3 Software Stocks to Keep an Eye On

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3 days ago

From commerce to culture, software is digitizing every aspect of our lives. This secular theme makes SaaS companies attractive investment candidates but also comes with higher valuations that cause volatility. Unfortunately, the rich prices have haunted them over the past six months as the industry has shed 2.3%. This performance was discouraging since the S&P 500 returned 5%.
However, some businesses can support their premium valuations with superior earnings growth, and our mission at StockStory is to help you find them. Keeping that in mind, here are three resilient software stocks at the top of our wish list.
Market Cap: $73.9 billion
Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE:SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.
Why Do We Like SNOW?
Billings have averaged 26.5% growth over the last year, showing it's securing new contracts that could potentially increase in value over time
High switching costs and customer loyalty are evident in its net revenue retention rate of 126%
Expected revenue growth of 24.4% for the next year suggests its market share will rise
Snowflake is trading at $221.49 per share, or 15.4x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it's free.
Market Cap: $1.36 billion
Started by Oleg Shchegolev while still in university, Semrush (NYSE:SEMR) is a software-as-a-service platform that helps companies optimize their search engine and content marketing efforts.
Why Are We Fans of SEMR?
Winning new contracts that can potentially increase in value as its billings growth has averaged 24.8% over the last year
Projected revenue growth of 18.7% for the next 12 months suggests its momentum from the last three years will persist
Prominent and differentiated software results in a premier gross margin of 82.1%
Semrush's stock price of $9.15 implies a valuation ratio of 2.9x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it's free.
Market Cap: $4.48 billion
Founded in Chennai, India in 2010 with the idea of creating a 'fresh' helpdesk product, Freshworks (NASDAQ: FRSH) offers a broad range of software targeted at small and medium-sized businesses.
Why Are We Positive On FRSH?
Ability to secure long-term commitments with customers is evident in its 19.7% ARR growth over the last year
Superior software functionality and low servicing costs result in a stellar gross margin of 84.4%
Operating margin expanded by 9.2 percentage points over the last year as it scaled and became more efficient
At $15.40 per share, Freshworks trades at 5.4x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it's free.
Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today