These 3 Beaten-Down Software Stocks Could Be Setting Up for a Rebound, Says BTIG

Since late 2022, the big story in tech has been artificial intelligence. Generative and agentic AI didn’t just capture headlines – they have been the main driver of market gains and the booster rocket for the tech sector more broadly.

But the gains have not been evenly spread, and not every tech company has been reaping the rewards. Post-COVID, the software sector, especially the SaaS segment, saw a slump, and hit bottom in late 2022 – just as AI was gearing up. Investors since then have focused on AI, with the obvious result: software hasn’t quite recovered, and the segment has underperformed in 2025.

For software companies, the question now is whether they can successfully pivot their products and business models toward an AI-first future. The sector has faced a similar crossroads before during the shift to cloud computing, and history shows that not everyone makes it through the transition.

BTIG analyst Nick Altmann has been tracking this evolution closely – and in select corners of the software space, he sees reasons to be constructive.

“While software stocks have been pressured, our analysis suggests the fundamentals tell a different story. Measuring the ‘true’ underlying & forward-looking growth across our coverage (TTM sub. Billings, ARR, etc.) shows relatively stable growth over the last ~2 years while FCF margins have continued to improve. And other metrics (i.e. NRR) are actually showing reacceleration across a number of names in our coverage… With valuations attractive and a number of companies already having blessed CY26E estimates, we believe software stocks can have a rebound year in CY26,” Altmann opined.

Putting this view into concrete terms, Altmann has recommended three beaten-down software stocks as Buys for the coming months. They are headed for a rebound, he says; and we can take a look at the TipRanks data, and his comments, to decide if these software names are right for today’s market.

OneStream (OS)

OneStream, the Michigan-based enterprise software firm, with a focus on the financial services sector, is the first software stock we’ll look at here. The company bills itself as ‘the operating system for modern finance,’ and offers its customers a cloud-based AI platform that lets its users reconcile data and manage workarounds, freeing up time and energy for their more vital business functions.

OneStream boasts that its finance platform is unique in the industry. It features embedded AI, as an automation tool, and unifies financial and operational data. The system is adaptable, capable of evolving to meet the changing needs of each customer’s business. The company states that its platform brings quantifiable advantages, including a 54% time reduction in closing books, a 72% reduction in data management cycles, and a 75% improvement in reporting cycles.

Those capabilities – to adapt, and to bring measurable gains – are a major selling point for OneStream, and the company currently has over 1,700 customers on its books, served by over 1,600 employees. The company has operations in more than 45 countries – it has a presence in the Americas, Europe, and the Asia-Pacific region.

We should note here that OneStream’s stock has been falling this year. The shares are down approximately 36% for the year-to-date, even as revenues and earnings have been trending upwards.

A look at the last earnings report, which covered 3Q25, brings more detail to the earnings and revenues. The company reported revenue of $154.3 million, up 19% year-over-year and almost $6 million better than had been expected. The bottom line, the non-GAAP EPS, came to 8 cents, beating the forecast by 6 cents per share. And, also of interest, the company’s free cash flow jumped year-over-year, from $1.3 million to $4.8 million.

Watching OneStream from BTIG, Nick Altmann sees plenty of potential for growth here, writing of the company, “Despite shares underperforming YTD, OS is set to grow >20% in FY25E, and a large, under-digitized TAM (~$50B) provides OS with significant runway to drive continued growth durability over the MT. We believe investors remain concerned over potential disruption to application software from GenAI, though we see the Office of the CFO as more insulated vs. other areas of apps and see OS’ platform as well-positioned to drive further digitization in the office of the CFO given its data-centricity (increasingly important), extensible architecture, and broadening AI solution set.”

The analyst goes on to explain why this stock should make a good portfolio addition, adding to the above, “Moreover, we remain upbeat on OS’ opportunity to capture market share within the Commercial segment, and our checks suggest its new CPM Express product solves down-market pain-points, and we see an opportunity for greater Commercial bookings activity to help not only formulate a more durable growth profile but also provide better bookings uniformity as Enterprise transformation remains lumpy. Lastly, while we remain encouraged on OS’ opportunity to drive continued top-class growth, a rapidly improving FCF profile should provide valuation support. As such, we see a compelling risk vs. reward profile in both the near term and the medium term…”

These comments back up Altmann’s Buy rating on the shares, while his $25 price target implies a one-year gain of 37.5%. (To watch Altmann’s track record, click here)

OneStream’s shares are selling for $18.18, and the $28.27 average target price indicates a 55.5% gain for the coming year. The stock’s Strong Buy consensus rating is based on 14 reviews, including 13 Buys and 1 Hold. (See OS stock forecast)

GitLab (GTLB)

GitLab, the next software company we’re looking at here, has built a reputation in the fields of software development, security, and operations. The company first released its open-source DevSecOps platform in 2011, and since then it has built itself up on the freemium model. The open-source architecture of the software platform means that anyone can write improvements to the base code, whether as an offering to the company or just to tweak his own download – but more advanced upgrades and tools are available for paying subscription users.

