From commerce to culture, software is digitizing every aspect of our lives. The undeniable tailwinds fueling the industry have also led to strong returns for SaaS stocks lately as they’ve gained 7% over the past six months, outpacing the S&P 500’s 1% rise.
Nevertheless, investors should tread carefully as AI will commoditize many software products, and backing the wrong horse could result in hefty losses. Keeping that in mind, here are three software stocks that may face trouble.
Market Cap: $12.65 billion
Founded in 1999 by two engineers from MIT, Akamai (NASDAQ:AKAM) provides software for organizations to efficiently deliver web content to their customers.
Why Do We Pass on AKAM?
Akamai’s stock price of $84.15 implies a valuation ratio of 3.1x forward price-to-sales. If you’re considering AKAM for your portfolio, see our FREE research report to learn more.
Market Cap: $992.8 million
Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.
Why Are We Hesitant About OLO?
At $5.83 per share, Olo trades at 2.9x forward price-to-sales. Dive into our free research report to see why there are better opportunities than OLO.
Market Cap: $73.82 million
Founder Jack McDonald’s second software rollup, Upland Software (NASDAQ:UPLD) is a one stop shop for sales and marketing software, project management, HR, and contact center services for small and medium sized businesses.
Why Does UPLD Worry Us?
Upland is trading at $2.67 per share, or 0.3x forward price-to-sales. Read our free research report to see why you should think twice about including UPLD in your portfolio, it’s free.
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound by checking out 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.