Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! How Far Have We Fallen?? What a few weeks / months for cloud software. While it’s felt like the world has fallen off a cliff (and we have), where we stand today really isn’t that crazy. The 5 year average cloud software multiple (pre covid, so 2015-2020) was 7.8x NTM revenue. The current median is 7.4x. So despite the MASSIVE correction (many companies down 50-80%), we’re only 5% below what I would consider a “normal” multiple. I think everyone would agree it’s hard to feel “normal” right now. Now, I’d argue that the quality of the cloud software basket today is higher than what it was from 2015-2020. So comparing the LT average to current median isn’t totally apples to apples. I took a swag at what the LT average would be if it included companies that are public today but not back then (the list is long), but we’d still only be ~10-15% below the long term average. It can be a bit jarring thinking about this given it sure feels like we should be well below the long term average.
Thank you Jamin for your weekly analysis. Do you have the ability to show how many companies that have reported 1Q earnings have lowered their expectations? Started to see some anecdotal earnings comments around this while Microsoft made the case for continuing as expected or better.
I find these summaries very helpful to gaining/keeping perspective. Thank you so much for your work.
Your tables do have so many columns that I'd find it most helpful if alternating rows were shaded to aid in keeping data visually aligned with the stock name.
Thank you Jamin for your weekly analysis. Do you have the ability to show how many companies that have reported 1Q earnings have lowered their expectations? Started to see some anecdotal earnings comments around this while Microsoft made the case for continuing as expected or better.
Thank you @Jamin !
I find these summaries very helpful to gaining/keeping perspective. Thank you so much for your work.
Your tables do have so many columns that I'd find it most helpful if alternating rows were shaded to aid in keeping data visually aligned with the stock name.