Top 11 Software Stocks by Marvin Scores
Marvin's rules picked 11 software stocks across three software industries. Dave, Gen Digital and AppLovin have the highest overall scores, and each company is scored against others in its own industry.
Software companies sell programs, online platforms and digital services, and they often keep a large share of each sale as profit once the product is built. That is why margins and cash generation matter when comparing them. This list covers 11 software stocks that Marvin's rules selected from three related industries: application software, infrastructure software and software services.
The picks below show growth, profit margins, return on equity and debt where the data exists. Strong numbers in one area can sit beside weak numbers in another. Some companies here grow quickly but earn thin or negative operating margins, while others grow slowly but turn a large share of revenue into profit.
Several companies have missing figures, and each blurb notes that. Marvin's scores describe how a company compares with its industry peers today. They are not a forecast, and this guide is not advice to buy or sell anything.
The list
How Marvin ranked these stocks
Marvin included companies above a minimum size, then ranked them by Marvin scores. The scores run on a scale from zero to one hundred and are relative to each company's own industry, so a high score means a company looks strong against its industry peers, not against every stock. The group covers three related industries (Software - Application, Software - Infrastructure and Software - Services). Within each, companies are ordered by highest Overall score first, with at most four per industry. The list is ordered the same way.
Companies above about $300 million in size, ranked by Marvin scores (0-100, relative to each company's own industry). The 3 related industries in this group (Software - Application, Software - Infrastructure, Software - Services), highest Overall score first; at most 4 per industry.
The stocks, one by one
Dave Inc. DAVE
Dave Inc. has an overall score of 97 and a free cash flow margin of 50.7%, so it kept a large share of revenue as cash. Revenue grew 59.7% and return on equity is 107.1%. Caution: operating margin and debt figures are missing, so the picture is incomplete.
Gen Digital Inc. GEN
Gen Digital has an overall score of 97 and strong profitability, with an operating margin of 41.7% and a gross margin of 78.0%. Revenue grew 27.1%. Caution: debt-to-equity is 3.08, the heaviest debt load on this list.
AppLovin Corporation APP
AppLovin has an overall score of 96, revenue growth of 70.0% and an operating margin of 77.4%, a fast-growing and very profitable mix. Return on equity is 139.4%. Caution: debt-to-equity is 1.11, so it uses some borrowing, and free cash flow margin is missing.
JFrog Ltd. FROG
JFrog has an overall score of 95, revenue growth of 24.1% and a free cash flow margin of 28.3%, which suggest healthy cash generation. Caution: operating margin is -11.5% and return on equity is -4.6%, both negative, so accounting profits are not there yet.
Microsoft Corporation MSFT
Microsoft has a quality score of 97, an operating margin of 46.8% and low debt, with debt-to-equity of 0.29. Caution: revenue growth of 17.8% is slower than many peers here, and its opportunity score of 83 trails the leaders.
Remitly Global, Inc. RELY
Remitly Global grew revenue 29.4% and carries almost no debt, with debt-to-equity of 0.03. Its free cash flow margin is 21.4%. Caution: operating margin is only 9.5%, so profit is thin, and gross margin data is not available.
Clear Secure, Inc. YOU
Clear Secure turns a lot of revenue into cash, with a free cash flow margin of 50.8%, and its return on equity is 71.7%. Operating margin is 25.1%. Caution: revenue growth of 16.9% is modest, and debt and gross margin figures are missing.
VeriSign, Inc. VRSN
VeriSign has very high profitability, with an operating margin of 67.9% and a free cash flow margin of 62.4%. Caution: revenue growth of 6.4% is slow, its opportunity score is only 61, and return on equity and debt data are missing.
Maplebear Inc. CART
Maplebear has an overall score of 84, revenue growth of 10.8% and a free cash flow margin of 29.5%. Return on equity is 20.7%. Caution: operating margin of 14.8% is much lower than the most profitable names here, and debt data is missing.
Verisk Analytics, Inc. VRSK
Verisk Analytics has a strong operating margin of 44.0% and a free cash flow margin of 36.3%. Caution: revenue growth of 6.6% is slow, its opportunity score is 63, and return on equity and debt figures are missing.
Ionic Digital Inc. Class A IOND
Ionic Digital has the lowest overall score on this list, at 46, with a quality score of 50. Its debt-to-equity ratio is 0.00, essentially no debt. Caution: growth, margin and return figures are all missing, so there is little else to judge.
Common questions
What makes a software stock look strong on Marvin's scores?
Marvin's Overall score blends a quality score and an opportunity score, and each is measured against companies in the same industry. A high score means the company compares well with its peers today. It does not predict future results.
Why do some software companies have missing numbers?
Not every figure is available for every company. Some firms do not report a gross margin, and others have no usable return on equity or debt ratio. The blurbs use only the figures that exist and note when something is missing.
Why are three software industries included in one list?
Application software, infrastructure software and software services are closely related. Because scores are relative to each company's own industry, a high score is a comparison with direct peers. It is not a direct ranking across all three industries.
Keep reading
- Top 15 Technology Stocks Right Now, Ranked by Marvin Scores
- Top 15 Technology Companies With the Strongest Businesses
- Top 15 Infrastructure Software Stocks, Ranked by Marvin Scores
- Top 15 Application Software Stocks by Marvin Score
Free account. Build your own AI-made watchlists, follow Marvin's scores and share lists.
Create a free account
Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.