The Home Depot, Inc. (HD), STMicroelectronics N.V. (ADR) (STM), Rally Software Development Corp (RALY): The Business Outlook Just Got Better for These 3 Companies

Agility can take Rally Software higher

Colorado based Rally Software Development Corp (NYSE:RALY) offers cloud computing solutions for managing Agile software development. Introduced in 2001, Agile is hardly a new technology; however, the market for it is exploding now. The Standish Group estimates that Agile techniques were used for 29% of new software development projects in 2011. The company, recording all of its revenues from solutions built around Agile, had a fairly successful listing through an initial public offer (IPO) in April.

As on January 31, Rally Software Development Corp (NYSE:RALY) had 168,562 paid users and more than 1,000 corporate customers, including 34 of the Fortune 100 companies. While this gives a rough idea about the company’s business clientele, the fundamentals are not bad either. During the last four years, its annual revenues have grown from $18.4 million to $56.9 million. The bottom line has not kept up with the swelling revenues, but it is not prudent to expect profits during the growth phase while the company is ramping up its operations.

While booming revenues will eventually pull the company out of the red, Rally Software Development Corp (NYSE:RALY) is also working on an add-on called Rally Software Development Corp (NYSE:RALY) Portfolio Manager, which will increase its addressable market.

The Foolish bottom line

Overall, these companies are good examples of further improvements in business operations. While The Home Depot, Inc. (NYSE:HD) would be a safe bet, STMicroelectronics N.V. (ADR) (NYSE:STM) and Rally Software Development Corp (NYSE:RALY) also have the potential to produce positive earnings surprises.

The article The Business Outlook Just Got Better for These 3 Companies originally appeared on Fool.com.

Jacob Wolinsky has no position in any stocks mentioned. The Motley Fool recommends Home Depot. Jacob is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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