In this piece, we will look at the best SaaS stocks trading at a discount.
The software-as-a-service, or SaaS, sector isn’t the same in the AI era. As AI enables businesses to code software with it, SaaS firms have struggled as investors grow wary about their ability to sustain revenue growth. We discussed the impact on SaaS valuations last year in September as part of our coverage of the best cloud stocks to buy according to short sellers and pointed out that not only were valuations at a historic low, but also that only 1% of SaaS firms were seeing a median forward growth estimate of 30%+.
Naturally, one part of the impact on the SaaS sector is the enterprise adoption of AI. On this front, Goldman Sachs’ senior software analyst, Kash Rangan, made some important comments in October. When asked on CNBC’s Closing Bell Overtime on October 9th whether OpenAI was appearing to be the point of failure for the entire AI ecosystem, he commented that “the thing that I am looking for is, the enterprise adoption of AI.” He added that “the thing that I try to focus on is enterprise market. What is the return on investment in the enterprise market?” At the time, Kash shared that while some segments, such as coding and customer support, were showing positive signs, “the revenue picture across the tail of enterprise software segments is still a little feeble.”
More recently, on December 4th, CNBC’s Deirdre Bosa discussed enterprise AI spending. Bosa, discussing reports of Microsoft reducing its sales quote, shared that “the big picture here is that enterprise AI spending, it’s not lining up with the early narrative. Companies are leaning into model usage, but they are moving slower on agents.” She added that “the spend that we’re actually seeing is flowing into model access and increasingly, that is Anthropic’s Claude.”
Our Methodology
To compile our list of the 10 best SaaS stocks trading at a discount, we first used a stock screener to identify software infrastructure and application stocks with PE ratios less than 15 and year to date stock price decline of 5% and above through December 15th. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2025. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Best SaaS Stocks Trading at a Discount
10. Cemtrex, Inc. (NASDAQ:CETX)
Number of Hedge Fund Holdings: 1
Cemtrex, Inc. (NASDAQ:CETXP) is a technology company that operates in the SaaS industry through its security business, Vicon, which provides video management software. The firm made a key set of announcements on December 11th when it revealed that it was nearing the close of an acquisition of a Texas aerospace and defense engineering company. Cemtrex, Inc. (NASDAQ:CETXP) added that it had decided to terminate the acquisition of a robotics integration firm. At the same time, it outlined that it had signed an LOI to acquire an industrial services business in Tennessee.
Cemtrex, Inc. (NASDAQ:CETXP) also discussed its Vicon business in the update. The firm shared that it had started to ship units of its NEXT product line. Cemtrex, Inc. (NASDAQ:CETXP)’s NEXT products are AI-powered modular cameras that seek to reduce installation times. They also provide analytics capabilities on the edge, and as part of its update, Cemtrex, Inc. (NASDAQ:CETXP) added that it committed to Vicon’s “long term transformation through its software and AI-enabled offerings.” The firm also issued a little under 4.8 million shares on December 11th. The purpose of the issuance was to meet certain debt requirements and raise capital. Cemtrex, Inc. (NASDAQ:CETXP)’s acquisition of Texas-based Invocon will bolster the firm’s presence in the aerospace and defense industry.
9. XBP Global Holdings, Inc. (NASDAQ:XBP)
Number of Hedge Fund Holdings: 11
XBP Global Holdings, Inc. (NASDAQ:XBP) is a Texas-based software company that provides payment and technology services to businesses. December 12th was a great day for the stock as it closed a whopping 989% higher after gaining $5.20 during the day’s trading. XBP Global Holdings, Inc. (NASDAQ:XBP)’s shares rose after the firm announced a five-year agreement with the German firm BG-Phoenics. The contract is valued at €21.5 million, and through it, the firm will provide its customer with mail processing by digitizing 148 million pages over the contract’s lifetime. Management noted that the deal allows XBP Global Holdings, Inc. (NASDAQ:XBP) to grow its presence in the European regulated industry.
XBP Global Holdings, Inc. (NASDAQ:XBP)’s deal with the German firm came less than two weeks after the firm had announced another deal with the Swedish regional public authority, Region Uppsala. Terming it an “engagement,” the firm outlined that it planned to work with the Swedish entity by managing administrative and healthcare records. The deal was another where XBP Global Holdings, Inc. (NASDAQ:XBP) executed on its strategy of targeting European public center entities in their bid towards digitization. The firm has also partnered with the New York City Department of Finance for parking violation payment processing.
8. NICE Ltd. (NASDAQ:NICE)
Number of Hedge Fund Holdings: 22
NICE Ltd. (NASDAQ:NICE) provides software for customer engagement, financial fraud management, and other associated applications. Investment firm Wedbush was out with some bad news for the company when, on December 8th, it downgraded the stock to Neutral from Outperform. NICE Ltd. (NASDAQ:NICE)’s share price target was also cut to $120 from $170. A subsequent report discussed some of the reasons behind the rating action to point out that Wedbush was worried about the AI market.
