I Ranked 100 SaaS Stocks To See Who'd SURVIVE

Software stocks had provided some of the best gains for investors over the past few decades. Then out of nowhere came this false narrative that AI was going to put them all out of business. The whole group got clobbered, including giants like Microsoft, Oracle, and Salesforce. Gladly investors are starting to come to their senses, leaving us with a great buy the dip opportunity in the top software names. Now, that's why I screened over 100 software companies to find the most attractive ones. According to our quant model, only a handful made the grade, and none of them are the usual household names. So, in this video, I'll expose the inconvenient truth about some of the biggest software stocks, then reveal four overlooked companies with serious potential to outperform. And by the way, I'm Steve Raymeister, but all my friends call me Righty. I'm a partner at Wall Street Zen, where our quant rating system analyzes a wide array of data points to unear the best opportunities to top the market. So, if you like this kind of uh stock breakdown, then do me a quick favor and hit that like button. It tells YouTube to push more videos like this to you in the future. Now, let me tell you how I structured this experiment. Now, I ran over 100 of the biggest names in software space through our Zen ratings quant model, which evaluates every stock across 115 different factors. Now, the rating is then expressed as an intuitive letter grade A to F. That overall rating is supported by seven underlying component grades to reveal the unique strengths and weaknesses of each stock like areas like growth, value, momentum, sentiment, and more. Only a few stocks pass the grade, and most of them are names you probably never heard of, like Ring Central with a simple of RNG. Don't worry, I'll discuss that stock and more in a minute. But first, some bad news about some of the most popular software stocks out there, the ones that you might be thinking about buying on the dip. And let me remind you that while I'm talking about real stocks and data here, I'm not telling you exactly what to buy and sell. All investments decisions are yours and yours alone. So make sure that you do your proper due diligence. All right, let's start with the cyber security darling of Crowd Strike, symbol of CRWD. Everyone seems to love this one. Our system, well, not so much. It comes in with an overall zen rating of C. That C rating is equivalent to a whole recommendation. It's not bad, but it's not certainly not good, and it's not a reason to buy shares. As I often say, C rating means see you later, right? Because these stocks typically underperform the market. The component grades underneath that tell exactly why. It's value grade scores in the bottom 10% of all stocks, meaning you are seriously overpaying for these shares and its sentiment lands in the bottom 23%. Which tells you the smart money is mostly sitting this one out. Is it a good company? Sure, it is. But it's simply not a good investment at this time. And the same story goes for uh cloud computing favorite Snowflake. Another overall C and and that also means see you later. It's uh value really stinks up the joint in the bottom 12%. You are really paying through the nose for these shares. Uh and its safety score sits in the bottom 29%. On top of the rich price, it's too bumpy of a ride, too volatile. Sure, the stock is loved by the crowd, but unfortunately it's mistrusted by the math. And these aren't the only two names we're talking about. Adobe Palanteer. they also land in the C-rated pile. The point is simple. Being famous and being a good stock to buy are two very different things. If you already own these C-rated stocks, then consider selling to shift into stocks that have a greater odds future outperformance, preferably our A-rated shares that have enjoyed a nearly 3:1 advantage over the S&P 500 going back over 20 years. I'm about to share some of those stocks with you right now. Let's start with the stock I referenced earlier, Ring Central, the symbol of RNG. The company runs cloud communications for businesses. We're talking about phone, video messaging, all that stuff. And it's all done over the internet. Now, for years, the market treated it like dead man walking, convinced that AI chat bots and dozen competitors would make them obsolete. The stock got beaten down and nearly left for dead. But take a look at the actual business because it doesn't look like a company that's dying. Ring Central's earnings are forecast to grow by more than 86% a year going forward. Far, far ahead of the market average. Now, for a company everyone's rode off, they are actually showing some serious signs of earnings momentum. And they're doing it while throwing off a lot of cash and using it to buy back their own stock hand over fist. That is a great sign of management confidence in more growth and share price upside ahead. Gladly, there are some Ring Central fans uh on Wall Street with some top ranked analysts printing buy and strong buy recommendations, each expecting ample upside to fair value price