The popularity of Software-as-a-Service (SAAS) is rapidly surging among organizations to boost their efficiency and adopt the latest technologies. SAAS has emerged as a prominent force in the technology and business landscape, and this trend is set to continue further as organizations deploy and use software.
Given the industry’s strong outlook, investors could consider high-growth SAAS stocks UiPath Inc. (PATH), CCC Intelligent Solutions Holdings Inc. (CCCS), and DocuSign, Inc. (DOCU) in November.
With the rapid transformation from traditional software applications to cloud-based software services, the Software-as-a-service market is poised to expand exponentially. Companies are increasingly investing in digital transformation and adopting trends like Vertical SaaS, DaaS, and iPaaS in order to boost their operational efficiency, cost-effectiveness, and versatility.
Gartner projected worldwide end-user spending on public cloud services to increase by 20.4%, reaching $675.4 billion this year, driven by generative AI (GenAI) and application modernization.
Also, SaaS continues to dominate the cloud market in end-user spending, having a projection of 20% growth in spending to reach $247.2 billion in 2024.
Following these lucrative trends, the global Software as a Service (SaaS) market is expected to grow from $317.55 billion in 2024 to $1.23 billion by 2032, exhibiting growth at a CAGR of 18.4%. In global comparison, the U.S. SaaS market is anticipated to grow to $236.69 billion by 2032, driven by the adoption of public and hybrid cloud-based tools.
With growing needs, companies engaged in SAAS services are positioned to capitalize on the industry’s bright prospects and will yield high growth in the long run. Thus, investors could scoop up high-growth SaaS companies’ stocks to advance their portfolios.
Now, let’s take a closer look at the fundamentals of the top Software - SAAS stocks mentioned above, beginning with the third choice.
Stock #3: UiPath Inc. (PATH)
PATH provides an end-to-end automation platform offering a diverse range of international robotic process automation (RPA) solutions. It provides a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization.
On October 22, PATH announced a strategic partnership with Inflection AI to integrate the UiPath Platform with the new Inflection for Enterprise solution, enabling enterprises to achieve greater levels of operational efficiency and effectiveness without compromising trust and AI security options.
The strategic partnership will integrate Inflection AI within UiPath Autopilot and provide an important private cloud alternative for agentic automation tailored to the industries.
On October 15, PATH announced the integration of the UiPath Platform with the SAP Build Process Automation solution, to be sold as one of the SAP Solution Extensions. The offering will enable true enterprise-wide transformation by allowing customers to embrace a holistic view of automation across heterogeneous environments that span both SAP and non-SAP systems.
For the second that ended July 31, 2024, PATH’s total revenue increased 10.1% year-over-year to $316.25 million. Its non-GAAP gross profit grew 6.6% from the year-ago value to $263.18 million. Also, the company’s non-GAAP net income amounted to $23.76 million or $0.04 per share for the quarter, respectively.
Furthermore, as of July 31, 2024, the company's non-GAAP adjusted free cash flow was $149.78 million.
Analysts expect PATH’s revenue and EPS for the fiscal year (ending January 2026) to increase 11.3% and 10.5% year-over-year to $1.58 billion and $0.44, respectively. Further, the company has topped the consensus revenue and EPS estimates in all four trailing quarters.
PATH’s stock has surged 3.1% over the past three months to close the last trading session at $12.70.
PATH’s solid outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Growth and Quality. Within the A-rated Software - SAAS industry, PATH is ranked #11 among 18 stocks.
Click here to access additional ratings of PATH (Stability, Value, Sentiment, and Momentum).
Stock #2: CCC Intelligent Solutions Holdings Inc. (CCCS)
CCCS operates as a software-as-a-service company for the property and casualty insurance economy. Its cloud-based SaaS platform connects trading partners, facilitates commerce, and supports mission-critical, artificial intelligence-enabled digital workflow across the insurance economy.
On September 4, CCCS launched CCC® Payroll, a new solution designed to streamline payroll management for collision repair shops. CCC Payroll is integrated into the CCC ONE® platform and enables shops to track production and labor and streamline payroll within a single system, simplifying the payroll process.
