Down 20%+, These 3 Software Stocks Are Boosting Buybacks

Key Points

• With shares depressed from highs, three software stocks just announced significant buyback programs.
• These companies, both explicitly and implicitly, are expressing their views that investors undervalue their shares.
• After falling nearly 30%, analysts see +40% upside in Guidewire.

After seeing big-time declines in their share prices recently, three large software stocks just announced significant buyback programs. The combination of falling shares and new buybacks is often a signal that a firm sees its stock as undervalued.

Below, we’ll dive into the recent announcements surrounding these three names and decipher what management teams are saying to investors. Overall, the evidence suggests that all three companies believe their stocks could gain positive momentum. However, the degree to which this is clearly true varies. 

After 25%+ Drop, Okta Proclaims Undervaluation

First up is one of the world’s top names in cybersecurity, Okta NASDAQ: OKTA. On Jan. 5, the company announced the authorization of a $1 billion buyback program. This announcement comes as Okta shares have taken a serious tumble in the past eight months. Okta traded at its 52-week high near $127 in mid-May of 2025. As of the Jan. 9 close, the stock is down to approximately $92, having lost almost 28% of its year-to-date gains. In light of this fall, Okta’s reasoning for this buyback authorization makes sense.

Many companies announce buyback programs without explicitly providing any reasoning. In contrast, Okta directly stated its intentions, saying, “This program underscores Okta’s confidence in its business, conviction in its significant long-term opportunities, and view that its shares are undervalued.”

Okta is clearly using the authorization to take advantage of the sharp pullback in its shares. The company also appears well-positioned to execute: the $1 billion program equals about 6.1% of its roughly $16.4 billion market capitalization.

Veeva Announces First-Ever Buyback With Shares Down

Veeva Systems NYSE: VEEV is a healthcare technology stock that is up approximately 11% over the past 52 weeks. Veeva’s cloud-based software helps biotech and pharmaceutical companies manage their data and streamline processes. The software’s functionality extends all the way from the research and development phase to product commercialization.

The market has hit Veeva shares very hard over the past several months. After reaching a 52-week high near $306 in October 2025, shares are down over 21% to $240.

Uncoincidentally, Veeva announced the authorization of a $2 billion share buyback program on Jan. 5. This program is equal to approximately 5% of the firm’s $39.5 billion market capitalization, giving Veeva strong buyback capacity. Notably, this is Veeva’s first buyback authorization ever, signaling that the recent drop in its share price may have been a key impetus for this decision.

Veeva’s buyback program also lasts for only two years, meaning that the firm will need to repurchase stock at a somewhat brisk pace to use its full capacity. With over $6.6 billion in cash and short-term investments, and $1.35 billion in free cash flow over the last 12 months, Veeva is more than capable of fully executing the program.

Amid Near 30% Fall, GWRE Exhausts Buybacks and Reloads

Last up is Guidewire Software NYSE: GWRE. The company, which provides software to property and casualty insurance providers, has seen its shares soar in the past few years. In three years, shares are up more than 175%.

However, since hitting their all-time high near $262 in September of 2025, the stock has quickly moved in the wrong direction. Shares now trade near $185, representing a 29% fall from grace.

This may be why, on Jan. 8, Guidewire announced the authorization of a $500 million buyback program. This program is moderately sized, but meaningful, equal to around 3.7% of Guidewire’s $15.4 billion market capitalization.

Guidewire authorized its new buyback program after exhausting its previous one.

The company’s statement indicates that it spent $138.2 million on buybacks between Oct. 31, 2025, and Jan. 8, 2026.

This amount was equal to nearly 35% of its previous $400 million program, which it authorized more than three years ago. Saving such a large percentage of the company’s buyback capacity for such a long time indicates that it acted opportunistically in the past two months. Guidewire’s declining stock, the timing of its recent repurchases, and the timing of the new program strongly suggest it sees value in its shares.

Analysts Eye Big-Time Potential in Guidewire

The management teams at Okta, Veeva, and Guidewire are sending confident signals to investors through their buyback programs. Among this group, Wall Street analysts see the most upside in Guidewire, whose consensus price target near $270 implies that shares could rise 45%.