Clouded Judgement

This article analyzes cloud software valuation multiples and operating metrics as of December 2021, highlighting a stark bifurcation between high-growth and low-growth software companies. High-growth software (>30% NTM growth) trades at 26.2x EV/NTM revenue with a median 119% Net Retention Rate, while the broader SaaS market shows median multiples of 12.3x with 24% NTM growth expectations. The data reveals that infrastructure software companies are accelerating while many Covid-boosted application software companies are decelerating, creating a premium valuation environment for durable, high-growth businesses.