TipRanks Smart Growth Portfolio #31: Ramp Factor
Dear Investors,
Welcome to the 31st edition of the Smart Growth Portfolio and Newsletter.
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Portfolio News
❖ Applied Digital (APLD) stock surged after two major price-target upgrades, pushing its year-to-date gain close to 230%. Compass Point raised its PT on the stock from $13 to $30 while maintaining a “Buy” rating, citing the full leasing of the Forge 1 facility, increased visibility into future revenue streams with CoreWeave, and conviction in the company’s high-performance computing ramp-up. This came after Roth Capital’s price-target hike to $43 – a Street high – from $24, also maintaining a “Buy.” Roth said the new price reflects Applied Digital’s progress in signing high-performance computing colocation agreements, upside potential from technical fit-out revenues, and expectations for another major colocation deal at the new 280MW Harwood site by year-end or early 2026.
Applied Digital is slated to open the Smart Growth Portfolio’s upcoming earnings season with its fiscal Q1 2026 report scheduled for October 9.
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❖ In contrast, Monday.com (MNDY) declined despite strong analyst support. Wells Fargo initiated coverage with a “Buy” rating and a $260 price target, implying a potential upside of more than 43%. The firm’s positive outlook is based on MNDY’s solid positioning to benefit from AI-driven growth in the software sector, particularly through its strong competitiveness in the AI-driven SaaS market. Wells Fargo also views rising institutional ownership as confirmation of growing investor confidence despite recent stock pressure. Wells Fargo’s move follows Citi’s price-target increase to $332 from $326 while maintaining a “Buy” rating. Citi said it is encouraged by the company’s recent product announcements, including a transition to an AI-powered work execution platform, new AI-driven capabilities such as no-code AI building blocks, increased platform scalability with mondayDB improvements, and enhanced business workflow tools that enable complex, cross-team automation and reporting. This evolution in Monday.com’s product suite is seen as a key catalyst supporting future growth and valuation upside.
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❖ Itron (ITRI) has secured a $750 million credit facility, which provides the company with a strong financial cushion to support day-to-day operations and growth plans until 2030. This flexible loan – maturing in 2030 with provisions for early maturity – can help Itron manage working capital, fund general corporate needs, and back letters of credit. With this deal, Itron strengthens its financial position and expands its resources for growth initiatives and M&A activity.
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❖ ACM Research (ACMR) stock has soared to its highest level since 2021, with a year-to-date gain nearing 190%, driven by its Chinese subsidiary reporting a 34% year-over-year increase in backlog. This substantial backlog growth indicates strong demand for ACMR’s semiconductor manufacturing equipment, boosting confidence in the company’s market position. Following this, Roth Capital raised its price target to $50 from $40, maintaining a “Buy” rating and projecting mid- to high-teens revenue growth in upcoming quarters.
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❖ Micron’s (MU) goes ex-dividend today, with the payment date scheduled for October 21.
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Under Review
We are placing Clear Secure (YOU) under review following its underperformance over the past two weeks.
The stock dropped by about 18% from its recent peak on September 22 despite several positive news items and announcements. YOU expanded CLEAR+ enrollment to travelers from 40 additional countries across Europe, Asia, and the Americas, enabling international visitors to expedite airport security screening at U.S. airports through the company’s network of over 150 lanes operating at 60 airports nationwide. Additionally, Clear announced an eGate pilot program designed to provide scalable security solutions ahead of the World Cup and America’s 250th-anniversary celebration.
Earlier, the company revealed a new identity verification solution developed in partnership with DocuSign. This solution leverages Clear’s B2B secure identity platform, CLEAR1, and its biometric verification technology to make it easier and more secure for people to verify their identity directly within the DocuSign agreement experience. The partnership aims to address the challenge of maintaining security amid the growing threat of identity fraud, driven by generative AI’s rising abilities.
Clear Secure’s broad push into finance, real estate, healthcare, and automotive verticals showcases its ability to leverage biometric identity solutions across diverse industries, unlocking new revenue opportunities. Together with sprawling partnerships – recent examples include Fidelity National Financial, Nordic, Hackensack Meridian Health, and Snappt – these strengthen its long-term potential. However, investors need to see at least some of it reflected in YOU’s bookings growth when it reports Q3 results on November 17.
The recent stock weakness may be driven in part by profit-taking after a ~55% rally from mid-July to mid-September and exacerbated by worries about the government shutdown impacting Clear’s existing operations and delaying new contracts and regulatory approvals. If these concerns are quickly dispelled, this could lead to a relief rally in the stock – potentially even producing a short squeeze. YOU’s short interest is high at about 21% of its float – one of the highest in the software sector – reflecting entrenched negative investor sentiment.
