Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 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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6 Undervalued Software Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Software industry for Tuesday, August 25, 2026. Let’s take a closer look at their individual scores to see how they measure up against each other and the Software industry median.

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.

Dropbox, Inc.’s Value Grade

Value Grade:

Dropbox, Inc. provides a content collaboration platform in the United States and internationally. The company’s platform enables individuals, families, teams, and organizations to collaborate for free through its website or app, or through a paid subscription plan for premium features. Its platform consists of various elements, such as unified home for content, global sharing network, and product experiences and integrations. The company serves customers in the professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

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.

Dropbox, Inc. has a Value Score of 71, which is considered to be undervalued.

When you look at Dropbox, Inc.’s price-to-sales ratio at 3.43 compared to the industry median at 3.23, this company has a higher price relative to revenue compared to its peers. This could make Dropbox, Inc.’s stock less attractive for value investors.

Dropbox, Inc.’s price-earnings ratio is 19.30 compared to the industry median at 39.30. This means it has a lower share price relative to earnings compared to its peers. This could make Dropbox, Inc. more attractive for value investors.

Now, let’s assess Dropbox, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 12.0, when compared to the industry median of 23.5, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

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. Dropbox, Inc.’s shareholder yield is higher than its industry median ratio of (2.50%). 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.

Lastly, let’s take a look at Dropbox, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Dropbox, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 20.90. This could make Dropbox, Inc. more attractive because the lower P/FCF ratio indicates that Dropbox, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Octave Intelligence plc’s Value Grade

Value Grade:

Octave Intelligence plc provides various software solutions. Its solutions helps organizations to better understand and manage the environments in which they design, build, operate, and protect their assets, people, and critical infrastructure. Its platform connects data, events, and workflows across various environments and applies context-aware intelligence to help customers understand what is happening, what may happen next, and how actions in one area affect conditions in another. The company serves power generation and utilities, data centers and IT infrastructure operators, heavy construction and public works, industrial process industries, public safety and emergency response agencies, transportation networks and logistics operations, light process industries, and discrete manufacturing industries. It operates in the United States, Canada, and Latin America; Europe, the Middle East, India, and Africa; and the Asia Pacific region. The company was incorporated in 2017 and is based in Madison, Alabama.

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.

Octave Intelligence plc has a Value Score of 63, which is considered to be undervalued.

Octave Intelligence plc’s price-to-book ratio is higher than its peers. This could make Octave Intelligence plc less attractive for value investors when compared to the industry median at 3.33.

You can read more about Octave Intelligence plc’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.

LiveRamp Holdings, Inc.’s Value Grade

Value Grade:

LiveRamp Holdings, Inc., a technology company, operates a data collaboration platform in the United States, Europe, the Asia-Pacific, and internationally. The company operates LiveRamp Data Collaboration platform that enables an organization to unify customers and prospect data to build a single view of the customer in a way that protects consumer privacy. The company’s platform supports various people-based marketing solutions, including data collaboration, activation, measurement and analytics, identity, and data marketplace. It sells its solutions to enterprise marketers, agencies, marketing technology providers, publishers, and data providers in various industry verticals, such as financial, insurance and investment services, retail, automotive, telecommunications, technology, consumer packaged goods, media, healthcare, travel and hospitality, entertainment, and non-profit. The company was formerly known as Acxiom Holdings, Inc. and changed its name to LiveRamp Holdings, Inc. in October 2018. LiveRamp Holdings, Inc. was incorporated in 2018 and is headquartered in San Francisco, California.

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.

LiveRamp Holdings, Inc. has a Value Score of 59, which is considered to be fairly valued.

LiveRamp Holdings, Inc.’s price-earnings ratio is 15.6 compared to the industry median at 39.3. This means that it has a lower price relative to its earnings compared to its peers. This makes LiveRamp Holdings, Inc. more attractive for value investors.

LiveRamp Holdings, Inc.’s price-to-book ratio is higher than its peers. This could make LiveRamp Holdings, Inc. less attractive for value investors when compared to the industry median at 3.33.

You can read more about LiveRamp Holdings, 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.

