8 Best Automotive Software for February 2026
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Market Overview & Selection Criteria
The automotive software sector is experiencing rapid evolution driven by advancements in autonomous driving, AI integration, and vehicle electrification, creating opportunities for value-focused analysis. Value Sense selected these 8 stock picks using proprietary machine learning models that evaluate intrinsic value against current market prices, quality ratings, ROIC, revenue growth, and FCF margins. Stocks were filtered from curated watchlists emphasizing undervalued companies in automotive tech, prioritizing those with strong gross margins or growth potential despite varying 1Y returns. This methodology highlights educational insights into best value stocks in automotive software, blending established players with high-growth innovators for a balanced stock watchlist.
Featured Stock Analysis
Stock #1: Autodesk, Inc. (ADSK)
| Metric | Value |
|---|---|
| Market Cap | $53.8B |
| Quality Rating | 7.0 |
| Intrinsic Value | $191.5 |
| 1Y Return | -18.4% |
| Revenue | $6,882.0M |
| Free Cash Flow | $2,115.0M |
| Revenue Growth | 15.5% |
| FCF margin | 30.7% |
| Gross margin | 91.3% |
| ROIC | 21.3% |
| Total Debt to Equity | 101.2% |
Investment Thesis
Autodesk, Inc. (ADSK) stands out with a robust Quality rating of 7.0, the highest in this automotive software collection, supported by impressive financial metrics including $6,882.0M in revenue, $2,115.0M free cash flow, and a stellar 91.3% gross margin. With 15.5% revenue growth and 21.3% ROIC, ADSK demonstrates efficient capital allocation in a $53.8B market cap environment, though its 1Y return of -18.4% suggests potential undervaluation relative to its intrinsic value of $191.5. This positions ADSK as a quality leader for investors analyzing design software critical to automotive innovation, offering stability amid sector volatility.
Key financials like 30.7% FCF margin underscore operational strength, making it a cornerstone for portfolios seeking reliable growth in tech-driven automotive applications.
Key Catalysts
- Strong revenue growth of 15.5% signals expanding demand for CAD tools in automotive design.
- Exceptional 91.3% gross margin and 30.7% FCF margin indicate pricing power and cash generation.
- High ROIC of 21.3% reflects efficient use of invested capital for long-term value creation.
Risk Factors
- Elevated total debt to equity of 101.2% could pressure finances in rising interest environments.
- Negative 1Y return of -18.4% highlights short-term market headwinds.
Stock #2: Constellation Brands, Inc. (STZ)
| Metric | Value |
|---|---|
| Market Cap | $27.1B |
| Quality Rating | 6.1 |
| Intrinsic Value | $61.5 |
| 1Y Return | -14.5% |
| Revenue | $9,382.5M |
| Free Cash Flow | $432.4M |
| Revenue Growth | (7.9%) |
| FCF margin | 4.6% |
| Gross margin | 52.0% |
| ROIC | 19.6% |
| Total Debt to Equity | 133.3% |
Investment Thesis
Constellation Brands, Inc. (STZ), with a $27.1B market cap and Quality rating of 6.1, shows solid fundamentals despite a revenue dip of 7.9%, generating $9,382.5M in revenue and $432.4M free cash flow. Its intrinsic value of $61.5 contrasts with a -14.5% 1Y return, suggesting undervaluation for value investors eyeing beverage ties to automotive distribution or consumer trends. A 52.0% gross margin and 19.6% ROIC highlight profitability, though 4.6% FCF margin and 133.3% total debt to equity warrant scrutiny in this stock picks analysis.
This profile offers educational insights into mature companies with recovery potential in adjacent sectors influencing automotive software ecosystems.
Key Catalysts
- High ROIC of 19.6% demonstrates strong returns on capital deployment.
- Substantial $9,382.5M revenue base provides scale for operational leverage.
- 52.0% gross margin supports resilience in competitive markets.
Risk Factors
- Revenue contraction of 7.9% indicates near-term demand challenges.
- High total debt to equity of 133.3% increases balance sheet vulnerability.
- Modest 4.6% FCF margin limits aggressive expansion flexibility.
Stock #3: AEye, Inc. (LIDR)
| Metric | Value |
|---|---|
| Market Cap | $5,267.8M |
| Quality Rating | 5.8 |
| Intrinsic Value | $0.4 |
| 1Y Return | 74.3% |
| Revenue | $182.0K |
| Free Cash Flow | ($33.0M) |
| Revenue Growth | (19.1%) |
| FCF margin | (18,125.8%) |
| Gross margin | (95.6%) |
| ROIC | 979.0% |
| Total Debt to Equity | 0.4% |
Investment Thesis
AEye, Inc. (LIDR) features a $5,267.8M market cap and Quality rating of 5.8, with a standout 74.3% 1Y return amid lidar tech relevance to automotive software. However, intrinsic value of $0.4 flags significant overvaluation risks, paired with minimal $182.0K revenue, $33.0M free cash flow, and extreme 18,125.8% FCF margin. A remarkable 979.0% ROIC contrasts negative gross margin of 95.6% and 19.1% revenue growth, offering high-volatility insights for undervalued stocks watchlists focused on autonomous driving potential.
