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.

4 metrics· Cited 0× in the knowledge base ·Open source ↗

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