Sean D. Emory
Founding Partner & CIO of Avory & Co., Avory Foundational ETF (AVRY)
Paycom, Phreesia, Intuit, MNTN, MediaAlpha and Radcom are the most attractive software names if software rerates over the next quarter, because all are rather cheap on GAAP earnings, below 20x 2027 earnings, and AI should be neutral for them. x.comÂ
Workday looks undervalued, with multiple valuation models putting intrinsic value near $165, a 15-16% discount, despite fears that AI will disrupt SaaS and weak enterprise software guidance from IBM. Its AI agents run at enterprise scale for over 4,000 clients, its 12-month subscription backlog grew more than 15%, and non-GAAP operating margin widened to 31.8% as management raised full-year profit guidance. x.comÂ
Paycom's buyback of 20-25% of its float over the past year makes little sense when ruthless AI implementation is everything and its cost of capital is rising sharply. The stock is down 55% over five years despite strong cash flow, it is not at an entry point, and management has yet to prove itself. x.com x.com x.com x.comÂ