YOU: 3 Agile Software Stocks Driving Digital Transformation

Agile software companies are at the forefront of digital transformation, providing tools that empower businesses to adapt to a rapidly changing technological landscape. Firms in this sector specialize in creating innovative software solutions for cloud computing, automation, and enterprise management, driving efficiency and scalability.

Therefore, investors could grab shares of fundamentally strong software stocks, Clear Secure, Inc. (YOU), Rapid7, Inc. (RPD), and Docebo Inc. (DCBO). These companies are well-positioned to capitalize on the essential tools needed for digital transformation.

Businesses are investing heavily in technologies to stay competitive, fueling the demand for agile software solutions. The ongoing shift to cloud-based infrastructures and the integration of artificial intelligence (AI) across industries are helping software providers see a surge in revenues. By 2026, the cloud computing market is forecast to be worth $947.3 billion, whereas 96% of companies use the public cloud and 84% of companies use the private cloud.

As remote and hybrid work models become permanent fixtures, the need for robust, user-friendly platforms is stronger than ever. Modern collaboration tools have critical features like real-time collaboration, enhanced integration, increased security, and compliance, which play a crucial role. This trend is boosting revenues and expanding market opportunities for agile software firms.

Cybersecurity integration is another area where these companies excel, ensuring that their digital transformation tools are innovative and secure. Moreover, the global software market is expected to reach $2.24 trillion by 2034, exhibiting a CAGR of 11.8%.

Now, let us dive deep into the fundamentals of the three above-mentioned agile software stocks.

Clear Secure, Inc. (YOU)

YOU operates a secure identity platform under the CLEAR brand. Its secure identity platform is a multi-layered infrastructure consisting of its front-end, including enrollment, verification, and linking, and robust, secure, and scalable backend.

3 STOCKS TO DOUBLE THIS YEAR

On December 9, YOU opened a new location at the Mall of America, the largest shopping and entertainment complex, the largest shopping and entertainment complex, to enroll and renew customers in the Trusted Traveler program. This new opening is its first non-airport location in Bloomington for enrollment and renewal services, enhancing the company’s expansion to provide customers with a fast and efficient travel experience.

In the same month, YOU announced that to enroll and renew consumers in the Trusted Traveler program, it opened a new location at the Shops at the Oculus inside the Westfield World Trade Center, making it the first non-airport location in Manhattan.

For the fiscal third quarter, which ended on September 30, 2024, YOU’s revenue increased 23.7% year-over-year to $198.42 million, while its operating income rose 82% from the year-ago value to $35.09 million. The company’s adjusted net income amounted to $42.46 million and $0.30 per share, up 34.9% and 42.9% from the prior-year quarter, respectively. Also, its adjusted EBITDA grew 64.3% from the prior-year quarter to $48.65 million.

Street expects YOU’s revenue for the fiscal fourth quarter (ending December 2024) to increase an 18.2% year-over-year to $202.15 million. Moreover, its EPS estimate of $0.29 for the same period indicates a 72.9% year-over-year growth. In addition, it surpassed the consensus revenue estimates in each of the trailing four quarters, which is impressive.

Over the past nine months, the stock has gained 38.4%, closing the last trading session at $26.04.

YOU’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

It has an A grade for Value and a B for Growth and Quality. It is ranked #4 in the 20-stock B-rated Software – Security industry. Click here to see the additional ratings for YOU (Momentum, Stability, and Sentiment).

Rapid7, Inc. (RPD)

RPD is a global cybersecurity software and services provider with the expertise of the security operations center (SOC) across information security, cloud operations, development, and information technology (IT) teams. It provides solutions under the Rapid7, Nexpose, and Metasploit brand names.

On December 3, RPD announced the expansion of its Managed Extended Detection and Response (MXDR) service to include enhanced support for Amazon Web Services (AWS) environments. This service enhancement will drive broader, faster threat detection and remediation by combining cloud native telemetry, AWS security telemetry, and enhanced detections in the Rapid7 Command Platform.

On November 20, the company announced that its Exposure Command solution supports Amazon Web Services (AWS) Resource Control Policies (RCPs). This feature allows AWS customers more granular control over access at the resource level and provides additional visibility, insights, and best practices. This move could enhance RPD’s service offerings and strengthen its position in the cybersecurity market.

RPD’s revenue for the third quarter ended September 30, 2024, increased 8% year-over-year amounting to $214.65 million. It reported non-GAAP income from operations of $136.80 million, indicating a 19.5% growth from the prior year’s quarter. Moreover, the company’s non-GAAP net income stood at $47.76 million and $0.66 per share, reflecting increases of 40.5% and 32% from year-ago value, respectively. Also, its adjusted EBITDA came in at $50.08 million, up 16.7% year-over-year.

Analysts expect RPD’s revenue for the first quarter (ending March 2025) to increase 4.4% year-over-year to $214.09 million, while its EPS for the same quarter is expected to grow marginally from the prior year to $0.55. Moreover, the company has surpassed Street EPS estimates in each of the trailing four quarters.

The stock has declined marginally over the past month to close the last trading session at $38.84.

RPD’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

It also has a B grade for Value. Within the same Software – Security industry, it is ranked #8 out of 20 stocks. Click here to see RPD’s ratings for Growth, Momentum, Stability, Sentiment, and Quality.

Docebo Inc. (DCBO)

Based in Toronto, Canada, DCBO is a learning management software company that provides an artificial intelligence (AI)-powered learning platform internationally. It provides a Learning Management System (LMS) to train internal and external workforces, partners, and customers.

On November 29, DCBO announced a strategic alliance with Deloitte to help mid-size and large organizations build robust, growth-focused learning ecosystems. This partnership combines DCBO’s cutting-edge learning technology with Deloitte’s consulting will boost employee engagement and drive measurable business success.

On October 3, DCBO partnered with TEDAI for the TEDAI Vienna event, serving as the business learning partner. DCBO played a vital role in showcasing how enterprises can harness AI to transform workplace learning and development. This collaboration highlights the company’s commitment to reshaping the future of work through AI.

During the third quarter (ended September 30, 2024), DCBO’s revenue increased 19.2% year-over-year to $55.43 million. Further, its gross profit grew 19.2% from the prior year’s quarter to $42.80 million. The company’s operating income amounted to $4.72 million, up 51.7% year-over-year.

In addition, its adjusted EBITDA rose 92.4% from the year-ago value to $8.68 million. DCBO’s adjusted net income for the quarter amounted to $8.26 million or $0.26 per share, reflecting increases of 66.7% and 80%, respectively, from the same period last year.

The consensus revenue estimate of $56.22 million for the fiscal fourth quarter (ended December 2024) represents a 14.1% increase year-over-year. The consensus EPS estimate of $0.27 for the about-to-be-reported quarter indicates an 8.7% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

Shares of DCBO have surged 12.3% over the past six months to close the last trading session at $42.14.

DCBO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

DCBO has an A grade for Sentiment B for Growth and Quality. It is ranked #4 out of 124 stocks in the B-rated Software – Application industry. Click here to access the DCBO’s additional ratings for Value, Momentum, and Stability.

What To Do Next?

Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:

3 Stocks to DOUBLE This Year >

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year

YOU shares were trading at $26.04 per share on Monday afternoon, up $0.03 (+0.12%). Year-to-date, YOU has declined -2.25%, versus a 1.96% rise in the benchmark S&P 500 index during the same period.