Top 10 software stocks to buy in Q3 2021

The outbreak of COVID-19 ushered the digital revolution to a whole new level as more businesses moved to the online platform to survive the lockdown and social distancing protocols. The adoption of rapidly growing concepts like Artificial Intelligence (AI), Machine Learning (ML), Data mining, etc., have also been the tech sector's growth drivers.

In the wake of the sector’s boosted mainstream acceptance and demand, tech stocks have also experienced quite a bit increase in their demand. Even as the vaccine rollout gains momentum and the economy looks forward to full-scale reopening, the demand for tech stocks is likely to stay as the digital space grows and evolves further.

On that note, let us look at some tech stocks that are expected to grow in the coming months. 

1. Constellation Software Inc. (TSX:CSU)

Constellation Software Inc is in the business of developing and customizing software-based solutions for public and private sector markets. 

CSU stock closed at a value of C$ 1,911.3 on Monday, July 12, with a market cap of C$ 40.5 billion. The scrip posted a one-year growth of 20.51 per cent. It is trading nearly 41.5 per cent above its 52-week low of C$ 1366.66 (October 29, 2020).

Constellation Software saw its revenue grow by 23 per cent year-over-year (YoY) to US$ 1,176 million in Q1 2020. It also posted a net loss of US$ 175 million in the latest quarter, as against a net income of US$ 83 million in Q1 2020.

2. Ceridian HCM Holding Inc. (TSX:CDAY)

Ceridian HCM, which provides payroll processing related solutions, saw its stocks close at a price of C$ 119.68 on July 12, with a market cap of nearly C$ 18 billion.

CDAY shares were trading nearly 42.2 per cent above its 52-week low of C$ 67.67 (August 10, 2020). The tech stock grew 22.2 per cent in the last one year.

Ceridian’s total revenue grew by about 5.3 per cent YoY to US$ 234.5 million for the first quarter of 2021.

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3. Kinaxis Inc. (TSX:KXS)

Kinaxis Inc focusses on delivering cloud-based software services for sales and operations planning (S&OP).  Its stock, which closed at C$ 162.9 on July 12, held a market cap of C$ 4.43 billion.

KXS stock generated a three-month return of about four per cent. In the last one month, it grew 15 per cent.

Kinaxis posted a total revenue of is US$ 57.7 million, up nine per cent YoY, in Q1 2021. Its SaaS revenue was up 14 per cent YoY to US$ 40.6. 

4. Descartes Systems Group Inc. (TSX:DSG)

Descartes Systems designs and codes software solutions that are used in the shipping industry.  Its market cap stood at C$ 7.4 billion after its stocks closed at C$ 87.6 on July 12.

DSG stock posted a three-month return of 7.51 per cent, trading nearly 31 per cent above its 52-week low of C$ 67.17 (September 21, 2020).

Descartes’ revenues climbed 18 YoY to US$ 98.8 million in Q1 FY22. Its net income of US$ 18.4 million was about 67 per cent YoY higher in the latest quarter.

5. com Inc. (TSXV:TOI)

Topicus.com, a tech company headquartered in Toronto, saw its stocks grow by 2.48 per cent in the last one year. With a closing price of C$ 90 on July 12, its market cap stood at C$ 3.58 billion.

TOI stock was nearly 58 per cent above its 52-week low of C$ 57 (February, 03, 2021).

Topicus’ revenue increased by 50 per cent YoY to €179.6 million in Q1 2021, up from that of €119.8 million in Q1 2020.

6. Docebo Inc. (TSX:DCBO)

Founde in 2005, Docebo has emerged as a globally recognized company penetrating tech markets in the US, the UK, France, Canada, etc. The company held a market cap of C$ 2.46 billion and a closing price of C$ 75.5 on July 12.

DCBO stock gained over 26 per cent in the last three months and inflated by nearly 107 per cent in the past year.

Its Q1 2021 earnings report reflects a total revenue of US$ 21.7 million, noting an increase of 61 per cent YoY.

7. Sangoma Technologies Corporation (TSX:STC)

The hardware and software components provider held a market cap of C$ 397 million and a closing stock price of C$ 2.99 on July 12. Its scrips grew by nine per cent over the past year and was trading nearly 32 per cent above its 52-week low of C$ 2.24 (September 25, 2020).

Sangoma’s sales amounted to US$ 35.44 million in Q3 FY21. In this quarter, its revenues stood at about US$ 28 million, up from that of US$ 26.6 million in the third fiscal quarter of 2020. 

8. Quisitive Technology Solutions Inc. (TSXV:QUIS)

Tech firm Quisitive Technology Solutions Inc. (QUIS) held a market cap of C$ 482 million. After closing at C$ 1.5 on July 12, its stock was trading nearly 25 per cent below its 52-week high of C$ 1.97 (attained on May 05, 2021).

QUIS stock gained over 174 per cent over the past year.

Quisitive’s revenue increased to about US$ 12.7 million in Q1 2021, up from that of US$ 10.9 million in Q1 2021.

9. Payfare Inc. (TSX:PAY)

The international fintech company held a market cap of about C$ 558 million and stock price of C$ 12.32 on July 12.

PAY stock delivered a return of 75 per cent in the last one month.

Payfare’s total revenue climbed 18 per cent YoY to $5.05 million in Q1 2021. 

10. Open Text Corporation (TSX:OTEX)

Open Text, with a market cap of over C$ 17 billion, closed at a price of C$ 63.48 on July 12. The tech stock was trading 33 per cent above its 52-week low of C$ 47.95 (November 02, 2020), and holding a one-year return of over 11 per cent .

Open Text posted total revenues of US$ 932.9 million in Q3 FY21. It is set to announce its Q4 FY21 results in August. 

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.