      cloudedjudgement.substack.com · 2021-05-14
      · 1847d
    

Clouded Judgement: SaaS Valuation Multiples Analysis (May 2021)

Despite recent market pullback, SaaS revenue multiples remain at historically elevated levels (13.2x median NTM), 17% above pre-COVID highs and 42% above Jan 2020 levels. The article analyzes quarterly earnings across major cloud software companies and benchmarks operating metrics (NRR, CAC payback, FCF margins) against valuation multiples, revealing significant dispersion between growth-adjusted valuations. The analysis suggests substantial downside risk remains given the disconnect between high multiples and profitability metrics.

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

Metrics in this report

CAC Payback Period

22months

median

SaaS public company peer set

Free Cash Flow Margin

11percent

median

SaaS public company peer set

G&A as % of Revenue

18percent

median

SaaS public company peer set

Gross Margin

74percent

median

SaaS public company peer set

LTM Growth Rate

30percent

median

SaaS public company peer set

NTM Growth Rate

23percent

median

SaaS public company peer set

NTM Revenue Multiple

13.2x

median

Cloud software companies as of May 2021

NTM Revenue Multiple

20.6x

median

High-growth SaaS companies (>30% NTM growth)

NTM Revenue Multiple

12.1x

median

Mid-growth SaaS companies (15-30% NTM growth)

NTM Revenue Multiple

4.8x

median

Low-growth SaaS companies (<15% NTM growth)

NTM Revenue Multiple

18.0x

median

Cloud software companies as of January 2021 (peak of cycle)

NTM Revenue Multiple

9.5x

median

Cloud software companies as of January 2020 (pre-COVID)

Net Revenue Retention

118percent

median

SaaS public company peer set

Operating Margin

-13percent

median

SaaS public company peer set

R&D as % of Revenue

25percent

median

SaaS public company peer set

Sales & Marketing as % of Revenue

42percent

median

SaaS public company peer set