BOSTON (TheStreet) -- Innovation ensures growth, which is why technology stocks remain investor favorites, especially now that the economy is expanding. Here are five software stocks with superlative fundamentals that are likely to beat indices in 2010.

5. Informatica

(INFA)

sells data-integration software.

The numbers

: Fourth-quarter profit increased 26% to $25 million, or 25 cents a share, as revenue grew 21% to $151 million. Informatica's operating margin remained steady at 23%. The company holds $464 million of cash and $201 million of debt.

The stock

: Informatica advanced 95% over the past year, outpacing the

Nasdaq

. The stock trades at a price-to-earnings ratio of 37, a premium to software peers. The stock has a PEG ratio of 0.7. A PEG ratio below 1 indicates undervalued shares.

4. Citrix Systems

(CTXS) - Get Report

designs delivery-infrastructure software, including remote-access programs.

The numbers

: Fourth-quarter profit soared 47% to $88 million, or 47 cents a share, as revenue climbed 8.5% to $451 million. The company's operating margin widened from 15% to 18%. Its balance sheet houses $600 million of cash and no debt.

The stock

: Citrix Systems more than doubled during the past 12 months, beating the Nasdaq. The stock trades at a price-to-earnings ratio of 43, a premium to software peers. It boasts a PEG ratio of 0.5, a 28% discount to the industry average.

3. Tyler Technologies

(TYL) - Get Report

sells information-management software to local governments. The company is scheduled to report fourth-quarter results today.

The numbers

: Third-quarter profit ascended 18% to $7.5 million, or 20 cents a share, as revenue stretched 8.3% to $74 million. The company's operating margin hovered at 17%. Tyler Technologies holds $7.9 million of cash and $2.1 million of debt.

The stock

: Tyler Technologies returned 56% in the past year, trailing the Nasdaq. The stock trades at a price-to-earnings ratio of 28, a discount to software peers. Its PEG ratio of 0.3 represents a 58% discount to the industry average.

2. Check Point Software Technologies

(CHKP) - Get Report

designs Internet-security programs.

The numbers

: Fourth-quarter profit increased 27% to $110 million, or 51 cents a share, as revenue grew 25% to $272 million. The company's operating margin hit 48%. Its balance sheet contains $884 million of cash, translating to a quick ratio of 2.1, and no debt.

The stock

: Check Point Software Technologies climbed 51% over the past 12 months, lagging behind the Nasdaq. The stock trades at a price-to-earnings ratio of 20, a discount to software peers. The stock has a PEG ratio of 0.6.

1. Sybase

( SY) sells systems software.

The numbers

: Fourth-quarter profit rose 27% to $60 million, but earnings per share climbed 14% to 66 cents. Revenue ascended 8.7% to $332 million. The operating margin expanded from 26% to 30%. Sybase holds $1.2 billion of cash and $747 million of debt.

The stock

: Sybase rallied 60% in the past year, matching the gain of the Nasdaq. The stock trades at a price-to-earnings ratio of 24, a discount to software peers. The stock has a PEG ratio of 0.6.

-- Reported by Jake Lynch in Boston.