The software industry has been one of the biggest beneficiaries of the COVID-19 pandemic as the demand for software and cloud computing reached all-time highs amid remote work and entertainment lifestyles. Furthermore…
the rapid digital transformation of virtually all sectors is expected to drive this industry’s growth over an extended period.
However, rising investor optimism surrounding the tech industry has resulted in multiple start-ups entering the space. Wells Fargo Securities’ Chris Harvey characterized the software industry as being crowded. Also, with tech giants dominating the software space with breakthrough innovations and cost-effective software offerings, several lesser-known companies have been unable to capitalize on the rapid tech integration.
Given this backdrop, we think fundamentally weak software stocks ironSource Ltd. (IS – Get Rating), Support.com, Inc. (SPRT – Get Rating), Exela Technologies, Inc. (XELA – Get Rating), and Marin Software Incorporated (MRIN – Get Rating), which gained popularity amid the pandemic, are best avoided now.
IS is a business platform for app developers and mobile operators. The company’s operations occur through two platforms–Sonic solution suite for developing and monetizing apps, games and content; and Aura solution suite, which gives telecom operators new opportunities for relevant content to enhance device usage. The company is based in Tel Aviv-Yafo, Israel. IS went public through a reverse merger with blank check company Thoma Bravo Advantage on June 29, 2021.
On July 21, IS collaborated with Samsung India to integrate its Aura suite on Samsung devices sold in the country.
In its fiscal second quarter, ended June 30, IS’ revenue increased 82.6% year-over-year to $135.04 million. However, its total operating expenses increased 106.6% year-over-year from the same period last year to $96.03 million. Its net income decreased 56.9% year-over-year to $10 million, and its net income per ordinary share fell 50% in the same period to $0.01.
Analysts expect IS’ revenues to be $128.91 million in its fiscal third quarter, ending September, indicating a slight sequential decline.
The stock has slumped 9.6% in price since its stock market debut on June 29 to close yesterday’s trading session at $9.94.
IS is ranked #51 out of 146 stocks in the D-rated Software – Application industry in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
To see the additional POWR Rating for Growth, Value, Momentum, Stability, Quality, and Sentiment for IS, click here.
SPRT employs home-based experts to provide technological solutions to its customers across media, communication, healthcare, and retail. Its services include voice, chat, self-service, and technical support. The Sunnydale, Calif., company also provides users with SUPERAntiSpyware software, a malware protector, and guides for the use of its services.
On March 19, SPRT agreed to be acquired by cryptocurrency company Greenidge Generation Holdings Inc. The stockholders’ vote for the merger will be conducted on September 10. Six complaints have been filed against this acquisition, and two of them allege that the board has breached its fiduciary duties regarding the merger agreement.
SPRT’s total revenue decreased 22.9% year-over-year to $8.51 million in its fiscal second quarter, ended June 30. Its gross profit fell 21.8% from the same period last year to $3.02 million. Its net loss and net loss per share came in at $0.80 million and $0.03, respectively, indicating a substantial decline from positive year-ago values.
SPRT is gearing up for a…
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