While the company’s fundamentals remain intact and its expansion into various verticals is expected to continue driving growth, investors – along with some analysts like Wells Fargo – question its government-dependent business model at a time when the Trump administration continues to send conflicting signals regarding federal spending plans.
Wells Fargo recently maintained a “Sell” with a price target implying a ~20% downside, citing concerns about the company’s business challenges, competitive risks, and financial outlook. In contrast, D.A. Davidson initiated coverage with a “Buy” rating and a Street-high PT of $45, which signals an upside of nearly 44%, citing optimism about Clear Secure’s growth potential, expanding partnerships, and the increasing adoption of its biometric identity solutions.
With analyst opinion mixed and the stock firmly in oversold territory, we will be keeping YOU under a magnifying glass for a while.
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This Week’s Top Growth Pick: LiveRamp Holdings (RAMP)
LiveRamp Holdings is a data collaboration and identity infrastructure company enabling organizations to securely connect, activate, and measure customer data across platforms. Its software powers use cases like audience targeting, measurement, data clean rooms, and omnichannel personalization – all without compromising privacy. Built on a neutral, interoperable identity layer, LiveRamp’s platform helps brands, publishers, and data owners work together in a fragmented digital ecosystem increasingly defined by privacy regulation and the deprecation of third-party cookies. With integrations across hundreds of platforms and partners, LiveRamp acts as connective tissue between siloed environments, first-party data, and measurement systems. As data-driven marketing shifts from surveillance to consent, LiveRamp is positioned not just as a utility for marketers – but as foundational infrastructure for the next phase of responsible data collaboration.
Source: LiveRamp Investor Day 2025 presentation
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Identity Shift
LiveRamp began as a data onboarding pioneer, helping brands connect offline customer records to digital environments. The company’s transformation into a full-scale data collaboration platform has been driven largely by the strategic pivot of the past five years. Over this period, RAMP progressed from a cookie-reliant utility into critical infrastructure for privacy-safe, cross-platform data connectivity – an evolution shaped by product reinvention, ecosystem expansion, and growing alignment with global data protection norms.
A key milestone came with the rollout of RAMP’s privacy-centric data collaboration stack, anchored by its cloud-native identity graph1 and embedded data clean room2 capabilities. These tools enable brands and publishers to connect and activate first-party data across siloed environments while preserving consumer consent and data controls. Unlike traditional onboarding methods, this model supports secure analytics, attribution, and activation without exposing raw data – a capability that has become central as third-party cookies are phased out.
Since 2020, LiveRamp has aggressively expanded platform interoperability through native integrations with all major cloud hyperscalers – including AWS, Google Cloud, Microsoft Azure, and Snowflake – as well as marketing and commerce ecosystems like Meta, Amazon Ads, and The Trade Desk. These integrations allow customers to deploy identity resolution, measurement, and collaboration capabilities inside their existing data stacks, minimizing friction and accelerating adoption.
The company has also invested in vertical expansion. Its platform is now widely used in retail media networks, financial services, healthcare, and travel – industries that require strict data controls but benefit from collaborative analytics. These use cases helped fuel adoption of RAMP’s data clean room, Safe Haven, and activation tools across both advertisers and media owners.
LiveRamp has not pursued acquisitions in recent years, focusing instead on deepening its ecosystem partnerships and launching high-margin, usage-based products that drive monetization beyond traditional subscriptions. The combination of first-party identity infrastructure, consent-first design, and flexible deployment has redefined LiveRamp’s role from service provider to enabler of the next-generation data economy – one built around trust, interoperability, and measurable outcomes.
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1 – Identity graph is a database that connects disparate identifiers (like emails, cookies, or device IDs) into unified customer profiles. It enables organizations to recognize and reach the same individual across devices and platforms.
2 – Data clean room is a secure environment where multiple parties can match and analyze data without exposing raw user information. Used for privacy-safe collaboration between brands, publishers, and platforms.
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Source: LiveRamp Investor Day 2025 presentation
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Ramp Up Strategy
LiveRamp runs on a simple premise – in a digital economy where customer data is fragmented, privacy-sensitive, and often locked away, someone needs to connect the pieces. The company has built itself into that connective layer, offering a platform that lets marketers, publishers, and commerce networks activate and measure data without breaking consent or compliance. Its architecture is structured around identity resolution, secure access, connectivity, and analytics, which together allow customers to unify data sets, collaborate with partners, and run campaigns across siloed environments.
The model is largely SaaS, with recurring contracts providing stability and visibility. Subscriptions account for over three-quarters of revenue, while Marketplace services – including the Data Marketplace – form a small but growing share. This recurring base gives LiveRamp a sticky profile, since identity and collaboration tools become embedded in marketing pipelines and are costly to replace.
