Stocks to watch: Zscaler, DocuSign, GitLab, HPE, Uipath

US stocks remained in the spotlight this week as some of the most popular companies like Nvidia, Nutanix, Li Auto, and Affirm published their earnings.

Nvidia stock price retreated after its results while Affirm, a leading buy now pay later (BNPL) company, published strong numbers. 

Next week will be an important one for the market as the US will publish the latest non-farm payroll (NFP) data on Friday. These are crucial numbers now that the Federal Reserve has turned its focus to the labor market.

The strength or weakness of these numbers will help to determine the size of the September rate cut. If the jobless rate rises again, it will increase the odds of the Fed cutting rates by 0.50% in the next meeting.

Broadcom will be the most important company that will publish its financial results next week. It is a notable company because of its scale and the fact that it is at the intersection of artificial intelligence (AI) and software. 

Read more: Broadcom stock: August 28 and Sep 5 are key dates for AVGO

Zscaler

Several big players in the cybersecurity industry have published their financial results recently. Palo Alto Networks released strong results while CrowdStrike unveiled a $60 million hit after its last outage.

Zscaler (ZS), a company that provides solutions like Secure Internet Access, Secure Private Access, Digital Experience, and Data Protection will be in the spotlight on Monday. Its results will be notable because it is a large firm with a market cap of over $29 billion and its stock has dropped by over 10% this year.

Zscaler’s business has done well in the past few years as its annual revenue has jumped from over $302 million in 2019 to over $2 billion in the trailing twelve months. As with other cybersecurity companies, the concern is whether its business will continue its momentum.

Analysts expect the results to show that its revenue rose by 24.80% to $567 million. Its forward guidance is expected to show that revenue will be $2.14 billion, up by 32.50% in 2023. Zscaler has a long record of beating its analysts’ estimates.  Zscaler stock tanked by 17% after the last earnings.

GitLab 

GitLab is another software company that will publish its financial results on Tuesday next week. It is a company that is used widely by companies building software solutions. It has a market cap of over $7.6 billion, making it smaller than GitHub, which Microsoft bought for $7.5 billion in 2018.

GitLab is used by companies like Goldman Sachs, Airbus, Lockheed Martin, and Nvidia. Its annual revenue has risen from $81.2 million in 2020 to over $579 million in the last financial year. This growth has come at a cost as its annual losses have jumped to over $424 million, raising concerns that it is overvalued.

The company’s earnings are expected to come in at $176 million while its annual guidance will be a 27% increase from $736 million. GitLab stock has dropped by over 23% this year.

DocuSign

DocuSign is another well-known software company whose stock will come out next week. Like Zoom Video, it has become a fallen angel whose stock has dropped from over $300 during the pandemic to $60. 

DocuSign’s challenge is that the signing industry has gotten more competitive, with companies like Google, Adobe, Box, and Microsoft having similar solutions. In a time of platformization, many companies are moving to one large software provider.

DocuSign’s revenue has moved from over $974 million in 2020 to over $2.76 billion last year. Analysts expect that its revenues will rise by 6% to $2.9 billion this year, meaning that its growth has stalled. 

Fortunately, there are rumors that some private equity companies are circling the company, which would be a good outcome for investors. 

UiPath

UiPath will be in focus because of how it performed in its final results in May. Its stock crashed by over 30% after the company released weak results that revealed its growth was falling. 

Its revenue rose by 16% last quarter to $335 million while its guidance was that its revenue for the last quarter will be between $300m and $305 million. Uipath replaced the CEO and noted that it was seeing longer deal scrutiny and lengthening sales cycle.

The other top SAAS companies that will publish their financial results next week are Smartsheet, Asana, C3.ai, and GuideWire Software.

HP Enterprise

Meanwhile, HP Enterprise, a company that sells products like servers, storage solutions, and networking, will also release its results. 

In its last results, the stock jumped by more than 10% after it demonstrated that it was well-positioned to benefit from AI. It also unveiled a partnership with Nvidia to build products like HPE Private Cloud AI.

HPE stock price has dropped by over 18% from its highest point this year and analysts expect its revenue will come in at $7.6 billion.

The other top companies that will publish their numbers next week are Copart, DICK’S Sporting Goods, Casey’s General Stores, Hormel Foods, Samsara, and Nio.