The new solution simplifies the payroll process and gives greater visibility to employees.
On July 30, CCCS unveiled CCC® Intelligent Reinspection, a new solution designed to help auto insurers streamline the review of incoming repair facility estimates, expediting repairer workflows and claims resolutions. The new solution leverages AI technology, and identifies areas for review, and provides reason codes based on insurer rules, helping reinspectors.
For the third quarter that ended on September 30, 2024, CCCS’ revenues increased 7.8% year-over-year to $238.48 million. Its adjusted gross profit rose 8% from the prior year’s period to $185.93 million. The company's adjusted operating income of $91.19 million reflects growth of 10.3% from the previous year's quarter.
Furthermore, the company’s adjusted net income stood at $62.58 million and $0.10 per share, up 9.5% and 11.1% year-over-year, respectively. Its adjusted EBITDA increased 9.3% from the year-ago value to $101.55 million.
Analysts expect CCCS’ revenue for the fourth quarter (ending December 2024) to increase 7.3% year-over-year to $245.23 million. For the same period, its EPS is expected to grow 8% year-over-year to $0.10. Further, the company topped the consensus revenue and EPS estimates in all trailing four quarters, which is remarkable.
Over the past year, the stock has gained 2.3% to close the last trading session at $10.93.
CCCS’ sound fundamentals are reflected in its POWR Ratings. The stock has an overall grade of A, translating to a Strong Buy in our proprietary rating system.
CCCS has a B grade for Momentum, Stability, Sentiment, and Growth. It is ranked #4 among the 18 stocks within the A-rated Software - SAAS industry.
To see the other ratings of CCCS for Quality and Value, click here.
Stock #1: DocuSign, Inc. (DOCU)
DOCU provides electronic signature solutions internationally. The company provides an e-signature solution, enabling the sending and signing of agreements on various devices, Contract Lifecycle Management (CLM), Document Generation streamlines the process of generating new, custom agreements, and Gen for Salesforce.
On June 4, DOCU launched a new connector for SAP Ariba solutions that automate workflows between Docusign CLM and SAP Ariba solutions to help businesses accelerate time to value and eliminate friction in source-to-pay agreement processes. The launch enhanced DOCU’s market position and firmly established the company as a leader.
On May 31, DOCU acquired Lexion, a leading AI-powered agreement management company. The acquisition strengthened DOCU's position in Intelligent Agreement Management (IAM) and added more AI-assisted capabilities to its platform, bringing more insights, analysis, and automation to its customers.
DOCU’s total revenues increased 7% year-over-year to $736.03 million during the second quarter that ended on July 31, 2024. It reported non-GAAP income from operations of $237.16 million, indicating growth of 39.6% year-over-year. The company’s non-GAAP free cash flow grew 7.8% from the year-ago value to $197.93 million.
Additionally, the company’s non-GAAP net income came in at $200.99 million and $0.97 per share, up 34.3% and 34.7% from the prior year’s quarter, respectively.
According to the company’s fiscal year 2025 outlook, DOCU expects total revenue between $2.94 billion and $2.95 billion, while it forecasts subscription revenue to range from $2.86 billion to $2.88 billion.
For the third quarter (ending October 2024), analysts expect DOCU’s revenue to grow 6.4% year-over-year to $745.32 million. For the same period, the company’s EPS is expected to increase 10.6% year-over-year to $0.87. Also, it has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
DOCU’s stock has surged 22.9% over the past six months and 80.9% over the past year to close the last trading session at $70.15.
DOCU’s POWR Ratings reflect its promising prospects. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.
DOCU has an A grade for Quality and a B grade for Growth and Value. It is ranked #2 among 18 stocks in the same industry.
In addition to the POWR Ratings I’ve just highlighted, you can see DOCU’s ratings for Stability, Momentum, and Sentiment here.
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DOCU shares were trading at $68.98 per share on Wednesday afternoon, down $1.17 (-1.67%). Year-to-date, DOCU has gained 16.03%, versus a 23.16% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
3 High-Growth SaaS Stocks to Watch in November StockNews.com
