Adobe Systems Incorporated (ADBE), Intuit Inc. (INTU): There’s Always Upside in the Software Industry

Despite its size (its market capitalization reaches $17.5 billion), I believe that there is still room left for growth. With a massive user base, cross-selling capabilities will continue to drive growth in the years to come. The incursion into new segments such as online banking and healthcare should further widen its customer base.

By continuously incorporating its clients’ demands to its products, the company managed to keep ahead of its competition. Going forward, this feature will help it penetrate new markets and create region or country-specific products.

Trading at 21 times its earnings with almost half of the industry average valuation, the company offers compelling growth prospects, above average margins and returns, a strong growth story, and very little debt. I’d recommend BUYING Intuit Inc. (NASDAQ:INTU)’s stock for the long-term.

Bottom line

Above I have reviewed three companies within the application software industry that offer strong business models and brand names. They also plenty of growth catalysts for the years to come. The increasing use of the Internet worldwide and decreasing costs for both the companies and their customers portray a highly encouraging outlook. As I wouldn’t like to miss out on a buying opportunity, I’d add all three of them to your long-term portfolio and just prepare to enjoy the upside.

Victor Selva has no position in any stocks mentioned. The Motley Fool recommends Adobe Systems Incorporated (NASDAQ:ADBE) and Intuit. The Motley Fool owns shares of Intuit. Victor is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article There’s Always Upside in the Software Industry originally appeared on Fool.com and is written by Victor Selva.

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