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 47.6% over the past six months, outpacing the S&P 500’s 12.3% rise.

Although these businesses have produced results, only the best will survive over the long term as AI is eating into the profits of those with lower switching costs. Taking that into account, here is one software stock poised to generate sustainable market-beating returns and two we’re steering clear of.

Two Software Stocks to Sell:

Commvault (CVLT)

Market Cap: $5.65 billion

Born from the need to create ironclad protection in an increasingly dangerous digital world, Commvault (NASDAQ: CVLT) provides data protection and cyber resilience software that helps organizations secure, back up, and recover their data across on-premises, hybrid, and multi-cloud environments.

Why Is CVLT Not Exciting?

1. Average billings growth of 12.2% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
2. Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
3. Efficiency fell over the last year as its operating margin declined by 1.5 percentage points because it pursued growth instead of profits

Commvault’s stock price of $136.32 implies a valuation ratio of 4.4x forward price-to-sales. If you’re considering CVLT for your portfolio, see our FREE research report to learn more.

Oracle (ORCL)

Market Cap: $434.5 billion

Starting as a database company in 1977 and now powering mission-critical systems across the globe, Oracle (NYSE: ORCL) provides enterprise software and hardware products and services that help businesses manage their information technology needs.

Why Do We Think Twice About ORCL?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 10.7% for the last five years
2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 19.1 percentage points
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $150.96 per share, Oracle trades at 5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ORCL.

One Software Stock to Watch:

Asure Software (ASUR)

Market Cap: $261.9 million

Operating in the often-overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ: ASUR) provides cloud-based human capital management software and services that help small and medium-sized businesses manage payroll, taxes, time tracking, and HR compliance.

Why Could ASUR Be a Winner?

1. Products and services have many advocates, as seen in its respectable 16.1% annual sales growth over the last two years
2. Billings have averaged 26.2% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
3. Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale

Asure Software is trading at $9.08 per share, or 1.5x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.