LiveRamp’s 18.7% return over the past six months has outpaced the S&P 500 by 11.8%, and its stock price has climbed to $29.59 per share. This run-up might have investors contemplating their next move.

Is now the time to buy LiveRamp, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Despite the momentum, we're cautious about LiveRamp. Here are two reasons why we avoid RAMP and a stock we'd rather own.

Why Is LiveRamp Not Exciting?

Started in 2011 as a spin-out of RapLeaf, LiveRamp (NYSE:RAMP) is a software-as-a-service provider that helps companies better target their marketing by merging offline and online data about their customers.

1. Long-Term Revenue Growth Disappoints

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, LiveRamp grew its sales at a 12.9% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds.

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect LiveRamp’s revenue to rise by 7.7%, a deceleration versus its 12.9% annualized growth for the past three years. This projection is underwhelming and implies its products and services will see some demand headwinds.

Final Judgment

LiveRamp’s business quality ultimately falls short of our standards. With its shares beating the market recently, the stock trades at 2.5× forward price-to-sales (or $29.59 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're fairly confident there are better stocks to buy right now. We’d recommend looking at a top digital advertising platform riding the creator economy.

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