Software is eating the world, and virtually no business is left untouched by it. Companies bringing it to life have been rewarded with high valuation multiples that make fundraising easier, but they have capped returns lately as the industry’s six-month gain of 21.1% has trailed the S&P 500’s 24.7%.
However, some businesses can support their premium valuations with superior earnings growth, and our mission at StockStory is to help you find them. With that said, here is one software stock boasting a durable advantage and two best left ignored.
Two Software Stocks to Sell:
Jamf (JAMF)
Market Cap: $1.38 billion
With its name playfully derived from "Just Another Management Framework," Jamf (NASDAQ: JAMF) provides software that helps organizations deploy, manage, and secure Apple devices across their workforce while maintaining a seamless user experience.
Why Are We Cautious About JAMF?
- Underwhelming ARR growth of 11.1% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Estimated sales growth of 10.3% for the next 12 months implies demand will slow from its two-year trend
- Poor expense management has led to operating margin losses
At $10.39 per share, Jamf trades at 1.9x forward price-to-sales. Dive into our free research report to see why there are better opportunities than JAMF.
Bentley Systems (BSY)
Market Cap: $17.6 billion
Pioneering the concept of "digital twins" for infrastructure projects long before it became an industry buzzword, Bentley Systems (NASDAQ: BSY) provides software solutions that help engineers design, build, and operate infrastructure projects across sectors including roads, bridges, utilities, mining, and industrial facilities.
Why Do We Think Twice About BSY?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 11.3% underwhelmed
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 9.9%
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
Bentley Systems is trading at $56.20 per share, or 11.9x forward price-to-sales. Check out our free in-depth research report to learn more about why BSY doesn’t pass our bar.
One Software Stock to Watch:
Atlassian (TEAM)
Market Cap: $39.63 billion
Started by two Australian university friends who funded their startup with credit cards, Atlassian (NASDAQ: TEAM) provides software tools that help teams plan, track, collaborate, and share knowledge across organizations.
Why Are We Positive On TEAM?
- Impressive 21.5% annual revenue growth over the last two years indicates it’s winning market share
- Software is difficult to replicate at scale and leads to a stellar gross margin of 82.8%
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
Atlassian’s stock price of $151.55 implies a valuation ratio of 6.4x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-small-cap company Comfort Systems (+782% 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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