Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Software industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.
Why Focus on Undervalued Software Stocks?
Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.
AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.
What Goes Into AAII’s Value Grade?
Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.
AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.
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7 Undervalued Software Stocks
Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Software industry for Wednesday, November 06, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Software industry median.
| Company | Ticker | Price/Sales | Price/Earnings | EV/EBITDA | Shareholder Yield | Price/Book Value | Price/Free Cash Flow | Value Grade |
| Airship AI Holdings, Inc. | AISP | 2.07 | 5.8 | na | (1.8%) | na | na | B |
| Iveda Solutions, Inc. | IVDA | 0.79 | na | na | (1.9%) | 0.53 | na | B |
| Oblong, Inc. | OBLG | 0.39 | na | 0.7 | (819.8%) | 0.40 | na | B |
| Porch Group, Inc. | PRCH | 0.44 | na | na | (3.6%) | na | 8.1 | B |
| Urgent.ly Inc. | ULY | 0.02 | na | 34.7 | 0.0% | 0.82 | na | B |
| VirnetX Holding Corporation | VHC | na | na | 1.0 | (0.6%) | 0.40 | na | A |
| Xunlei Limited | XNET | 0.39 | 8.7 | na | 1.7% | 0.38 | na | A |
The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.
The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)
Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).
As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.
Airship AI Holdings, Inc.’s Value Grade
Value Grade:
| Metric | Score | AISP | Industry Median |
| Price/Sales | 52 | 2.07 | 3.91 |
| Price/Earnings | 6 | 5.8 | 41.2 |
| EV/EBITDA | na | na | 23.8 |
| Shareholder Yield | 65 | (1.8%) | (2.6%) |
| Price/Book Value | na | na | 3.52 |
| Price/Free Cash Flow | na | na | 32.9 |
Airship AI Holdings, Inc. provides artificial intelligence (AI)-driven video, sensor, and data management surveillance platform in the United States. The company offers Outpost AI, an edge-based device for video and metadata recording; Airship Command, a suite of visualization tools that allows customers to interact with their data and devices; and Acropolis, an enterprise management software. It serves government, public sector, law enforcement, military, and commercial enterprise organizations. The company is headquartered in Redmond, Washington.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
Airship AI Holdings, Inc. has a Value Score of 62, which is considered to be undervalued.
When you look at Airship AI Holdings, Inc.’s price-to-sales ratio at 2.07 compared to the industry median at 3.91, this company has a lower price relative to revenue compared to its peers. This could make Airship AI Holdings, Inc.’s stock more attractive for value investors.
Airship AI Holdings, Inc.’s price-earnings ratio is 5.80 compared to the industry median at 41.20. This means it has a lower share price relative to earnings compared to its peers. This could make Airship AI Holdings, Inc. more attractive for value investors.
Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Airship AI Holdings, Inc.’s shareholder yield is higher than its industry median ratio of (2.60%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.
Iveda Solutions, Inc.’s Value Grade
Value Grade:
| Metric | Score | IVDA | Industry Median |
| Price/Sales | 27 | 0.79 | 3.91 |
| Price/Earnings | na | na | 41.2 |
| EV/EBITDA | na | na | 23.8 |
| Shareholder Yield | 65 | (1.9%) | (2.6%) |
| Price/Book Value | 15 | 0.53 | 3.52 |
| Price/Free Cash Flow | na | na | 32.9 |
Iveda Solutions, Inc. provides artificial intelligence (AI) and digital transformation technologies in the United States and Taiwan. The company offers IvedaAI, a deep-learning video analytics software and Sentir Video, a video surveillance solution for various kinds of applications. It also provides Cerebro IoT Platform, a software technology platform that integrates a multitude of disparate systems for central access and management of applications, subsystems, and devices, and IvedaSPS, a smart power solution utilizing in Cerebro IoT platform, and IvedaXpress, a system for pre-existing IP cameras and AI analytics for servers and IT department. In addition, the company offers Iveda Smart UVC, an AI vent for irradiating UV light and Iveda drone to perform certain functions from an aerial view. Further, it offers Utilus smart pole solution that consists of power and Internet with a communication network for the access and management of sensors and devices, as well as provides utility cabin, IoT sensors and devices and LAN switch products. The company serves airports, commercial buildings, government customers, data centers, shopping centers, hotels, banks, and safe city projects. Iveda Solutions, Inc. was founded in 2003 and is based in Mesa, Arizona.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
Iveda Solutions, Inc. has a Value Score of 72, which is considered to be undervalued.
Iveda Solutions, Inc.’s price-to-book ratio is higher than its peers. This could make Iveda Solutions, Inc. less attractive for value investors when compared to the industry median at 3.52.
You can read more about Iveda Solutions, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.
