Software leader Alkami Technology (ALKT) recently found support at its latest buy point and is rebounding back into buy range. Alkami is one of the best stocks to buy and watch on Investor's Business Daily's Stock Spotlight screen.

The Plano, Texas-based company provides cloud-based online banking software for U.S. banks and credit unions. It targets the top 2,500 financial institutions, excluding the nine megabanks.

Alkami Technology is also a member of the IBD Breakout Stocks index.

Alkami offers services to financial institutions designed to enable them to grow, drive user engagement and improve operational efficiency. It also provides additional services such as fraud prevention and marketing.

In the latest quarter, reported on Oct. 30, Alkami earned 9 cents per share on sales of $85.9 million, year-over-year increases of 800% and 27%, respectively. The sales increase was in line with the past several quarters, while EPS growth ramped up.

"In the third quarter, we delivered continued outperformance on both our financial and operating metrics," said Chief Executive Alex Shootman in the news release. "We ended Q3 with 19.5 million live registered users, up 2.6 million compared to the prior-year quarter, and delivered again on new logos, add-on sales and renewals."

Shootman continued, "In the third quarter we signed nine new digital banking clients, including six credit unions and three banks. We also renewed 14 clients, with several clients extending to 2031 and adding an additional seven products to their portfolios."

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Stocks To Buy And Watch: Software Leader Rebounds

Following an Oct. 18 breakout move past a 36 entry in a consolidation base, Alkami stock rallied as much as 14.9% before hitting turbulence due to the company's earnings report. Shares then erased those gains over a two-day period, triggering the round-trip sell signal.

But now the stock is rebounding, bullishly finding support at the 10-week line and the previous buy point. Shares are in the 5% buy zone that runs up to 37.80, according to IBD MarketSurge analysis.

The stock's relative strength line hit a new high in early November, reiterating the software stock as a market leader. While it has eased in recent weeks, the line remains near those highs. The RS line measures a stock's price action vs. the S&P 500.

IBD Stock Checkup shows that Alkami stock shows a solid 96 out of a best-possible 99 IBD Composite Rating. That makes Alkami one of the best stocks to buy and watch right now.

Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on the Dow Jones Industrial Average, the stock market today and the best stocks to buy and watch.

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