Wedbush’s action came soon after Morgan Stanley had discussed NICE Ltd. (NASDAQ:NICE)’s shares. On October 21st, the firm set a $193 share price target for the software company and kept an Overweight rating. In its coverage, Morgan Stanley noted that while its software checks for the third quarter were not worrisome, they were moderate given the trends for the first and second quarters. The bank added that even if software surprised to the upside, investor sentiment was unlikely to change. NICE Ltd. (NASDAQ:NICE)’s third-quarter financial results, reported on November 13th, saw the firm post $732 million in revenue and $3.18 in earnings per share. Its revenue beat analyst estimates of $728 million, while the EPS were in line. NICE Ltd. (NASDAQ:NICE)’s management was careful to note that the firm experienced 13% year-over-year cloud growth during the third quarter.
7. International Money Express Inc. (NASDAQ:IMXI)
Number of Hedge Fund Holdings: 28
International Money Express Inc. (NASDAQ:IMXI) is a Florida-based remittance services company. 2025 has been an interesting year for the firm as it is currently in the process of being acquired by remittances giant Western Union. On this front, International Money Express Inc. (NASDAQ:IMXI)made a key announcement on December 9th when it revealed that its shareholders had approved the deal. As per the details, 71.5% of the shareholders were present during the meeting, and nearly all of them voted in favor of the deal.
The deal, through which International Money Express Inc. (NASDAQ:IMXI) will merge with a wholly-owned Western Union subsidiary, was announced on August 10th. It will see the acquirer pay $16 per share for a total value of $500 million. International Money Express Inc. (NASDAQ:IMXI) calls its platform remittance-as-a-service (RaaS). The platform enables businesses to integrate remittances into their operating models for improved customer experiences. The firm’s shares jumped by 59% on the day its deal with Western Union was announced. International Money Express Inc. (NASDAQ:IMXI), which primarily provides services in Latin America and the Caribbean, also shared on November 20th that it had partnered with Canadian money services provider Orbit Money Transfer. Through the deal, the Canadian firm’s customers will be able to connect with International Money Express Inc. (NASDAQ:IMXI)’s network.
6. Euronet Worldwide, Inc. (NASDAQ:EEFT)
Number of Hedge Fund Holdings: 30
Euronet Worldwide, Inc. (NASDAQ:EEFT) is a payments and transaction processing firm that also operates in the SaaS sector via its Ren payments platform. On December 12th, Oppenheimer kept a Buy rating on the shares with a $109 share price target, TipRanks reported. The research firm had previously set a $133 share price target for Euronet Worldwide, Inc. (NASDAQ:EEFT) in October after it had lowered it to $133 from $134. The latest action from Oppenheimer came after its virtual meeting with the firm on December 11th.
Euronet Worldwide, Inc. (NASDAQ:EEFT) reported its third-quarter earnings on October 23rd. The results saw it report $1.1 billion in revenue and $3.62 in adjusted earnings per share. Euronet Worldwide, Inc. (NASDAQ:EEFT)’s revenue grew by 4% annually during the third quarter while its earnings marked a 19% jump. As part of the release, management commented that the firm’s global expansion is serving it well on the revenue front. CEO Michael J. Brown added that Euronet Worldwide, Inc. (NASDAQ:EEFT) is also streamlining its network capabilities with stablecoins to enable efficient conversion between fiat and stablecoins. The CEO also noted that his firm’s revenue might have grown faster had it not been for “economic and immigration pressure across the globe.” Euronet Worldwide, Inc. (NASDAQ:EEFT) expects 2025 EPS to grow between 12% to 16%.
5. PagerDuty, Inc. (NYSE:PD)
Number of Hedge Fund Holdings: 33
PagerDuty, Inc. (NYSE:PD) is a software company that enables businesses to monitor their networks and services for incident response and operations management. Bank of America set a $12 share price target for the firm and cut its rating to Underperform on December 2nd. It explained that some of the factors that drove the latest coverage for PagerDuty, Inc. (NYSE:PD) include overall revenue stability, net revenue retention, and billings. BofA added that the firm was suffering from broader economic woes that affected its billings due to layoffs and budget constraints.
PagerDuty, Inc. (NYSE:PD)’s third-quarter fiscal results, reported on November 25th, generated quite a bit of fireworks as they saw the shares dip by 25.7% During the quarter, the firm brought in $124.5 million in revenue and $0.33 in per share profit. PagerDuty, Inc. (NYSE:PD)’s profit reading beat analyst estimates of $0.24, but its revenue missed estimates of $124.9 million. On November 26th, Cannacord Genuity reiterated its Buy rating for the shares and kept a $19 share price target. The firm outlined that PagerDuty, Inc. (NYSE:PD) could experience growth if small and medium businesses perform well. It added that another tailwind for the firm could come in the form of large businesses growing its presence in their internal operations.
4. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)
Number of Hedge Fund Holdings: 33
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a SaaS company that caters to the needs of the finance industry. Investment firm DA Davidson is one of the most ardent followers of the firm and its latest coverage came on December 10th. It saw DA Davidson reiterate a Buy rating and a $30 share price target for Clearwater Analytics Holdings, Inc. (NYSE:CWAN). The stock’s latest closing price was $21.80. In its note, the research firm shared that the SaaS company could be valued between $30 and $34 in case it was sold. The discussion about a sale came following a Reuters report outlining that activist investor Starboard had taken a $5% stake in Clearwater Analytics Holdings, Inc. (NYSE:CWAN) and was pushing for a sale in case of interest from buyers.
The Reuters report had surfaced on December 9th and cited two sources familiar with the matter. Reuters’ sources added that Starboard believed Clearwater Analytics Holdings, Inc. (NYSE:CWAN) was significantly undervalued. The report about Starboard followed an earlier report from the publication, which had claimed that private equity firm Thoma Bravo was interested in acquiring Clearwater Analytics Holdings, Inc. (NYSE:CWAN). On November 13th, Morgan Stanley had kept a Buy rating on the shares and a $27 price target.
3. Strategy Inc (NASDAQ:MSTR)
Number of Hedge Fund Holdings: 43
Strategy Inc (NASDAQ:MSTR) is an enterprise analytics firm that operates in the SaaS industry via its Strategy One platform. Bernstein discussed the firm’s shares on December 8th when it lowered the share price target to $450 from $600 and kept an Outperform rating. As part of its coverage, the financial firm commented that Strategy Inc (NASDAQ:MSTR) has 21 months of cash reserves and that the market was over-concerned about the firm. Bernstein went as far as to comment that the firm could evolve into a Bitcoin-based business that delivers savings products for investors.
Strategy Inc (NASDAQ:MSTR), widely known as a Bitcoin holding company, has had a tumultuous year on the stock market due to the dip in Bitcoin prices. Yet, on December 12th, the firm managed to retain its place in the NASDAQ 100 index. On December 15th, Strategy Inc (NASDAQ:MSTR) shared in an SEC filing that it had bought $980 million worth of Bitcoin at an average price of $92,098. The SEC filing shared that as of December 14th, the firm held a whopping $50 billion in Bitcoin at an aggregate price of $74,972. This filing marked Strategy Inc (NASDAQ:MSTR)’s largest Bitcoin acquisition since July and the second consecutive week of adding more than 10,000 Bitcoin on its books.
2. Global Payments Inc. (NYSE:GPN)
Number of Hedge Fund Holdings: 53
Global Payments Inc. (NYSE:GPN) is a payment software technology firm. It is currently in the process of acquiring financial technology company Worldpay. On this front, Global Payments Inc. (NYSE:GPN) secured a major win in December after the European Commission greenlit the deal. The Commission made the announcement on December 12th after it outlined that it had approved the acquisition under the EU Merger Regulation. In its announcement, the regulatory body outlined that it had concluded that Global Payments Inc. (NYSE:GPN)’s deal would not raise competitive concerns. As a result, it termed its approval “unconditional.”
Global Payments Inc. (NYSE:GPN) had agreed to buy Worldpay in April through a $24.25 billion deal that will also see it sell its issuer solutions unit for $13.5 billion. A Bloomberg report on November 6th claimed that the firm was marketing as much as $6.2 billion in bond sales to finance the deal. The European Commission’s approval came after the British Competition and Markets Authority (CMA) had cleared Global Payments Inc. (NYSE:GPN)’s deal on October 20th. The deal is quite important for the firm and its industry as the combined entity is expected to process 94 billion transactions across 175 countries and generate $12.5 billion in adjusted revenue as well as $6.5 billion in adjusted core earnings.
1. Block, Inc. (NYSE:XYZ)
Number of Hedge Fund Holdings: 64
Block, Inc. (NYSE:XYZ) is a well-known payments processing and financial technology company. Over the past couple of weeks, the firm has been at the center of attention of several analysts. For instance, on December 8th, TD Cowen kept a Buy rating on the stock and kept a $91 share price target for the firm. It called Block, Inc. (NYSE:XYZ) a “Best Idea for 2026,” due to the belief that the firm can grow its gross profit by mid-teen percentages in the medium term.
TD Cowen’s optimism about Block, Inc. (NYSE:XYZ) came after an equally optimistic note by RBC Capital on November 20th. In it, the financial firm was left impressed by the payments company’s Investor Day. RBC Capital praised Block, Inc. (NYSE:XYZ)’s Proto mining business, which it believes provides good insight into the firm’s diversification efforts. Subsequently, it maintained a $90 share price target and an Outperform rating.
After RBC Capital, UBS kept its Buy rating and $90 share price target for Block, Inc. (NYSE:XYZ) in early December. UBS’ action also followed the firm’s investor day, which left it confident about growth in the Square and CashApp businesses. UBS pointed out that Block, Inc. (NYSE:XYZ) had 26 revenue streams, which were generating $100 million in gross profit that for a significant growth over the five revenue streams the firm had in 2020.
While we acknowledge the potential of XYZ to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than XYZ and that has 100x upside potential, check out our report about this cheapest AI stock.
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