Teradata Corporation’s Value Grade

Value Grade:

Teradata Corporation, together with its subsidiaries, provides an AI and knowledge platforms in the United States and internationally. It operates in two segments, Product Sales and Consulting Services. The company’s AI and Knowledge platform designed for enterprise-grade workloads. Its consulting services include support services for organizations to establish data analytics and and AI vision, enable a hybrid ecosystem architecture, and identify and operationalize opportunities. The company serves clients in financial services, healthcare and life sciences, public sector, manufacturing, retail, telecommunications, and travel/transportation sectors through a direct sales force. Teradata Corporation was incorporated in 1979 and is headquartered in San Diego, California.

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.

Teradata Corporation has a Value Score of 83, which is considered to be undervalued.

Teradata Corporation’s price-earnings ratio is 5.8 compared to the industry median at 39.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Teradata Corporation more attractive for value investors.

Teradata Corporation’s price-to-book ratio is lower than its peers. This could make Teradata Corporation more attractive for value investors when compared to the industry median at 3.33.

You can read more about Teradata 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.

NCR Voyix Corporation’s Value Grade

Value Grade:

NCR Voyix Corporation provides digital commerce solutions for retail stores and restaurants in the United States, the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company operates through Retail and Restaurants segments. It offers application program interface connectivity to retail software platforms and applications, hardware terminals, self-service kiosks, including self-checkout, payment processing and merchant acquiring solutions, and bar-code scanners for enterprise and mid-market retailers in the convenience fuel retail and department specialty retail industries, as well as grocery stores, drug stores, and big box retailers. The company also provides POS hardware and software solutions; payment processing; and installation and maintenance services, as well as managed and professional services for restaurants and food service establishment, including quick service, table service and fast casual restaurants. In addition, it offers Voyix Commerce Platform; and back-office solutions, including payment, data and analytics, inventory, and scheduling and labor management solutions. Further, the company provides online ordering; white-labeled websites and mobile applications; Aloha Next by Voyix; and consumer experience, loyalty and marketing. It also provides professional, field break-fix, restaurant managed, installation services, and connected service desk; and fixed and mobile point-of-sale and consumer display terminals, self-checkout hardware, kiosks, kitchen display systems, printers, cash drawers, keyboards, handheld scanners and payment terminals, and ordering kiosks. The company was formerly known as NCR Corporation and changed its name to NCR Voyix Corporation in October 2023. The company was incorporated in 1884 and is headquartered in Atlanta, Georgia.

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.

NCR Voyix Corporation has a Value Score of 67, which is considered to be undervalued.

NCR Voyix Corporation’s price-earnings ratio is 26.6 compared to the industry median at 39.3. This means that it has a lower price relative to its earnings compared to its peers. This makes NCR Voyix Corporation more attractive for value investors.

NCR Voyix Corporation’s price-to-book ratio is higher than its peers. This could make NCR Voyix Corporation less attractive for value investors when compared to the industry median at 3.33.

You can read more about NCR Voyix 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:

Xunlei Limited, together with its subsidiaries, operates an internet platform for digital media content in the People's Republic of China. The company’s platform is based on cloud technology that enables users to access, store, manage, and consume digital media content. It 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 premium acceleration products through Green Channel and Fast Bird products. The company also provides Mobile Xunlei, a mobile application that allows users to search, download, consume, and store digital media content; and StellarCloud, a distributed cloud computing platform. In addition, the company offers Wefun, an audio live-streaming product that offers users to join various chat rooms based on their favorite topics; and 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. Further, it provides online games operated through mobile and online game businesses; advertising services; Xunlei Browser that provides video streaming, web browsing, and novel reading; cloud-based implementation for subscription services; cloud computing services; accelerated data transmission services; indexing technology, and distributed file locating system. 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 95, which is considered to be undervalued.

Xunlei Limited’s price-earnings ratio is 0.4 compared to the industry median at 39.3. 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 3.33.

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 6 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.

• Dropbox, Inc. stock has a Value Grade of B.
• Octave Intelligence plc stock has a Value Grade of B.
• LiveRamp Holdings, Inc. stock has a Value Grade of C.
• Teradata Corporation stock has a Value Grade of A.
• NCR Voyix Corporation stock has a Value Grade of B.
• Xunlei Limited stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 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.

• 6 Undervalued Software Stocks for Monday, August 24
• Why American Bitcoin Corp.’s (ABTC) Stock Is Up 5.49%
• Why Arqit Quantum Inc.’s (ARQQ) Stock Is Down 7.66%
• Why Arteris, Inc.’s (AIP) Stock Is Down 5.61%

AAII Disclaimer

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