Oblong, Inc.’s Value Grade
Value Grade:
| Metric | Score | OBLG | Industry Median |
| Price/Sales | 15 | 0.39 | 3.91 |
| Price/Earnings | na | na | 41.2 |
| EV/EBITDA | 3 | 0.7 | 23.8 |
| Shareholder Yield | 100 | (819.8%) | (2.6%) |
| Price/Book Value | 11 | 0.40 | 3.52 |
| Price/Free Cash Flow | na | na | 32.9 |
Oblong, Inc., together with its subsidiaries, provides multi-stream collaboration technologies and managed services for video collaboration and network applications in the United States and internationally. The company operates in two segments, Collaboration Products and Managed Services. Its flagship product is Mezzanine that enables visual collaboration across multi-users, multi-screens, multi-devices, and multi-locations for video telepresence, laptop and application sharing, and whiteboard sharing and slides applications. The company also provides managed videoconferencing services; and remote service management, which offers an overlay to enterprise information technology and channel partner support organizations, as well as support and management services for customer video environments. In addition, it provides network solutions, including Cloud Connect: Video that allows its customers to outsource the management of their video traffic to them and provides the customer’s office locations with a secure, dedicated video network connection to the Oblong Cloud for video communications; Cloud Connect: Converge, which offers customized multiprotocol label switching solutions; and Cloud Connect: Cross Connect that allows the customer to leverage existing carrier for the extension of a Layer 2 private line to its data center. The company serves a range of industries comprising aerospace, consulting, executive search, broadcast media, legal, insurance, technology, financial services, education, healthcare, real estate, retail, construction, hospitality, and others, as well as government sector. Oblong, Inc. is based in Denver, Colorado.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
Oblong, Inc. has a Value Score of 79, which is considered to be undervalued.
Oblong, Inc.’s price-to-book ratio is higher than its peers. This could make Oblong, Inc. less attractive for value investors when compared to the industry median at 3.52.
You can read more about Oblong, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.
Porch Group, Inc.’s Value Grade
Value Grade:
| Metric | Score | PRCH | Industry Median |
| Price/Sales | 17 | 0.44 | 3.91 |
| Price/Earnings | na | na | 41.2 |
| EV/EBITDA | na | na | 23.8 |
| Shareholder Yield | 71 | (3.6%) | (2.6%) |
| Price/Book Value | na | na | 3.52 |
| Price/Free Cash Flow | 18 | 8.1 | 32.9 |
Porch Group, Inc., together with its subsidiaries, operates a vertical software and insurance platform in the United States. The company operates in two segments, Vertical Software and Insurance. The Vertical Software segment provides software and services to inspection, mortgage, and title companies on a subscription and transactional basis, as well as move and post-move services. This segment offers inspection software and services, title insurance software, mortgage software, moving services, mover and homeowner marketing, and measurement software for roofers. The Insurance segment offers consumers with insurance and warranty products to protect their homes. This segment provides property-related insurance and captive reinsurance products; and warranty products under the Porch Warranty, American Home Protect, and Residential Warranty Services brands. The company was founded in 2011 and is headquartered in Seattle, Washington.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
Porch Group, Inc. has a Value Score of 73, which is considered to be undervalued.
You can read more about Porch Group, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.
Urgent.ly Inc.’s Value Grade
Value Grade:
| Metric | Score | ULY | Industry Median |
| Price/Sales | 0 | 0.02 | 3.91 |
| Price/Earnings | na | na | 41.2 |
| EV/EBITDA | 90 | 34.7 | 23.8 |
| Shareholder Yield | 49 | 0.0% | (2.6%) |
| Price/Book Value | 24 | 0.82 | 3.52 |
| Price/Free Cash Flow | na | na | 32.9 |
Urgent.ly Inc. offers mobility assistance software platform for roadside assistance in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Its services include car lockout, tire changes, towing, stuck in ditch and winch services, motorcycle towing, electric vehicle towing, jump start, and gas delivery. The company's software platform combines location-based services, real-time data, AI and machine-to-machine communication to provide roadside assistance solutions. It serves automotive, insurance, telematics, and other transportation-focused verticals. Urgent.ly Inc. was incorporated in 2013 and is headquartered in Vienna, Virginia.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
Urgent.ly Inc. has a Value Score of 62, which is considered to be undervalued.
Urgent.ly Inc.’s price-to-book ratio is higher than its peers. This could make Urgent.ly Inc. less attractive for value investors when compared to the industry median at 3.52.
You can read more about Urgent.ly Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.
