If you are like most investors, you are searching for the next hot software stock. The software space has endless potential, yet plenty of the top players are priced at a premium. Selecting one or two stocks out of this group and banking on them outperforming the rest of the industry is not exactly easy.
UiPath (PATH) and NICE Ltd. (NICE) are two software investment candidates of note. Let’s take a look at each of these stocks to help investors decide if either is worthy of a position in their portfolio.
PATH provides an end-to-end automation platform using robotic processes to solve digital business challenges. Headquartered in New York, PATH’s overarching goal of enabling a fully automated business is a laudable vision, yet it probably won’t be practical within the next decade.
There is no debating the fact that PATH’s use of artificial intelligence for automating workflows is inevitable. However, the question is whether PATH will be the leader in this space. The company has nearly 9,000 clients, representing a 40% jump from the year prior. PATH raked in $388 million in the first quarter. The company estimates its 2022 first-quarter revenue to be more than $680 million.
PATH is priced at $60.78. Its 52-week high is $90, while its 52-week low of $57.01. PATH has an overall grade of D, which translates into a Sell rating in our POWR Ratings system. The company has a D Value Grade of D and Growth Grade of F. You can find out how PATH fares in the rest of the POWR Ratings components, including Momentum, Stability, Sentiment, and Quality, by clicking here.
PATH is ranked in the bottom half of the Software – Business industry, slotting in at 43rd out of 61 stocks. You can find the top-ranked stocks in this industry by clicking here.
Click here to check out our Software Industry Report for 2021
NICE Ltd. (NICE)
NICE is an enterprise software solutions provider. The company’s operating segment includes compliance, financial crime, and customer interaction solutions. These solutions take the form of software applications, multimedia platforms, and other integrated services.
NICE has an overall grade of B, translating into a Buy rating in our POWR Ratings system. The company has B grades in the Quality and Stability components. You can find out how NICE grades out in the rest of the components, including Growth, Value, Momentum, Sentiment, and Quality, by clicking here.
Of the 144 stocks in the Software – Application industry, NICE is ranked 16th. You can find other top stocks in this industry by clicking here. NICE is trading at $288.50. The stock’s 52-week high is $288.73, and its 52-week low of $209.26. The company has a fairly low beta for a software stock. NICE’s 0.79 beta indicates the stock is less volatile than the market.
In the past half-year, NICE’s average upside potential, according to analysts, has been slightly more than 10%. The highest analyst target price of $302. If you look at NICE’s price returns, you will find plenty of green. For instance, the stock is up 151.08% over the past three years.
Which is the Better Investment?
NICE is the better of these two software stocks. The company is ranked in the top 10% of its industry and is also rated a Buy in our POWR Ratings system. In contrast, PATH has a Sell rating. Making matters worse for PATH investors is the stock’s low ranking in its industry.
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PATH shares rose $0.44 (+0.71%) in premarket trading Wednesday. Year-to-date, PATH has declined -9.72%, versus a 20.63% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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