What Happened?
Shares of cloud software provider Upland Software (NASDAQ: UPLD) jumped 17.7% in the afternoon session after its board of directors approved a stock repurchase program to buy back up to $10 million of its outstanding common stock. The buyback authorization, which represents nearly 19% of Upland's current market capitalization, was seen by investors as a strong vote of confidence from management. This move comes after the stock has declined over 60% in the past six months, suggesting the board believes the shares are undervalued. The company's decision to deploy capital on repurchases, announced in an 8-K filing, was particularly noteworthy as it followed a recent second-quarter earnings report that missed analyst estimates. The program does not have a specified expiration date.
The shares closed the day at $2.22, up 19.2% from previous close.
Is now the time to buy Upland Software? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Upland Software’s shares are extremely volatile and have had 62 moves greater than 5% over the last year. But moves this big are rare even for Upland Software and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 3.7% on the news that markets pulled back as a hotter-than-expected wholesale inflation report for July dampened hopes for a Federal Reserve interest rate cut. The U.S. Producer Price Index (PPI), a key measure of wholesale inflation, rose 0.9% month-over-month in July, far exceeding the 0.2% increase that economists had predicted. Annually, prices at the wholesale level jumped 3.3%, also surpassing the 2.5% forecast. This hotter-than-expected data has poured cold water on widespread expectations for an interest rate cut from the Federal Reserve next month. Persistent inflation makes it less likely for the central bank to ease monetary policy. Sectors with high-growth stocks, such as SaaS, are particularly sensitive to interest rate changes, as the prospect of higher rates for longer can diminish the present value of their future earnings, leading to a decline in stock prices.
Upland Software is down 51.3% since the beginning of the year, and at $2.18 per share, it is trading 58.9% below its 52-week high of $5.31 from December 2024. Investors who bought $1,000 worth of Upland Software’s shares 5 years ago would now be looking at an investment worth $64.38.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