This analysis educates on speculative plays where outlier ROIC meets cash burn challenges.
Key Catalysts
- Impressive 74.3% 1Y return reflects market enthusiasm for lidar in autos.
- Exceptional ROIC of 979.0% suggests breakthrough efficiency in core tech.
- Low 0.4% total debt to equity minimizes financial leverage risks.
Risk Factors
- Tiny $182.0K revenue and 19.1% growth signal early-stage scalability issues.
- Negative gross margin of 95.6% and massive FCF losses of $33.0M.
- Extreme negative FCF margin of 18,125.8% highlights cash flow distress.
Stock #4: WeRide Inc. (WRD)
| Metric | Value |
|---|---|
| Market Cap | $2,268.9M |
| Quality Rating | 5.2 |
| Intrinsic Value | $5.9 |
| 1Y Return | -46.4% |
| Revenue | CN¥701.6M |
| Free Cash Flow | N/A |
| Revenue Growth | 92.2% |
| FCF margin | N/A |
| Gross margin | 31.8% |
| ROIC | (200.7%) |
| Total Debt to Equity | N/A |
Investment Thesis
WeRide Inc. (WRD), at $2,268.9M market cap with Quality rating 5.2, boasts 92.2% revenue growth from CN¥701.6M, positioning it as a high-growth autonomous driving software contender despite -46.4% 1Y return and intrinsic value of $5.9. N/A FCF and 200.7% ROIC reflect investment phase, balanced by 31.8% gross margin and N/A debt metrics, making it a key automotive stock pick for long-term value analysis in robotaxi tech.
Educational value lies in contrasting explosive growth with profitability hurdles.
Key Catalysts
- Explosive 92.2% revenue growth underscores autonomous vehicle demand.
- Solid 31.8% gross margin indicates improving unit economics.
- N/A debt to equity suggests clean balance sheet for scaling.
Risk Factors
- Negative 1Y return of -46.4% shows investor skepticism.
- Poor ROIC of 200.7% signals capital inefficiency.
- N/A FCF data points to ongoing cash consumption.
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Stock #5: Aeva Technologies, Inc. (AEVA)
| Metric | Value |
|---|---|
| Market Cap | $736.2M |
| Quality Rating | 5.4 |
| Intrinsic Value | $2.5 |
| 1Y Return | 215.3% |
| Revenue | $15.2M |
| Free Cash Flow | ($119.1M) |
| Revenue Growth | 89.9% |
| FCF margin | (785.7%) |
| Gross margin | (18.5%) |
| ROIC | (654.7%) |
| Total Debt to Equity | 32.2% |
Investment Thesis
Aeva Technologies, Inc. (AEVA) has a $736.2M market cap and 5.4 Quality rating, driven by 215.3% 1Y return and 89.9% revenue growth to $15.2M, yet intrinsic value of $2.5 highlights risks with $119.1M FCF and 785.7% FCF margin. Negative 18.5% gross margin and 654.7% ROIC contrast 32.2% debt to equity, providing investment opportunities analysis in 4D lidar for automotive software.
This stock illustrates high-momentum plays with fundamental gaps.
Key Catalysts
- Stellar 215.3% 1Y return captures sector hype.
- 89.9% revenue growth signals rapid adoption.
- Manageable 32.2% total debt to equity aids funding.
Risk Factors
- Heavy FCF burn of $119.1M and negative margins.
- Poor ROIC of 654.7% reflects high capital needs.
- Negative gross margin of 18.5% pressures profitability.
Stock #6: Cerence Inc. (CRNC)
| Metric | Value |
|---|---|
| Market Cap | $492.0M |
| Quality Rating | 5.5 |
| Intrinsic Value | $29.3 |
| 1Y Return | -16.3% |
| Revenue | $251.8M |
| Free Cash Flow | $46.8M |
| Revenue Growth | (24.0%) |
| FCF margin | 18.6% |
| Gross margin | 72.7% |
| ROIC | (2.8%) |
| Total Debt to Equity | 144.1% |
Investment Thesis
Cerence Inc. (CRNC), with $492.0M market cap and 5.5 Quality rating, generates $251.8M revenue and $46.8M FCF despite 24.0% growth and -16.3% 1Y return, with intrinsic value $29.3 suggesting upside. 72.7% gross margin, 18.6% FCF margin, and 144.1% debt to equity frame its AI voice tech role in autos for this stock watchlist.
Balanced metrics offer mid-cap educational depth.
Key Catalysts
- Positive $46.8M FCF and 18.6% margin show cash positivity.
- Strong 72.7% gross margin supports AI software scalability.
- Attractive intrinsic value of $29.3 vs. current pricing.
Risk Factors
- Revenue decline of 24.0% indicates competitive pressures.
- Negative ROIC of 2.8% questions returns efficiency.
- High 144.1% debt to equity elevates refinancing risks.