targets. Now, I want to draw your attention to one important metric here. Ring's PEG ratio stands at 0.5, which just screams undervalued relative to its growth prospects. Remember, the average stock has a PEG of 1.5, meaning it would need to triple in price to have the average stock valuation. That's a far cry from the overpriced software names we discussed like Crowd Strike and Snowflake. So, what does our quant model say? So, Ring Centrals earns a Zen rating of A. That's a strong buy recommendation. Even more impressive is that it's in the top 1% of all stocks we analyze based upon its super impressive fundamental profile. Now let's drill down into those component grades that shape that overall rating. Safety comes in strong in the top 8% of all stocks. Uh growth is even better the top 4%. This is based upon a review of 22 different growth factors. Then we have financials and value both in the top 1% which is truly special. Combining strong growth and value is impressive enough, but when you layer safety on top, it becomes a very compelling opportunity. By the way, if you want exposure to more top stocks like this, then I highly recommend you attend my live training session this coming Monday at 7 p.m. Eastern time. There I go deeper on exactly this kind of stock setup. The event is free, but you do need to register. Do that now at wall streetzen.com/live. Let's keep the party moving because the next one didn't just survive AI, it actually feeds on it. That brings us to Riskified with a symbol of RSKD. They run an AI powered fraud prevention platform for e-commerce. Now, when you buy something online, riskified is an engine deciding in real time whether that order is legit or a scammer. And they doing with such confidence given their machine learning models that they guarantee it. Meaning if they approve an order that turns out later to be fraud, riskified eats the lost, not the merchant. Now, think about what AI is doing to the world of online fraud. The scammers just got the most powerful tools in history. Online fraud is about to explode in volume and sophistication. And that means demand for a battle tested AI shield like Riskified only goes up. This shows up loud and clear in four straight impressive earnings beats for the company. Now my favorite part of the riskified story is that management has embarked on a massive share of buyback program like 50% of the outstanding shares. That means they are incredibly confident in the future growth and share price appreciation of the company. Now, the Zen rating seems to confirm this confidence. Once again, we have an elite A-rated stock and yet another firm in the top 1% of all stocks given its special fundamental profile. As we uh drill down to those component grades, we find that financials comes in the top 19% of all stocks. Sentiment is a lot stronger, the top 15%, meaning the smart money is already on board. Growth is excellent in the top 3%. This is the best indicator of more earnings beats on the way. But the crown jewel is the top 2% showing for artificial intelligence grade. Now, quick note on that. It's not about whether the company uses AI. It's our system using AI to flag price patterns that tend to show up before a stock outperforms. So, the combination of all this is a beautiful thing. You've got an AI native business with top 3% growth and top 2% for our AI timeliness signal. All for a company right at the heart of the thriving growth for e-commerce fraud protection. For all these reasons and more, I added Riskifi to my Zen Investor newsletter portfolio. This is where I feature my top 20 stocks for the long haul. Indeed, Riskified makes the grade. Quick ask before we move on. If you're getting value out of this stock analysis, then take a second to hit subscribe and click the notification bell. That's because I publish datadriven stock analysis like this every single week. I'd hate for you to miss the next one. Say hello to VTEX with a symbol of VTEX. If you've never heard of them, well, that's kind of the point because I'm pointing out here a real hidden gem. VTEX is a digital commerce platform. Think of them as the engine that powers online stores and marketplaces for many big enterprise brands. They have a growing global footprint with Latin America being their current stronghold. And while nobody was paying attention, this company quietly turned early losses into fresh profitability. And they have been hitting the growth accelerator ever since. It now runs a generally healthy operation with elite software gross margins north of 78%. Its top line is growing nicely, but the real story here is the bottom line. Right now, forecast call for 50% annual earnings growth over the next few years. This is more than three times faster than the average public company. Now, VTEX is a company starting to hit its full stride. So, let's see what our quant ratings model has to say about all that. Once again, we have an A-rated stock in the top 1% of all 4600 stocks we review in our database. Looking into those component grades, we find safety lands in the top 24%. That AI timeliness grade in the