Several companies are now shifting towards a SaaS (software-as-a-service) business model to benefit from a steady stream of recurring revenue across market cycles. Here, customers subscribe to the software without purchasing it upfront. Compared to the traditional model, where users pay a large sum to own the software, SaaS provides recurring sales to companies and offers the customer with pricing flexibility.
These companies enjoy high gross margins and asset-light businesses, making SaaS stocks a top investment choice in 2024. While several SaaS companies are operating in the U.S. and Canadian markets, here are two top tech stocks you can consider owning this September.
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Snowflake stock
Valued at US$38 by market cap, Snowflake (NYSE:SNOW) stock is down 71% from all-time highs. The steep decline in share prices allows investors to buy the dip and derive outsized gains when market sentiment recovers.
Snowflake offers enterprises a cloud-based data platform. Its Data Cloud product allows customers to easily consolidate data, drive meaningful business insights, and build data-driven applications. Snowflake caters to companies across various industries, increasing its sales from US$265 million in fiscal 2019 (ended in January) to US$2.8 billion in fiscal 2024. While its sales growth has decelerated recently, Snowflake has increased revenue by 31.2% to US$3.2 billion in the last 12 months.
Snowflake stock tanked 14% following its fiscal second quarter (Q2) of 2025 results due to decelerating growth in product sales. The company reported US$869 million in revenue, above estimates of US$851 million. However, product sales rose 30% to US$829.3 million, compared to a 34% growth in Q1.
While its top-line growth is slowing, Snowflake has focused on improving the bottom line. In fact, the company’s free cash flow has risen to US$847.4 million in the last four quarters, up from US$813 million in fiscal 2024 and US$520 million in 2023.
Out of the 44 analysts tracking Snowflake, 30 recommend “buy,” 12 recommend “hold,” and two recommend “sell.” The average target price for SNOW stock is US$167.5, indicating an upside potential of 50% from current levels.
Docebo stock
Valued at $2.35 billion by market cap, Docebo (NASDAQ:DCBO) provides a cloud-based learning management system for training internal and external workforces. Its artificial intelligence (AI)-powered platform helps customers centralize learning materials into a single learning management system and expedite the learning process.
Down 50% from all-time highs, Docebo stock has more than tripled investor returns in the last five years as the company’s sales have grown from US$41.4 million in 2019 to US$200 million in the previous 12 months.
With a gross margin of 80%, Docebo’s operating income has increased to US$5.2 million in Q2 of 2024, up from US$0.7 million in the year-ago period. However, its free cash flow has improved from $1.2 million in 2022 to $27 million in the last year, indicating a margin of 13%.
Docebo continues to widen its customer base and increase customer spending, both of which translate to solid top-line growth. As the company continues to benefit from economies of scale, analysts expect it to expand adjusted earnings from $0.11 per share in 2023 to $1.34 per share in 2025.
The TSX tech stock trades at a 30% discount to consensus price target estimates and is a top SaaS stock to own right now.
