon platform. Its cloud-native security helps protect devices no matter where the employees are accessing the company’s network. When a customer signs in, it has multiple other solutions to grow its defense capabilities. In fact, about 68% of its subscribers use four or more modules.
Crowdstrike has had a successful year in 2021; its yearly recurring revenue (ARR) rose to $1.51 billion, up 67% from October 31, 2020. Q3 total earnings was $380 million, up 63% for the period ending October 31, with subscription earnings making up $357 million. While Crowdstrike is still unprofitable, it converted more than 30% of earnings into free cash flow. Customer count rose 75% to 14,687 during Q3 as well.
At its midpoint, Crowdstrike is heading for $1.43 billion in sales for FY22 representing a 64% growth. Cybersecurity is also a growing concern, and companies must prevent attacks by making their defenses stronger. Crowdstrike helps with this pursuit and seems to be a smart buy, trading almost 30% under its all-time high.
Author: Steven Sinclaire