3 Software Stocks Walking a Fine Line

June 18, 2025 at 00:30 AM EDT

ASAN Cover Image

From commerce to culture, software is digitizing every aspect of our lives. Companies bringing it to life have been rewarded with high valuation multiples that make fundraising easier, but they have weighed on the returns lately as the industry has pulled back by 6.7% over the past six months. This drop was disappointing since the S&P 500 climbed 1.7%.

While some can support their premium valuations with superior earnings growth, the odds aren’t great for the businesses we’re analyzing today. Keeping that in mind, here are three software stocks best left ignored.

Asana (ASAN)

Market Cap: $3.14 billion

Founded in 2008 by Facebook’s co-founder Dustin Moskovitz, Asana (NYSE: ASAN) is a cloud-based project management software, where you can plan and assign tasks to employees and monitor and discuss progress of work.

Why Are We Wary of ASAN?

Products, pricing, or go-to-market strategy may need some adjustments as its 4.3% average billings growth over the last year was weak
Net revenue retention rate of 96.3% shows it has a tough time retaining customers
Prolonged sales cycles signal certain parts of its software must be customized for its large enterprise clients, impeding customer growth

At $13.35 per share, Asana trades at 3.9x forward price-to-sales. To fully understand why you should be careful with ASAN, check out our full research report (it’s free).

Couchbase (BASE)

Market Cap: $1.06 billion

Formed in 2011 with the merger of Membase and CouchOne, Couchbase (NASDAQ: BASE) is a database-as-a-service platform that allows enterprises to store large volumes of semi-structured data.

Why Is BASE Not Exciting?

Offerings struggled to generate meaningful interest as its average billings growth of 6.6% over the last year did not impress
Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
Cash burn makes us question whether it can achieve sustainable long-term growth

Couchbase’s stock price of $19.99 implies a valuation ratio of 4.4x forward price-to-sales. Read our free research report to see why you should think twice about including BASE in your portfolio.

Upland (UPLD)

Market Cap: $50.99 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 Do We Pass on UPLD?

Sales tumbled by 4.4% annually over the last three years, showing industry trends like AI are working against its favor
Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low

Upland is trading at $1.75 per share, or 0.2x forward price-to-sales. Check out our free in-depth research report to learn more about why UPLD doesn’t pass our bar.

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3 Software Stocks Walking a Fine Line

Asana (ASAN)

Couchbase (BASE)

Upland (UPLD)

High-Quality Stocks for All Market Conditions

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