Small cap construction software stock Textura Corp (NYSE: TXTR) has been all over the place lately, meaning it might be time to take a look at it along with other small cap or mid cap construction, design or real estate software stocks like RealPage, Inc (NASDAQ: RP) and more well known Autodesk, Inc (NASDAQ: ADSK). After all, enterprise software stocks like these would offer a more indirect way to bet on a housing or construction "recovery," just like building materials stocks; plus earlier this summer, a benchmark global study (sponsored by Textura Corp) called Global Construction 2025 predicted that the global construction market will grow by more than 70% to reach $15 trillion by 2025.
With that in mind, here is a look at three important software players in the construction or real estate market:
Textura Corp. A leading provider of collaboration and productivity tools for the construction industry, Textura Corp's solutions serve all construction industry professionals across the project lifecycle – from takeoff, estimating, design and pre-qualification to bid management, submittals, LEED management and payment. The strange thing about Textura Corp's latest jump yesterday (by 14.86%) is that there is no new news out and that fiscal fourth quarter earnings are not scheduled to be released until after the market closes on Thursday, November 21. Of course, some volatility is expected as Textura Corp had an IPO back in June with 5,750,000 shares being issued at $15.00 per share to raise about $75 million and shares rose 39.4% to $20.91 per share on the first day of trading. Textura Corp has since been helped by bullish analysts coverage but investors should be aware that while Textura Corp has reported rising revenues of $9.36M (3 months ending 2013-06-30), $8.55M, $6.77M, $12.01M and $5.69M for the past five quarters, it has also reported net losses of $19.48M (3 months ending 2013-06-30), $4.18M, $5.00M, $7.52M and $3.92M. Nevertheless and in the last earnings report, the CFO stated: "Our pipeline remains robust and we are forecasting a continuation of our recent revenue growth trajectory during the remainder of fiscal year 2013." On Wednesday, small cap Textura Corp surged 14.86% to $34 (TXTR has a 52 week trading range of $19.68 to $47.25 a share) for a market cap of $837.40 million plus the stock is up 62.6% since last June for retail investors who got in late.
RealPage, Inc. A leading provider of on demand or so-called "Software-as-a-Service" or "SaaS" products and services for the rental housing industry, RealPage, Inc's broad range of property management solutions enable property owners and managers to increase revenues and reduce operating costs through higher occupancy, improved pricing methodologies, new sources of revenue from ancillary services, improved collections and more integrated and centralized processes. It should be mentioned that Tim Barker, the CFO and Treasurer, was scheduled to present at the RBC Technology, Internet, Media and Telecommunications Conference in New York yesterday at 4:00 PM EST and it will be interesting to see if his presentation (the webcast is available here) will move the stock this morning. Last Thursday, RealPage, Inc reported a 17.8% revenue increase to $98.1 million while GAAP net income came in at $12.9 million verses $2.1 million – giving the company a trailing P/E of 176.58 and a forward P/E of 34.37. Finally, it should be mentioned that in late October, RealPage, Inc announced the acquisition of ActiveBuilding, which offers a platform for improving the online living experience of apartment residents; plus announced the acquisition of Windsor Compliance, a leading provider of compliance monitoring services for the affordable housing industry. On Wednesday, small cap RealPage, Inc rose 0.31% to $25.78 (RP has a 52 week trading range of $16.88 to $26.34 a share) for a market cap of $2 billion plus the stock is up 19.5% since the start of the year and up 71.9% over the past five years.
Autodesk, Inc. A leader in 3D design, engineering and entertainment software, Autodesk, Inc has customers across the manufacturing, architecture, building, construction, and media and entertainment industries and has the broadest portfolio of state-of-the-art 3D design software for global markets. Last Thursday, Autodesk, Inc announced it would acquire Britain's Delcam Plc for 172.5 million pounds ($277 million) in order to expand its software offerings in the manufacturing sector. In early October, Autodesk, Inc had an "investor day" (the transcript is available here on Seeking Alpha) with Andrew Anagnost, the senior vice president of industry strategy and marketing, telling Bloomberg before hand that the company has 1.9 million subscribers and expects a 50% increase in that number through fiscal 2018. The company recently introduced subscription versions of some of its most expensive software to reflect broader trends in the software industry to shift toward subscription models plus to head off declining sales and profit this year. However, selling more Internet-based services could increase costs because they are generally more expensive to deliver plus the company has announced a restructuring plan that will involve layoffs and some consolidation of its leased real estate (meaning there will be some charges in coming earnings reports). Otherwise, it should be mentioned that Autodesk, Inc has a trailing P/E of 45.40 and a forward P/E of 26.71 plus the company will report earnings next Thursday after the market closes. On Wednesday, mid cap Autodesk, Inc fell 0.16% to $43.54 (ADSK has a 52 week trading range of $30.22 to $43.74 a share) for a market cap of $9.69 billion plus the stock is up 23.2% since the start of the year and up 109.7% over the past five years.
Finally, here is a look at the performance of all three mid or small cap real estate or construction software stocks:
As you can see from the above chart, all three stocks over the long term have rewarded investors albeit small caps RealPage and Textura Corp have been trending downward while Autodesk's performance has bounced around the past few years to be pretty flat for investors.
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