Upland Software’s Stock Skyrockets: AI Solutions Fuel Customer Growth
Upland Software (UPLD) shares have surged 93.3% over the past month, significantly outpacing the Zacks Computer & Technology sector’s return of 4.3% and the Zacks Internet – Software industry’s increase of 9.6%.
This remarkable jump can be traced back to UPLD’s dedication to customer expansion and successful implementations of AI technologies.
Monthly Performance Review
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In the third quarter of 2024, Upland Software successfully acquired 122 new customers, including 18 major clients. This showcases a strong demand for its offerings and signifies a significant expansion of its customer portfolio.
Additionally, the company strengthened its relationships with 312 existing customers, marking 27 significant expansions. This interest largely stems from its robust generative AI solutions.
Given these developments, is UPLD stock a compelling investment option? Let’s take a closer look.
AI Solutions Boost UPLD’s Growth Prospects
Upland Software’s dedication to Generative AI (GenAI) solutions is proving beneficial in capturing customer interest. Notably, Upland RightAnswers and Upland BA Insight have become essential tools in attracting new business.
In Q3 2024, Upland RightAnswers, the company’s AI knowledge management tool, achieved notable recognition by receiving 17 badges in the G2 Fall 2024 market reports, reflecting its effective performance in the AI-driven knowledge management field.
Upland BA Insight, another significant offering designed for enterprise search, also garnered new accolades, further solidifying Upland’s market position.
Strategic Partnerships Enhance Upland’s Offerings
Upland Software’s growing partner network, including firms like Microsoft (MSFT) and Konica Minolta (KNCAY), is instrumental to its business strategy.
Recently, Upland expanded its partnership with Konica Minolta to provide secure cloud-based fax solutions, integrating them with Konica’s bizhub One i-Series Multi-Function Printers throughout the U.S. and Canada.
In Q3, Upland also introduced BA Insight for Microsoft Azure AI Search in the Microsoft Azure Marketplace, enabling customers to effortlessly use BA Insight’s user experience platform alongside Azure AI Search for streamlined content searching.
Furthermore, Upland Software is pursuing multiple AI initiatives, like incorporating AI features into products such as Upland Qvidian. Their collaboration with International Business Machines (IBM) WatsonX is enhancing product capabilities to better serve enterprise clients.
The partnership with IBM not only brings advanced AI functionalities but also ensures compliance with data privacy standards, which is crucial for enterprise customers.
Upland’s FY24 Outlook Shows Challenges
Despite a flourishing portfolio and strong customer acquisition strategies, Upland Software is facing a challenge due to the planned runoff of Sunset asset revenue, which is anticipated to negatively influence its overall revenue.
For Q4 2024, Upland expects total revenues to fall between $65.9 and $71.9 million, with subscription and support revenues anticipated between $60.2 and $65.2 million—indicating a 5% decline from the same quarter last year.
Looking ahead to 2024, total revenue estimates range between $272.6 and $278.6 million, reflecting a projected 7% drop at the midpoint compared to the prior year.
Earnings Estimates Highlight Mixed Trends for UPLD
The Zacks Consensus Estimate for Q4 2024 revenues is set at $68.06 million, suggesting a 5.71% decrease year-over-year.
Meanwhile, the consensus estimate for fourth-quarter 2024 earnings is pegged at 24 cents per share, up by a penny in the last month, representing a year-over-year increase of 71.43%.
For FY2024, the Zacks revenue consensus estimate is $274.83 million, reflecting a decline of 7.73% year-over-year. The consensus estimate for earnings stands at $1.04 per share, reflecting a 21% increase over the past month and a year-over-year growth of 7.22%.
Upland Software, Inc. Price and Consensus Analysis
Upland Software, Inc. price-consensus-chart | Upland Software, Inc. Quote
For the latest EPS estimates and surprises, refer to the Zacks Earnings Calendar.
Investor Considerations for UPLD Shares
Upland Software shares are currently considered undervalued, with a Value Score of A.
Moreover, UPLD shares are trading above both the 50-day and 200-day moving averages, a sign of a bullish market trend.
UPLD Shares Positioned Above 50-Day & 200-Day SMAs
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Upland’s strong product lineup and growing partner networks play crucial roles in making its stock appealing for long-term investment. Its favorable valuation further supports the case for investment.
Currently, Upland Software holds a Zacks Rank #1 (Strong Buy), which indicates strong investor interest. You can see the complete list of today’s Zacks #1 Rank stocks here.
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