ACG Partners is a middle-market investment bank dedicated to SaaS (software as a service) companies. Its update in February included the following three charts:
Chart 1: The 100 stocks in ACG’s SaaS index traded at an enterprise value ratio up to 12x consecutive 12-month earnings in January 2020. By January 2021, trailing earnings, driven by COVID, were 22x, low interest rates and massive fiscal and monetary. stimulus. Now we go back to 12x.
Chart 2: The stocks of less profitable companies have fallen more than the stocks of more profitable companies. Of the 100 SaaS stocks in the index, the stocks of the less profitable 50 companies have fallen 29% annually, compared to a decline of just 10% for the more profitable 50. The message: investors want profits now .
Chart 3: The stocks of the companies with the strongest growth rose higher, but fell more. Of the 100 SaaS stocks in the index, the stocks of the 50 companies with the highest growth dropped 22% annually, compared to a decrease of 17% for the 50 with slower growth.
Notice the similarity between ACG Partners ’chart of nonprofit SaaS stocks and Goldman Sachs’ nonprofit tech index.
ACG Partners ’SaaS index comprises the 50 largest SaaS stocks by market cap, along with the next 50 high fliers by multiple earnings.
The 50 largest SaaS stocks by market cap in the index are: Adobe (NASDAQ: ADBE)Salesforce (NYSE: CRM)Service Today (NYSE: NOW)Atlassian (NASDAQ: TEAM)Snowflake (NYSE: SNOW)Working day (NASDAQ: WDAY)Autodesk (NASDAQ: ADSK)Blocks (NYSE: SQ)Palo Alto Networks (NASDAQ: PANW)Zoom (NASDAQ: ZM)Datadog (NASDAQ: DDOG)CrowdStrike (NASDAQ: CRWD)Veeva (NYSE: VEEV)Zscaler (NASDAQ: ZS)Okta (NASDAQ: OKTA)Cloudflare (NYSE: NET)DocuSign (NASDAQ: DOCU)HubSpot (NYSE: HUBS)ZoomInfo (NASDAQ: ZI)Paycom (NYSE: PAYC)Bill.com (NYSE: BILL)Confluent (NASDAQ: CFLT)Qualtrics (NASDAQ: XM)RingCentral (NYSE: RNG)Dynatrace (NYSE: DT)NortonLifeLock (NASDAQ: NLOK)PTC (NASDAQ: PTC)Fair Isaac (NYSE: FICO)Xero (OTCPK: XROLF)Zendesk (NYSE: ZEN)Ceridian (NYSE: CDAY)SentinelOne (NYSE: S)Bentley (NASDAQ: BSY)Paylocity (NASDAQ: PCTY)Coupa Software (NASDAQ: COUP)Dropbox (NASDAQ: DBX)Avalara (NYSE: AVLR)Asana (NYSE: ASAN)GitLab (NASDAQ: GTLB)Lunes.com (NASDAQ: MNDY)Lima9 (NASDAQ: FIVN)Procore (NYSE: PCOR)Elastic (NYSE: ESTC)Pagasystems (NASDAQ: PEGA)Smartsheet (NYSE: SMAR)New Relic (NYSE: NEWR)Anaplan (NYSE: PLAN)Workiva (NYSE: WK)Nutanix (NASDAQ: NTNX) at Freshworks (NASDAQ: FRSH).
The 50 other stocks in the index are: Tenable (NASDAQ: TENB)Black line (NASDAQ: BL)Qualys (NASDAQ: QLYS)Altair (NASDAQ: ALTR)Paycor (NASDAQ: PYCR)Squarespace (NYSE: SQSP)nCino (NASDAQ: NCNO)KnowBe4 (NASDAQ: KNBE)Wide (NASDAQ: AMPL)Jamf (NASDAQ: JAMF)Darktrace (OTCPK: DRKTF)Varonis (NASDAQ: VRNS)Alteryx (NYSE: AYX)Kinaxis (OTCPK: KXSCF)Sprout Social (NASDAQ: SPT)SailPoint (NYSE: SAIL)Q2 (NYSE: QTWO)Teaching (NYSE: INST)EngageSmart (NYSE: ESMT)Duck Creek (NASDAQ: DCT)Clear water (NYSE: CWAN)Pagerduty (NYSE: PD)Sprinklr (NYSE: CXM)Momentive (NASDAQ: MNTV)C3.ai (NYSE: AI)Olo (NYSE: OLO)JFrog (NASDAQ: FROG)EverCommerce (NASDAQ: EVCM)BigCommerce (NASDAQ: BIGC)Cost (NASDAQ: EXFY)Vimeo (NASDAQ: VMEO)Definitive Healthcare (NASDAQ: DH)Vertex (NASDAQ: VERX)Zuora (NYSE: ZUO)Everbridge (NASDAQ: EVBG)Disco (NYSE: BATAS)Docebo (NASDAQ: DCBO)Mix (NYSE: BLND)Ping Identity (NYSE: PING)Domo (NASDAQ: DOMO)WalkMe (NASDAQ: WKME)VTEX (NYSE: VTEX)Sumo Logic (NASDAQ: SUMO)Alkami (NASDAQ: ALKT)IntApp (NASDAQ: INTA)ForgeRock (NYSE: FORG)Yext (NYSE: YEXT)UserTesting (NYSE: USER)Enfusion (NYSE: ENFN)and Upland (NASDAQ: UPLD).
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