cloudedjudgement.substack.com · 2021-05-07 · 1854d

Clouded Judgement

This article analyzes the May 2021 sell-off in cloud software stocks (10-20% declines), attributing it to expectations of rising interest rates rather than current rate movements, with current SaaS valuations still 27-41% above pre-COVID levels. The author provides comprehensive quarterly earnings data for 20+ SaaS companies, multiples analysis by growth cohort, and operating metrics benchmarks showing median NTM growth of 24%, gross margins of 74%, and net retention of 117%.

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Metrics in this report

10-Year Treasury Yield

1.5percent

As of May 2021, held steady range

CAC Payback Period

21months

median

Public SaaS companies

EV / NTM Revenue Multiple

14.4x

median

Broad SaaS market, May 2021

EV / NTM Revenue Multiple

14x

median

Pre-COVID baseline for comparison

EV / NTM Revenue Multiple

35.3x

median

Top 10 highest-valued SaaS companies

EV / NTM Revenue Multiple

22.5x

median

High-growth SaaS (>30% NTM growth)

EV / NTM Revenue Multiple

13.5x

median

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

EV / NTM Revenue Multiple

7.7x

median

Low-growth SaaS (<15% NTM growth)

Free Cash Flow Margin

8percent

median

Public SaaS companies

General & Administrative Spend

15percent of revenue

median

Public SaaS companies

Gross Margin

74percent

median

Public SaaS companies

LTM Revenue Growth

29percent

median

Public SaaS companies

NTM Revenue Growth

24percent

median

Public SaaS companies

Net Revenue Retention

117percent

median

Public SaaS companies

Operating Margin

-12percent

median

Public SaaS companies

Research & Development Spend

25percent of revenue

median

Public SaaS companies

Sales & Marketing Spend

43percent of revenue

median

Public SaaS companies