Are We Due for a SaaSacre?

The article analyzes SaaS valuation multiples using Meritech data, arguing that current EV/NTM revenue multiples of 13.8x are historically elevated and due for mean reversion toward the 5-10x range, implying 33-66% downside risk. It examines the declining explanatory power of the Rule of 40 metric in valuation and introduces growth-adjusted EV/R multiples as a normalized valuation metric that reveals both PE and VC buyers are paying similar risk-adjusted prices for growth.