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.
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.