The GitLab software platform is designed from the keel up to let users unify their DevSecOps tools. It’s an approach that inherently smooths out workflows; the addition of AI technology and tools brings added advantages. These include in-platform software assistants, automation tools, troubleshooting, and even code analysis. The company’s AI is offered through the free packages, but more advanced subscriptions include greater functionality.

Looking at GitLab by the numbers, it’s clear that the product is popular. GitLab has more than 50 million registered users, and more than 5,000 code contributors. There have been 170 consecutive monthly releases of platform and code updates. GitLab is trusted by some of the biggest names in business, including Nvidia, Goldman Sachs, and T-Mobile. We should note, however, that shares in GTLB are down by 32% this year.

On the financial side, GitLab reported $244.4 million in revenue for its last fiscal quarter, 3Q26. That figure was up 25% year-over-year and beat the forecast by just over $5 million. The company’s non-GAAP EPS, 25 cents, was 2 cents better than the prior year and beat expectations by a nickel per share. GitLab reported an adjusted free cash flow of $27.2 million for the quarter.

In his coverage of this stock, analyst Altmann points out several factors that should provide support going forward, writing, “GenAI is resulting in an explosion in software development, and we ultimately see GenAI as a net-positive for GTLB as developer tooling can gain add’l budget authority. And while GTLB has been behind its peers in terms of AI monetization, its cohesive approach remains encouraging, differentiated, and its new Duo Agent Platform offering is set to become generally available very shortly. 3Q26 results were mixed as SMB and Public Sector weighed on upside to estimates, though GTLB continues to positively surprise on the margin side of the equation (we est. 22% FCF margins in FY26E) and we see expanding margins providing a valuation backstop for shares.”

For Altmann, this all adds up to a Buy rating, and his $52 price target implies a one-year upside potential of 37%.

There are 25 recent analyst reviews on record for GTLB shares, and the 16 to 9 split, favoring Buy over Hold, gives them a Moderate Buy consensus rating. The $38.07 trading price and $54.57 average target price together suggest a 12-month share appreciation of 43%. (See GTLB stock forecast)

monday.com (MNDY)

Last on our list here is monday.com. This company, founded in 2012, offers its customers a line of cloud-based work management software. This is a field that modern digital offices are finding increasingly popular – the software and platforms allow users to track workflows, organize projects and collaboration, handle CRM, marketing, sales ops, system optimizations – pretty much everything that an office needs in today’s environment. monday.com’s platforms are fully customizable and are cloud-based.

For the modern office, one of the better features monday.com offers is its use of AI. By incorporating AI into the platform, the company allows its users to smooth out the time-consuming aspects of workflow management. Tasks like data analysis, categorization, and sorting can be automated, as well as communications such as emails. In addition, the AI can automate schedules and translations. It’s a sound application that speeds up systems by making the easy-but-time-consuming tasks go faster.

monday.com boasts that its platform is highly popular with the ‘Fortune 500’ names and that it is trusted by some 60% of those companies. These include such big names as Coca-Cola, Carrefour, and Lionsgate. In all, more than a quarter-million enterprise customers – of all scales – are using monday.com. And more than 3,993 of those customers bring with them over $50,000 in annual recurring revenue.

monday.com shares have been falling this year, facing hits from factors as guides that did not measure up to expectations. For example, for the fourth quarter of this year, the company’s revenue outlook, set between $328 million and $330 million, came in lower than the consensus view of $333.79 million. Shares in this company now show a 38% year-to-date decline.

Nevertheless, the results have been strong. In the third quarter of this year, monday.com saw revenue of $316.9 million. This marked a 26% year-over-year increase and was $4.59 million better than had been anticipated. At the bottom line, the non-GAAP diluted net income per share of $1.16 beat the forecast by 28 cents per share. monday.com reports strong growth in annual recurring revenue (ARR) and, importantly, reports that 10% of the total ARR is now derived from new products.

The BTIG view of monday.com, laid out by Allan Verkhovski, indicates solid growth metrics ahead for this stock; the analyst says, “Shares are now trading at 4.6x EV/Sales and 16x EV/FCF on CY26E… We believe this presents a highly attractive entry point as concerns around weaker than expected financial results from MNDY shifting AI-impacted Google SEO spend are, in our opinion, overblown (drives just ~10% of NNARR). MNDY is showing it is not just a Work Management company as we estimate ARR from new products of ~ $133M (10% of total) is growing +84% y/y. Meanwhile, MNDY is accelerating its GTM strategy through multi-product growth (enterprise product bundles), moving upmarket (solution selling and outbound), and customer retention (adjustments to variable comp plans). This collectively drives management’s confidence (and ours) that MNDY can reach $1.8B of revenue in FY27 (2-year CAGR of 21%).”

Quantifying his stance, Verkhovski rates MNDY shares as a Buy, with a $210 price target that indicates room for an upside of 44% by the end of 2026. (To watch Verkhovski’s track record, click here)

The 20 analyst ratings on this stock break down to 18 Buys and 2 Holds, for a Strong Buy consensus rating. monday.com shares are selling for $145.52, and their $239.05 average price target implies a gain of 64% on the one-year horizon. (See MNDY stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.