What sets the business apart is its neutrality, interoperability, and distribution breadth. Unlike the closed ad platforms that keep data inside their own walled gardens,3 LiveRamp positions itself as a bridge rather than a competitor. Its clean room capabilities are built directly into the platform, avoiding the fragmentation that plagues standalone solutions. The company is also experimenting with usage-based pricing, currently piloted with around forty customers including one of the world’s largest quick-serve restaurant chains. This move is designed to lower barriers for midsized advertisers and data providers, potentially broadening adoption while improving monetization as data volumes grow.
Partnerships amplify this reach. LiveRamp integrates natively with AWS, Google Cloud, and Microsoft Azure, letting enterprises activate identity and collaboration workflows directly inside their existing cloud data environments. Its alliance with Snowflake is particularly important, enabling joint customers to analyze and activate data without moving it out of the Snowflake Data Cloud – a key advantage for privacy-sensitive sectors like healthcare and financial services. In advertising, LiveRamp has deep ties with Meta, Snap, Disney Advertising, Roku, and NBCUniversal, ensuring its identity and measurement tools work seamlessly across major media ecosystems. And it has recently expanded collaboration with The Trade Desk through Audience Unlimited, an AI-powered data marketplace designed to make curated, scored data segments cheaper and easier to access. Together, these partnerships broaden LiveRamp’s distribution, reduce customer friction, and strengthen its role as the neutral infrastructure layer in data-driven marketing.
The company is also expanding beyond its original strongholds in retail and consumer goods, applying its data collaboration playbook to healthcare, financial services, travel, and entertainment. These industries demand strict privacy controls but stand to benefit significantly from consent-based analytics. Meanwhile, management is positioning LiveRamp as infrastructure for the AI era, framing its identity and data pipes as essential inputs for how algorithms learn and how advertising evolves.
Policy adds another layer of support. The One Big Beautiful Bill fiscal package, passed in July 2025, restored immediate expensing of R&D and extended bonus depreciation. For a software company that invests heavily in product and platform modernization, this shift effectively subsidizes development spend and frees up cash to reinvest in growth.
The broader backdrop is equally favorable. Data collaboration and identity resolution sit within a market expanding at mid-teens rates, fueled by the demise of third-party cookies and the surge in first-party data strategies. LiveRamp controls only a small slice today, but its neutrality, interoperability, and integrated approach give it clear runway to take share in what is becoming one of the most critical layers of digital marketing infrastructure.
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3 – Walled gardens are closed digital ecosystems run by large platforms that restrict how data can be accessed or shared.
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Source: LiveRamp Investor Day 2025 presentation
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Unchained Runway
LiveRamp started fiscal 2026 on strong footing, with first-quarter results that once again outpaced both analyst estimates and internal forecasts. Revenue grew 11% year-over-year to $195 million, exceeding guidance by $4 million and marking the eighth straight quarter of topping Wall Street’s top-line expectations. Subscription revenue – which makes up roughly 76% of the business – increased 10%, while Marketplace and other revenue, about a quarter of the mix, grew 13% despite a brief integration hiccup in Data Marketplace. Usage-based subscription revenue surged nearly 40% as new pricing flexibility encouraged higher adoption.
The earnings profile showed even sharper improvement. Non-GAAP operating income rose 34% from a year earlier, driving a three-point margin expansion to a record 18%. GAAP profitability is still early-stage but moving in the right direction, with operating income of $7 million (versus a loss last year) and net income of $7.7 million (compared with a $7.5 million deficit a year ago). This was the fifth consecutive quarter of double-digit year-over-year growth in non-GAAP EPS, underscoring how operating leverage and efficiency programs are beginning to compound. Since Wall Street began issuing non-GAAP EPS estimates in 2021, LiveRamp has beaten expectations in every quarter except for a one-time miss during the Covid disruption – an unusually consistent record for a small-cap SaaS firm.
Momentum was visible across forward indicators. Annual recurring revenue climbed 5%, subscription net retention held at 104%, and remaining performance obligations rose 29% to $690 million, with current RPO up 14%. These trends confirm the durability of LiveRamp’s SaaS-like base and give confidence in sustained revenue visibility.
Margins continue to benefit from scale and cost discipline. Gross margin came in at 72%, down slightly from last year due to temporary cloud hosting expenses tied to platform modernization, but still comfortably in the 70s. Operating expenses rose just 2% year-over-year, a sharp contrast to 11% revenue growth, as the company benefited from offshoring and restructuring initiatives that are starting to yield operating leverage. Free cash flow was negative $16 million in the quarter due to seasonal shifts in working capital, yet management reaffirmed expectations for stronger free cash generation through the year – aided by tax changes in the One Big Beautiful Bill that restore immediate R&D expensing.
