Software is rapidly reducing operating expenses for businesses. This secular theme has materialized in superior earnings growth and stock price performance for most SaaS companies, and over the last six months, the industry’s 54.6% return has topped the S&P 500 by 45.5 percentage points.
However, only a handful of companies will ultimately thrive over the long term as the low barriers to entry for software businesses lead to fierce competition. With that said, here are three resilient software stocks at the top of our wish list.
JFrog (FROG)
Market Cap: $11.58 billion
Named after the amphibian that continuously evolves from egg to tadpole to adult, JFrog (NASDAQ: FROG) provides a platform that helps organizations securely create, store, manage, and distribute software packages across any system.
Why Are We Bullish on FROG?
- Billings growth has averaged 31.5% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Robust free cash flow margin of 28.3% gives it many options for capital deployment
At $93.19 per share, JFrog trades at 16.7x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Cadence Design Systems (CDNS)
Market Cap: $89.8 billion
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Why Could CDNS Be a Winner?
- Average billings growth of 17.9% over the last year enhances its liquidity and shows there is steady demand for its products
- Superior software functionality and low servicing costs are reflected in its best-in-class gross margin of 86.8%
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
Cadence Design Systems’s stock price of $308.58 implies a valuation ratio of 13.4x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
CLEAR Secure (YOU)
Market Cap: $4.69 billion
Recognized by its signature blue lanes and biometric pods at airport checkpoints across America, CLEAR Secure (NYSE: YOU) provides biometric identity verification technology that allows subscribers to bypass regular security lines at airports and access secure experiences at various venues.
What Makes YOU Stand Out?
- Market share has increased as its 36% annual revenue growth over the last five years was exceptional
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Strong free cash flow margin of 50.8% enables it to reinvest or return capital consistently
CLEAR Secure is trading at $45.43 per share, or 3.9x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
High-quality stocks for all market conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
