Clouded Judgement: SaaS Multiple Compression & Earnings Season Risk in Rising Rate Environment

This article analyzes the bifurcation of SaaS valuation multiples in early 2022, documenting how high-growth software companies still trade at elevated multiples (49% above pre-COVID highs) while overall medians have compressed. The author forecasts Q4 earnings will punish companies with elevated multiples that fail to deliver exceptional results, distinguishing contenders from pretenders as interest rate hikes erode ZIRP-driven valuations.