Software is eating the world, and virtually no business is left untouched by it. This secular theme makes SaaS companies attractive investment candidates but also comes with higher valuations that make re-ratings harder. Unfortunately, the rich prices have held them back over the past six months as the industry’s gain of 11.2% has fallen short of the S&P 500’s 21% rise.
Investors should tread carefully as only some businesses are worthy of their valuations, and luckily for you, we started StockStory to help you find them. Keeping that in mind, here are three software stocks boasting durable advantages.
Intuit (INTU)
Market Cap: $186.1 billion
Originally named after its founding product "Intuitive for the first-time user," Intuit (NASDAQ: INTU) provides financial management software and services including TurboTax, QuickBooks, Credit Karma, and Mailchimp to help consumers and small businesses manage their finances.
Why Do We Like INTU?
- Billings growth has averaged 17.5% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Healthy operating margin of 26.1% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last year
Intuit is trading at $667.48 per share, or 8.9x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Datadog (DDOG)
Market Cap: $56.78 billion
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Are We Backing DDOG?
- Ability to secure long-term commitments with customers is evident in its 26% ARR growth over the last year
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Strong free cash flow margin of 28.3% enables it to reinvest or return capital consistently
At $163.44 per share, Datadog trades at 16.1x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Braze (BRZE)
Market Cap: $3.19 billion
With its technology powering interactions with 6.2 billion monthly active users across the digital landscape, Braze (NASDAQ: BRZE) provides a platform that helps brands build and maintain direct relationships with their customers through personalized, cross-channel messaging and engagement.
Why Could BRZE Be a Winner?
- Billings growth has averaged 24.4% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Net revenue retention rate of 110% shows the company enjoys some degree of customer loyalty
- Estimated revenue growth of 19.2% for the next 12 months implies its momentum over the last two years will continue
Braze’s stock price of $28.23 implies a valuation ratio of 3.9x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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
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