Regardless of the ups and downs in business and the markets, life goes on for companies, and the need for cutting-edge information technology (IT) increases literally every day. While the uneven economy is keeping IT budgets in what is considered a normal pace, macro concerns may continue to keep a lid on spending. A new research note from Oppenheimer features companies that may continue to benefit from spending on what they dub the “rapid widespread rearchitecting to cloud services.”

The Oppenheimer team highlights six companies they see benefiting from the continued demand for software-as-a-service (SaaS) demand. We screened the Oppenheimer stocks and found four that look especially attractive for aggressive accounts. All are rated Outperform as well.

Salesforce

This company posted outstanding earnings for the second quarter, and it is one of Wall Street’s favorite large cap growth ideas now. Salesforce.com Inc. (NYSE: CRM) has been the momentum stock trader’s dream over the past few years. Many on Wall Street feel that while the stock trades mostly in line with its fast organic SaaS peer group, which many see as having the largest growth rate in 2015, the company should trade at a premium to the group.

The company posted year-over-year billings growth way above estimates and has seen operating margins expand by 1.7% The company’s growing portfolio of enterprise-class solutions have not only enhanced the brand, but are helping to achieve access into bigger companies.

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Wall Street analysts see continued substantial billings growth and many have already raised their fiscal 2016 estimates on both revenues and earnings. Importantly, the company’s new analytics products are factored into many 2016 estimates and could provide upside. Many also think that the company’s growth guidance could be conservative as well. Lastly, Salesforce is constantly a part of Wall Street takeover chatter, and that tends to keep short sellers at a distance.

The Oppenheimer price target for the stock is $90, and the Thomson/First Call consensus target price is $81.44. The stock closed Friday at $78.77.
Callidus Software

This company could be somewhat of a hidden gem for investors. California-based Callidus Software Inc. (NASDAQ: CALD) is the self-described global leader in cloud-based sales, marketing, learning and customer experience solutions. Callidus Cloud’s Litmos mobile learning platform is the learning management system that people love to use. Litmos makes it easy for teachers and trainers to build courses, assign them to learners and accurately track the results.

Sunrun, the largest dedicated residential solar company in the United States, recently chose the Callidus Cloud division to automate the compensation process for paying its sales force. This is another company that the Oppenheimer analysts target as having the potential for an upward earnings revision.

While the Oppenheimer price target is $25, the consensus target is $20.89. The shares closed on Friday at $17.39.

Ellie Mae

This company may sound like a character from the Beverly Hillbillies, but Ellie Mae Inc. (NYSE: ELLI) is actually the leader in providing on-demand software solutions and services for the residential mortgage industry in the United States. Its mortgage management solutions streamline and automate the process of originating and funding new mortgage loans, facilitating regulatory compliance and reducing documentation errors. With the growth in the mortgage industry continuing a slow, but sure rebound, the demand for the company’s products have soared as lenders and originators cope with new rules and regulations.

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The company announced last week that it had signed a definitive agreement to acquire Mortgage Returns, a leader in on-demand customer relationship management (CRM) and marketing automation solutions for the mortgage industry. Bolt-on acquisitions like this continue to help the company compliment organic growth.

The Oppenheimer price target is set at $85, and the consensus target is lower at $82. The stock closed on Friday at $67.

Ultimate Software

This stock is owned by 41.2% of the top funds on Wall Street in a recent survey. Ultimate Software Group Inc. (NASDAQ: ULTI) is a leading provider of cloud-based human capital management (HCM) solutions, with more than 20 million people records in the cloud. Ultimate’s award-winning UltiPro delivers HR, payroll, talent and time and labor management solutions that connect people with the information they need to work more effectively.

The demand for predictive analytics in the area of HCM is rapidly increasing, as businesses are seeing the value of big data and data modeling across many areas of the business, such as expense management and inventory management. While the market cap of the stock barely stays in the small-cap range at $5.24 billion, the shares have had a solid year and the recent pullback gives investors a better entry point.

The $205 Oppenheimer price target is well above the consensus price objective of $194.61. The stock closed on Friday at $192.31.

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The Oppenheimer team has a solid list of companies that could not only match or beat earnings estimates for the third quarter, but they could move forward estimates higher, which could be a very bullish sign.

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