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Upland Software Surges 93% in a Month: Should You Buy the Stock?

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Upland Software (UPLD - Free Report) shares have surged 93.3% in the past month, outperforming the broader Zacks Computer & Technology sector’s return of 4.3% and the Zacks Internet - Software industry’s rise of 9.6%.

The outperformance can be attributed to UPLD’s strong focus on customer expansion and successful AI integrations.

One Month Performance

Zacks Investment Research
Image Source: Zacks Investment Research

Upland Software added 122 new customers, including 18 major customers, in the third quarter of 2024. This reflects strong demand for its solutions and broadening its customer base.

The company expanded relationships with 312 existing customers, including 27 major expansions. UPLD’s new and expanded customers were attracted to its growing portfolio of generative AI solutions. 

Given a strong portfolio and expanding clientele, is UPLD stock an attractive investment opportunity? Let’s dig deep to find out.

Expanding AI Portfolio Aids UPLD’s Prospects

Upland Software’s Generative AI (GenAI) solutions played an important role in driving customer interest. The company highlighted its Upland RightAnswers and Upland BA Insight solutions as core drivers in attracting new business.

In the third quarter of 2024, Upland RightAnswers, its AI knowledge management solution, gained substantial market recognition by earning 17 badges in the G2 Fall 2024 market reports, demonstrating its effectiveness in the AI-driven knowledge management space.
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Upland BA Insight, the company’s enterprise search solution, also earned several new recognitions. This product is a key part of Upland’s AI-driven portfolio, contributing significantly to its market position.

Upland Benefits From a Strong Partner Base

Upland Software’s expanding partner base, which includes Microsoft (MSFT - Free Report) and Konica Minolta (KNCAY - Free Report) , has been a key catalyst.

UPLD recently announced that Upland InterFAX has expanded its partnership with Konica Minolta to provide secure, cloud-based fax solutions integrated into Konica Minolta’s bizhub One i-Series Multi-Function Printer across the United States and Canada.

In the third quarter, Upland announced the availability of BA Insight for Microsoft Azure AI Search in the Microsoft Azure Marketplace. This allows customers to seamlessly integrate BA Insight’s user experience platform and over 90 connectors with Azure AI Search for intelligent, secure, and efficient content search without navigating multiple systems.

Upland Software also focuses on several AI initiatives, including integrating AI-powered features into products like Upland Qvidian. The partnership with International Business Machine (IBM - Free Report) WatsonX for AI-driven solutions has enhanced product capabilities and attracts enterprise customers.

The company’s partnership with IBM provides advanced AI functionalities and integrations, which help Upland deliver more value to its enterprise customers and meet the needs for data privacy and compliance.

UPLD Offers Weak View for FY24

Despite expanding its portfolio and a strong focus on customer expansion, Upland Software is suffering from a planned runoff of Sunset asset revenue, negatively impacting its overall revenues.

For the fourth quarter of 2024, Upland Software expects total revenues between $65.9 and $71.9 million, including subscription and support revenues between $60.2 and $65.2 million, a decline in total revenues of 5% at the midpoint from the year-ago quarter.

For 2024, Upland Software expects total revenues between $272.6 and $278.6 million, including subscription and support revenues between $256.6 and $261.6 million, a decline in total revenues of 7% at the midpoint from the year-ago quarter

Earnings Estimate Revisions Show Mix Trend for UPLD

The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $68.06 million, suggesting a decline of 5.71% from the year-ago quarter’s levels.

The consensus mark for fourth-quarter 2024 earnings is pegged at 24 cents per share, increased by a penny in the past 30 days. The figure indicates a year-over-year increase of 71.43%.

For full-year 2024, the Zacks Consensus Estimate for revenues is pegged at $274.83 million, suggesting a decline of 7.73% from the year-ago quarter’s levels.

The consensus mark for full-year 2024 earnings is pegged at $1.04 per share, which increased 21% in the past 30 days. The figure implies a year-over-year increase of 7.22%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

What Should Investors DO With UPLD Shares?

Upland Software shares are cheap, as suggested by a Value Score of A.

UPLD shares are also trading above the 50-day and 200-day moving averages, indicating a bullish trend.

UPLD Shares Trade Above 50-Day & 200-Day SMA

Zacks Investment Research
Image Source: Zacks Investment Research

UPLD’s robust portfolio and expanding partner base are key drivers that make the stock attractive for long-term investors. The stock’s attractive valuation also makes it worth investing in right now.

At present, Upland Software sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.


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