Clouded Judgement

Real interest rates have risen sharply, causing a broad rotation in equity markets away from high-growth, long-duration software assets toward larger, FCF-positive businesses. The article analyzes the November 2021 cloud software selloff across ~90 tracked companies, providing detailed valuation multiples, operating metrics, and benchmarks showing how high-growth SaaS companies trade at significantly higher EV/NTM revenue multiples (52.6x median) versus the overall market (13.1x), despite negative operating and FCF margins.