Tomasz Tunguz Blog · 2020-09-22
· 2081d
Predicting SaaS Forward Revenue Multiples: Revenue Growth and Sales Efficiency as Key Drivers
Analysis of ~60 publicly traded SaaS companies reveals that forward revenue multiples are primarily driven by revenue growth (0.81 correlation) and sales efficiency (0.75 correlation), while profitability metrics are largely irrelevant. The study provides a linear regression formula to predict forward multiples within 20% accuracy based on these key metrics.
Metrics in this report
Formula Accuracy
20%
within range
forward multiple prediction margin of error
Revenue Growth Correlation
0.81correlation coefficient
linear regression
SaaS forward multiple prediction
SaaS Companies Analyzed
60count
approximately
publicly traded SaaS firms in dataset
Sales Efficiency Correlation
0.75correlation coefficient
linear regression
SaaS forward multiple prediction