5 Cheap Software Stocks to Buy According to Analysts

In this article, we discuss 5 cheap software stocks to buy according to analysts. If you want to see more stocks in this selection, check out 12 Cheap Software Stocks to Buy According to Analysts. 

5. Ebix, Inc. (NASDAQ:EBIX)

Number of Hedge Fund Holders: 11

Average Upside Potential Based on Analyst Ratings: 129.34%

Average Price Target: $30.25

Ebix, Inc. (NASDAQ:EBIX) offers on-demand infrastructure software exchanges and e-commerce services to various industries, including insurance, finance, travel, cash remittance, and healthcare. The company and its subsidiaries operate both in the United States and internationally. On March 15, Ebix, Inc. (NASDAQ:EBIX) reported a Q4 non-GAAP EPS of $0.36 and a revenue of $255.2 million, outperforming Wall Street consensus by $29.2 million. The operating cash in Q4 2022 came in at $32.5 million. It is one of the best cheap software stocks to consider. 

On March 16, Craig-Hallum analyst Jeff Van Rhee reiterated a Buy recommendation on Ebix, Inc. (NASDAQ:EBIX) but trimmed the price target on the shares from $40 to $35, due to peer multiples and higher interest rates. The analyst noted that Ebix, Inc. (NASDAQ:EBIX) had a strong performance in Q4, with a year-over-year constant currency revenue growth of 18%, surpassing their top-line estimate by a significant margin. The company is increasing its market share in both North American insurance operations and the India-centric EbixCash business, and is experiencing positive momentum overall, according to Craig-Hallum. 

According to Insider Monkey’s fourth quarter database, 11 hedge funds were bullish on Ebix, Inc. (NASDAQ:EBIX), compared to 17 funds in the prior quarter. D E Shaw is a significant stakeholder of the company, with 637,828 shares worth $12.7 million. 

Here is what Wasatch Small Cap Value Fund has to say about Ebix, Inc. (NASDAQ:EBIX) in its Q1 2021 investor letter:

“The Fund’s leading detractors were largely information-technology companies, which wasn’t particularly surprising given the broader rotation out of tech and into other segments of the value space. Shares of Ebix, Inc. (EBIX) declined after the company’s auditor resigned due to control issues surrounding a new line of gift cards. We don’t think the misstep was intentional, but rather a case of management erring by not focusing more closely on the audit process. We’ve known Ebix for more than 10 years, and we believe the investigation will lead to improved oversight in the future. Still, we are monitoring the situation closely.”

4. Presto Automation Inc. (NASDAQ:PRST)

Number of Hedge Fund Holders: 5

Average Upside Potential Based on Analyst Ratings: 168.99% 

Average Price Target: $4.25

Presto Automation Inc. (NASDAQ:PRST) operates as a labor automation technology provider in the hospitality industry. For the fiscal year ending June 30, 2023, Presto Automation Inc. (NASDAQ:PRST) expects reported ARR to be between $28 to $30 million. It is one of the best cheap software stocks to invest in. 

On December 9, Chardan analyst Brian Dobson initiated coverage of Presto Automation Inc. (NASDAQ:PRST) with a Neutral rating and a $4.25 price target.

According to Insider Monkey’s fourth quarter database, 5 hedge funds were long Presto Automation Inc. (NASDAQ:PRST), compared to 6 funds in the earlier quarter. The combined stakes in Q4 2022 came in at $456,000, up from $141,000 in Q3. 

3. Cepton, Inc. (NASDAQ:CPTN)

Number of Hedge Fund Holders: 4

Average Upside Potential Based on Analyst Ratings: 330.66%

Average Price Target: $2.35

Cepton, Inc. (NASDAQ:CPTN) provides lidar-based solutions for automotive, smart cities, smart spaces, and smart industrial applications in the United States, Japan, China, and internationally. On February 6, Cepton, Inc. (NASDAQ:CPTN) declared that it had secured a sales agreement worth millions of dollars from a major operator of highway tolling systems in the United States. According to the terms of the extensive contract, the customer will use Cepton, Inc. (NASDAQ:CPTN)’s Sora series lidar sensors on multiple significant toll roads in the Tri-State region and Northern California. 

According to Northland analyst Gus Richard, Cepton, Inc. (NASDAQ:CPTN) is a “Top Pick for 2023” due to their high-quality automotive lidar product. Richard suggested that in the automotive lidar market, four companies, including Cepton, Inc. (NASDAQ:CPTN), are mostly involved. He maintains an Outperform rating and a $4 price target on Cepton’s shares on December 22. 

According to Insider Monkey’s fourth quarter database, 4 hedge funds were bullish on Cepton, Inc. (NASDAQ:CPTN), compared to 7 funds in the prior quarter. Steve Cohen’s Point72 Asset Management is the largest stakeholder of the company, with 1.8 million shares worth $2.30 million. 

2. Arqit Quantum Inc. (NASDAQ:ARQQ)

Number of Hedge Fund Holders: 8

Average Upside Potential Based on Analyst Ratings: 382.14%

Average Price Target: $9.50

Arqit Quantum Inc. (NASDAQ:ARQQ) is a cybersecurity service provider that operates in the United Kingdom using both satellite and terrestrial platforms. The company’s flagship product is QuantumCloud, a Platform as a Service that generates unbreakable software encryption keys. It is one of the best cheap software stocks to consider. 

On February 22, H.C. Wainwright analyst Scott Buck maintained a Buy rating on Arqit Quantum Inc. (NASDAQ:ARQQ) but lowered the firm’s price target on the shares to $10 from $14. Despite a drop in the share price due to an equity offering, Buck suggests that the company now has enough funds to speed up its shift towards a channel partner model. Arqit has secured sufficient capital to run its operations for the next 10-12 months, even if it doesn’t generate any revenue, according to the analyst.

According to Insider Monkey’s fourth quarter database, 8 hedge funds were long Arqit Quantum Inc. (NASDAQ:ARQQ), compared to 3 funds in the earlier quarter. 

1. Movella Holdings Inc. (NASDAQ:MVLA)

Number of Hedge Fund Holders: N/A

Average Upside Potential Based on Analyst Ratings: 414.71%

Average Price Target: $5.00

Movella Holdings Inc. (NASDAQ:MVLA) operates as a full-stack provider of sensors, software, and analytics that allow the digitization of movement. On April 3, Movella Holdings Inc. (NASDAQ:MVLA) reported a Q4 revenue of $12.12 million, up 18.8% on a year-over-year basis. It is one of the best cheap software stocks to monitor according to analysts. 

On March 15, Stifel initiated coverage of Movella Holdings Inc. (NASDAQ:MVLA) with a Buy rating and a $7 price target. The analyst pointed out that Movella provides a unique and comprehensive solution, referred to as “full-stack,” that gives it a competitive edge over its rivals. The company has three different options for inertial motion capture hardware, and its Xsens Motion Cloud analytics provide valuable insights into human body movements and kinematics for various groups such as athletes, workers, and patients. Stifel believes that Movella Holdings Inc. (NASDAQ:MVLA) is well-positioned to enter several high-growth market opportunities, which makes its total addressable market highly attractive.

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