Joseph Floyd
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Q3 2014 Public SaaS Update

9/30/2014

 
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Update since last quarter:
  • Multiples have compressed 10 - 20% across the board
  • SaaS Stars like Palo Alto Networks and Zendesk look undervalued given growth and S&M efficiency
  • Some SaaS and Steady stocks look potentially undervalued like Medidata, Paylocity and Opower
  • 9/18/2014 - SAP acquired Concur for $8.3B representing 12.4x LTM Revenue; this is a good reminder that M&A provides a floor for SaaS stocks
  • Emergence S&M Efficiency added as a new metric in the comps analysis. S&M efficiency is calculated as ((Current Quarter Revenue - Revenue from 2 Quarters Ago) * Gross Margin * 2 ) / Last 2 Quarters of S&M Expense
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