VirnetX Holding Corporation’s Value Grade
Value Grade:
| Metric | Score | VHC | Industry Median |
| Price/Sales | na | na | 3.91 |
| Price/Earnings | na | na | 41.2 |
| EV/EBITDA | 4 | 1.0 | 23.8 |
| Shareholder Yield | 55 | (0.6%) | (2.6%) |
| Price/Book Value | 11 | 0.40 | 3.52 |
| Price/Free Cash Flow | na | na | 32.9 |
VirnetX Holding Corporation, through its subsidiary VirnetX, Inc., operates as an Internet security software and technology company primarily in the United States. The company develops software and technology solutions, including secure domain name registry and GABRIEL Connection Technology that are designed to secure communications over the Internet using zero trust network access. It also offers a portfolio of licenses and services, such as VirnetX One, a security-as-a-service platform that protects enterprise applications, services, and infrastructure from cyber-attacks; GABRIEL Connection Technology software development kit to assist with rapid integration of its techniques into existing software implementations; War Room software that offers safe and secure video conferencing meeting environment where sensitive communications and data is invisible to those not authorized to view it; and VirnetX Matrix that provides security for internet-enabled enterprise applications and their connected devices. In addition, the company provides GABRIEL Collaboration Suite that enables seamless and secure cross-platform communications between users’ devices. It serves domain infrastructure and communication service providers, and system integrators; and enterprise customers, developers, and original equipment manufacturers of chips, servers, desktops, smart phones, tablets, laptops, net books, and other devices in the IP-telephony, mobility, fixed-mobile convergence, and unified communications markets. The company has a partnership with ObjectSecurity LLC to provide secure cyber vulnerability analysis in private cloud environments. VirnetX Holding Corporation was incorporated in 2005 and is headquartered in Zephyr Cove, Nevada.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
VirnetX Holding Corporation has a Value Score of 93, which is considered to be undervalued.
VirnetX Holding Corporation’s price-to-book ratio is higher than its peers. This could make VirnetX Holding Corporation less attractive for value investors when compared to the industry median at 3.52.
You can read more about VirnetX Holding Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.
Xunlei Limited’s Value Grade
Value Grade:
| Metric | Score | XNET | Industry Median |
| Price/Sales | 15 | 0.39 | 3.91 |
| Price/Earnings | 14 | 8.7 | 41.2 |
| EV/EBITDA | na | na | 23.8 |
| Shareholder Yield | 33 | 1.7% | (2.6%) |
| Price/Book Value | 10 | 0.38 | 3.52 |
| Price/Free Cash Flow | na | na | 32.9 |
Xunlei Limited, together with its subsidiaries, operates an internet platform for digital media content in the People's Republic of China. Its platform is based on cloud technology that enables users to access, store, manage, and consume digital media content. The company offers Xunlei Accelerator, which enables users to accelerate digital transmission over the internet; mobile acceleration plug-in, which provides mobile device users with benefits of download speed acceleration and download success rate improvements; and subscription services that offer users premium services through Green Channel and Fast Bird products. It also provides Mobile Xunlei, a mobile application that allows users to search, download, consume, and store digital media content; Xunlei Media Player, which supports online and offline play of digital media content, as well as simultaneous play of digital media content while it is being transmitted by Xunlei Accelerator; online games through online game website and mobile app; advertising services; live streaming products, including video and audio livestreaming; and develops software and computer software, as well as other internet value-added services. In addition, the company offers cloud computing services through OneThing Cloud, and StellarCloud; and hardware for edging computing, such as OneThing Edge Cube, and OneThing Edge Atom. Further it offers ThunderChain, a blockchain infrastructure product that enables its users to develop and manage blockchain applications. The company was formerly known as Giganology Limited and changed its name to Xunlei Limited in January 2011. Xunlei Limited was founded in 2003 and is headquartered in Shenzhen, the People's Republic of China.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
Xunlei Limited has a Value Score of 97, which is considered to be undervalued.
Xunlei Limited’s price-earnings ratio is 8.7 compared to the industry median at 41.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Xunlei Limited more attractive for value investors.
Xunlei Limited’s price-to-book ratio is higher than its peers. This could make Xunlei Limited less attractive for value investors when compared to the industry median at 3.52.
You can read more about Xunlei Limited’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.
Other Software Stock Grades
Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.
Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Software stocks as well as other industrys.
Choosing Which of the 7 Best Software Stocks Is Right for You
Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.
- Airship AI Holdings, Inc. stock has a Value Grade of B.
- Iveda Solutions, Inc. stock has a Value Grade of B.
- Oblong, Inc. stock has a Value Grade of B.
- Porch Group, Inc. stock has a Value Grade of B.
- Urgent.ly Inc. stock has a Value Grade of B.
- VirnetX Holding Corporation stock has a Value Grade of A.
- Xunlei Limited stock has a Value Grade of A.
Now that you have a bit more background about each of the 7 undervalued stocks in the Software industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.
We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.
A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.
Additional Resources About Software Stocks
Want to learn more about Software stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.
- 7 Undervalued Software Stocks for Wednesday, November 06
- 3 Undervalued Software Stocks for Tuesday, November 05
- 6 Undervalued Software Stocks for Monday, November 04
- 5 Undervalued Software Stocks for Friday, November 01
AAII Disclaimer
We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.
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