LiveRamp’s balance sheet is a standout feature. The company ended Q1 with $370 million in cash and equivalents and carries no debt – a rarity among growth-oriented SaaS businesses. This debt-free position gives it significant flexibility to reinvest in product and market share expansion without the drag of interest expense or refinancing risk. It also leaves room for capital return through share repurchases, which management has already begun to deploy.
Looking ahead, RAMP raised its full-year revenue guidance to $798-818 million, representing 7-10% growth, while reaffirming non-GAAP operating income guidance of $178-182 million. Both metrics suggest LiveRamp is on a clear path to sustained double-digit profitability alongside steady top-line expansion. Importantly, the revenue outlook landed modestly above analyst consensus, which had been clustered near the low end of the range – reinforcing confidence that the company’s momentum can outpace external expectations.
Source: LiveRamp Q1 FY26 Earnings Presentation
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Grossing Up
LiveRamp’s peer set spans a range of small to mid-cap SaaS providers, each reflecting different stages of subscription growth and margin expansion. The closest comps are Amplitude, a pure-play product analytics platform scaling toward profitability; EverCommerce, a vertical SaaS operator serving service-based SMBs with recurring software and payments revenue; Sprinklr, an enterprise platform for customer experience management and AI-driven engagement; and AppFolio, a property management SaaS that has already demonstrated operating leverage at scale. Together, these peers provide a balanced reference for evaluating how LiveRamp’s recurring model, margin trajectory, and growth runway compare within the broader SaaS landscape.
The past year has been volatile for software and data-as-a-service firms, with the AI advance initially driving skepticism about the industry’s future viability. As the year progressed, sentiment shifted toward macro and company-specific factors, with investors largely favoring large, profitable industry leaders or companies chasing attention with high-profile “next-tech” themes. LiveRamp, with its light news and analyst coverage and behind-the-scenes data-handling business, performed moderately well – in the green for the past 12 months, but underperforming the broad market. Compared to peers, RAMP’s stock came in at the middle of the pack, underperforming AppFolio and Amplitude while outperforming EverCommerce and Sprinklr.
In contrast, LiveRamp’s valuations are far below peer averages, despite its above-average growth metrics. The company’s trailing EBITDA margin expansion far surpassed all peers, and this trend is expected to continue, with only Amplitude slated to increase its gross income faster over the next year. Meanwhile, RAMP trades well below peer averages on trailing and forward non-GAAP P/E, EV/Sales, EV/EBITDA, and Price/Cash Flow ratios. The most striking is the company’s forward non-GAAP PEG, calculated in the range of 0.41 to 0.63 (depending on earnings growth forecast). Even at the high end, it is very low in both absolute terms and compared to peers – signaling a classic growth-at-a-reasonable-price (GARP) setup. This unwarranted discount amid consistent double-digit top-line growth should drive a re-rating higher.
On top of this, LiveRamp has been actively repurchasing its shares since 2011, when it initiated a buyback authorization. The most recent amendment came in August 2024, when the board increased the program by $200 million and extended it through 2026. As of the end of fiscal Q1 2026, LiveRamp had repurchased a total of $1.1 billion worth of shares under this authorization, retiring about 1.7% of total stock outstanding. Currently, $226 million remains available for buybacks. Management has emphasized that repurchases are the primary use of excess free cash flow going forward, underscoring that RAMP’s debt-free position allows it to both invest in growth and return capital.
Taken together, the valuation gap, consistent growth profile, and disciplined capital return strategy position LiveRamp as a rare small-cap SaaS firm with both resilience and room to catch up to peers.
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To Sum It All Up
LiveRamp offers a growth investment case built on connectivity, profitability, and mispricing. The company sits at the center of secular demand for privacy-safe data collaboration – enabling brands, publishers, and platforms to share and activate insights across siloed environments. Its SaaS model provides sticky recurring revenue, while partnerships with hyperscalers and ad-tech leaders broaden reach and strengthen adoption. Execution has been consistent, with operating leverage improving even as investment in AI-driven capabilities accelerates. Yet the stock trades at marked discounts to peers, despite margins and growth metrics that compare favorably within the small-cap SaaS landscape. That disconnect creates a classic GARP setup – investors pay modest multiples for above-average expansion. With a debt-free balance sheet and long runway in AI-driven marketing infrastructure, LiveRamp is a growth story still overlooked.
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Smart Growth Portfolio
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Disclaimer
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