top 23%, financial strength steps that up a notch to top 13% and growth is strongest still in the top 11% of all stocks. The headline dealer here is sentiment, which sits in the top 1% of all stocks track. Here's why sentiment grade matters so much. Sentiment tracks what the smart money is. The uh earnings estimate revisions, the analyst upgrades, the institutional money flows, and insider buying. At top 1% sentiment score means the professionals are quietly leaning in on a stock most retail investors have still never heard of. Pair that with a strong growth grade and you've got a profile of a stock likely to outperform in the months and years ahead. By the way, I should mention that the Zen ratings are updated daily. So, if you want the latest ratings on this or any stock, then simply go to wall streetzen.com and enter your desired ticker in the search bar. Not a bad idea to bookmark the site for future visits. Back to VTEC. The honest risk here is that a lot of the business runs through Latin American markets, and that can bring some currency and regional economic bumpiness along for the ride. But the flip side is a profitable, fast growing company that the market is not paying attention to. Remember, the smart money is already leaning in with VTEX. Maybe you should be too. Before we get to that final pick, one quick reminder. The best way to stay one step ahead of the market is to join me live every Monday at 7 p.m. Eastern time. That is when I share my updated market outlook and trading plan to outperform. It's also when I unveil my trade of the week based upon that proven Zen ratings quant and my greater than 40 years of investing experience. It's a free event, but you do need to register. Just go to wall streetzen.com/live or click the link in the description or scan the QR code on your screen. Just pause the video for a minute. I can wait for you and then I look forward to seeing you on Monday. On with our list of the best software stocks. Here's the most impressive fact about our next pick. Out of the 129 software companies in this industry, this stock is ranked number one. That company is 5'9 with a symbol of FIVN. They run the AI powered software behind the modern call center, the cloud platform that routes calls, powers the chat bots, and increasingly AI agents handle customer service conversations directly. And this is the great irony of the whole AI is going to kill software panic. Everyone assumed AI would gut the call center software business in 59 right along with it. Instead, 59 leaned heavily into AI to make their customer service platform even better and yes, more profit. It shows up clearly in the expected 80% earnings growth this coming year. Beyond the growth, the value part is actually the most impressive. That's because 59 trades at a PEG ratio of roughly 0.44. Again, remember that the average stock has a PEG ratio of 1.5. So, anything below that is considered value and thus 0.44 for this stock is simply dirt cheap for a business growing this strongly. Okay. Some of Wall Street's sharpest minds are already on board. Right now, uh they enjoy six strong buy and four buy recommendations from the street. Even better than the slew of recommendations as the impressive fair value price targets right now. The street high target calls for about 60% upside potential in the year ahead and our data backs up that bullish view. Once again, Zen rating of A uh in the top 1% of all stocks for this impressive uh fundamental profile. The attractiveness of these shares comes into fuller view as we examine the component grades. Financials come in the top 7% of all stocks. value even better in the top 3% not just based upon that PEG ratio but a full 21 different measures of value lead to that score and growth is right up there in the top 3% as well. The benefit of this grade is that it foreshadows more earnings beats ahead. The main caveat is the shares have been uh choppy but really that is the case for many software stocks this year. All in all, you've got a generally profitable and generally cheap company that our model ranks as the single best name in the software industry. When the best-in-class stock is also one of the cheapest, it's wise to pay attention. So, let's bring it home. Out of over 100 software stocks, it turns out many of the most popular stocks are not really that attractive this time. As it turns out, the best opportunities were the names hardly anyone's talking about, what you would call hidden gems. Remember, the Zen ratings are updated every single day. So, you can pull a free rating on just about any stock just by typing the ticker in at wall streetzen.com. Do yourself a favor and bookmark the site now for frequent future visits. Okay, let's hear from you. Which of these stocks is your favorite and which uh software names did I leave out that you think deserve a deeper look? Drop it all in the comment section below and let's compare notes. And if you want to continue your search for great tech stocks, be sure to check out my recent video about four stocks I believe could be you big winners in the next phase of the AI boom.