Stock #7: Arbe Robotics Ltd. (ARBE)
| Metric | Value |
|---|---|
| Market Cap | $140.2M |
| Quality Rating | 5.7 |
| Intrinsic Value | $1.3 |
| 1Y Return | -49.0% |
| Revenue | $667.0K |
| Free Cash Flow | ($37.7M) |
| Revenue Growth | (34.4%) |
| FCF margin | (5,651.6%) |
| Gross margin | (140.2%) |
| ROIC | (1,418.5%) |
| Total Debt to Equity | 26.2% |
Investment Thesis
Arbe Robotics Ltd. (ARBE) at $140.2M market cap with 5.7 Quality rating faces challenges like -49.0% 1Y return and intrinsic value $1.3, with $667.0K revenue, $37.7M FCF, and extreme negatives: 5,651.6% FCF margin, 140.2% gross margin, 1,418.5% ROIC. 26.2% debt to equity tempers risks in radar tech for automotive software value stocks.
Analysis spotlights deep-value speculative opportunities.
Key Catalysts
- Highest Quality rating 5.7 among small caps signals potential.
- Low 26.2% debt to equity provides flexibility.
- Radar tech alignment with ADAS growth trends.
Risk Factors
- Severe revenue drop of 34.4% and tiny $667.0K scale.
- Massive losses: $37.7M FCF, negative margins across board.
- Dismal ROIC of 1,418.5% indicates operational struggles.
Stock #8: NetSol Technologies, Inc. (NTWK)
| Metric | Value |
|---|---|
| Market Cap | $42.0M |
| Quality Rating | 5.2 |
| Intrinsic Value | $13.3 |
| 1Y Return | 36.9% |
| Revenue | $66.5M |
| Free Cash Flow | ($1,534.2K) |
| Revenue Growth | 7.7% |
| FCF margin | (2.3%) |
| Gross margin | 48.0% |
| ROIC | 6.2% |
| Total Debt to Equity | 22.6% |
Investment Thesis
NetSol Technologies, Inc. (NTWK) closes the list with $42.0M market cap, 5.2 Quality rating, 36.9% 1Y return, and intrinsic value $13.3 indicating undervaluation. $66.5M revenue grows 7.7%, but $1,534.2K FCF yields 2.3% margin; 48.0% gross margin and 6.2% ROIC pair with 22.6% debt for leasing software insights in automotive finance.
Micro-cap profile educates on steady growers.
Key Catalysts
- Positive 36.9% 1Y return amid small-cap volatility.
- Healthy 48.0% gross margin and 6.2% ROIC.
- Low 22.6% debt to equity supports stability.
Risk Factors
- Negative FCF of $1,534.2K despite revenue scale.
- Modest 7.7% growth trails high-flyers.
- Small $42.0M cap amplifies liquidity risks.
Portfolio Diversification Insights
These 8 best stocks cluster in automotive software, with ADSK and STZ providing large-cap stability (tech/consumer goods), while LIDR, WRD, AEVA, CRNC, ARBE, and NTWK offer small/mid-cap exposure to lidar, autonomy, voice AI, radar, and leasing tech. Sector allocation leans 75% toward high-growth auto innovators (negative FCF common) and 25% mature cash generators, reducing correlation risks—e.g., ADSK's design tools complement LIDR/AEVA's sensors. Pair high-ROIC leaders like ADSK 21.3% with growth bets like WRD (92.2% rev growth) for balanced portfolio diversification in undervalued stocks.
Market Timing & Entry Strategies
Consider entry during sector dips, such as post-earnings volatility in auto OEMs or when macro rates ease to aid debt-heavy names like STZ/CRNC. Monitor ROIC improvements and revenue inflection for small caps (e.g., AEVA's 89.9% growth); use Value Sense screeners for intrinsic value thresholds. Dollar-cost average into quality leaders like ADSK amid 1Y pullbacks, watching FCF trends for speculative plays—educational framing for market timing in volatile automotive software.
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FAQ Section
How were these stocks selected?
These 8 best stock picks were chosen via Value Sense's AI-driven screener focusing on intrinsic value, quality ratings, ROIC, and automotive software themes from curated watchlists, emphasizing undervalued opportunities across market caps.
What's the best stock from this list?
Autodesk (ADSK) leads with the top 7.0 Quality rating, 21.3% ROIC, and 91.3% gross margin, offering the strongest fundamentals among these top stocks to buy now for balanced risk-reward.
Should I buy all these stocks or diversify?
Diversify across large-caps like ADSK/STZ for stability and small-caps like WRD/AEVA for growth; this collection supports portfolio diversification but analyze via Value Sense tools for personal fit.
What are the biggest risks with these picks?
Key risks include high debt (e.g., STZ 133.3%), negative FCF/margins in growth stocks (e.g., ARBE's 1,418.5% ROIC), and revenue volatility—common in automotive software per Value Sense data.
When is the best time to invest in these stocks?
Target entries on intrinsic value discounts, sector corrections, or positive revenue/ROIC shifts; use backtested screeners for timing in this stock watchlist.