Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

Our 80,000 qualified print subscribers—and 130,000 12-month engaged online audience—trust us to dive in and provide original journalism you won’t find elsewhere covering key emerging areas such as laser-driven inertial confinement fusion, lasers in space, integrated photonics, chipscale lasers, LiDAR, metasurfaces, high-energy laser weaponry, photonic crystals, and quantum computing/sensors/communications. We cover the innovations driving these markets.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Software Stocks Skating on Thin Ice

ZM Cover Image

Software is rapidly reducing operating expenses for businesses. In the past, the undeniable tailwinds fueling SaaS companies led to lofty valuation multiples that made it easier to raise capital. But this was a double-edged sword as the high prices exposed them to big drawdowns, and unfortunately, the industry has tumbled by 7.3% over the last six months. This drop was worse than the S&P 500’s 4.7% fall.

Investors should tread carefully as only some businesses are worthy of their valuations because AI and competition will commoditize many products. Keeping that in mind, here are three software stocks we’re steering clear of.

Zoom (ZM)

Market Cap: $23.88 billion

Started by Eric Yuan who once ran engineering for Cisco’s video conferencing business, Zoom (NASDAQ: ZM) offers an easy to use, cloud-based platform for video conferencing, audio conferencing and screen sharing.

Why Are We Cautious About ZM?

  1. Average ARR growth of 3.1% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
  2. Estimated sales growth of 2.5% for the next 12 months implies demand will slow from its three-year trend
  3. Projected 5 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position

Zoom is trading at $78.21 per share, or 5.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ZM.

8x8 (EGHT)

Market Cap: $235.7 million

Founded in 1987, 8x8 (NYSE: EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.

Why Should You Dump EGHT?

  1. Billings have dropped by 2.1% over the last year, suggesting it might have to lower prices to stimulate growth
  2. Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
  3. Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions

At $1.87 per share, 8x8 trades at 0.3x forward price-to-sales. Check out our free in-depth research report to learn more about why EGHT doesn’t pass our bar.

Agilysys (AGYS)

Market Cap: $2.11 billion

Originally a subsidiary of Pioneer-Standard Electronics that distributed electronic components, Agilysys (NASDAQ: AGYS) offers a software-as-service platform that helps hotels, resorts, restaurants, and other hospitality businesses manage their operations and workflows.

Why Are We Hesitant About AGYS?

  1. High servicing costs result in a relatively inferior gross margin of 62.7% that must be offset through increased usage
  2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 4.6 percentage points

Agilysys’s stock price of $76.03 implies a valuation ratio of 7.1x forward price-to-sales. Read our free research report to see why you should think twice about including AGYS in your portfolio.

Stocks That Overcame Trump’s 2018 Tariffs

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 9 Market-Beating Stocks. 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 United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.

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