SaaS stocks continued to plunge in this second quarter of the year. The E-Spring index fell by around 35 % in this quarter alone.
The second quarter of 2022 has seen a confirmation of the fall in public SaaS companies’ valuations. Financial markets have lived to the rhythm of the central banks’ interest rate hike announcements and record inflation. Over the last twelve months, our index has decreased from 13.42x (EV/Sales) down to 6.60x, which represents a 51% decrease. We also observe a 35% decline in this quarter alone. With the unstable environment, investors are taking refuge in safe havens and shying away from riskier assets, such as technology stocks. Crypto assets holders are in the best position to confirm this…
Index 2022 removals and additions
In the last three months, two companies in our index, Medallia Inc and Mimecast Ltd have been acquired by private equity funds, Thoma Bravo and Permira respectively. We have therefore decided to replace them with UK-based software editor The Sage Group and GK Software, a German retail software provider.
| Name | Country | Market Cap (€) | EV/Sales 2022 | EV/EBITDA | P/E 2022 |
| Adobe Inc. | US | 164 Bln | 9.6x | 19.4x | 26.9x |
| Alteryx, Inc. | US | 3.15 Bln | 4.3x | – | – |
| Anaplan, Inc. | US | 9.16 Bln | 15.8x | – | – |
| AppFolio, Inc. | US | 3.02 Bln | 6.6x | – | – |
| Atlassian Corporation Plc | AU | 45.5 Bln | 17.0x | 69.8x | 111.0x |
| ATOSS Software AG | DE | 962 Mio | 8.4x | 29.1x | 50.4x |
| ATTRAQT Group plc | UK | 58.3 Mio | 1.9x | 24.3x | – |
| Avalara, Inc. | US | 5.92 Bln | 6.6x | – | – |
| Avast plc | CZ | 6.23 Bln | 7.2x | 14.5x | 19.4x |
| AVEVA Group plc | UK | 7.86 Bln | 6.2x | 56.6x | – |
| BlackLine, Inc. | US | 3.77 Bln | 7.4x | 97.6x | – |
| Datadog, Inc. | US | 28.7 Bln | 18.1x | – | 119.0x |
| DocuSign, Inc. | US | 11 Bln | 5.4x | – | – |
| Dynatrace, Inc. | US | 10.8 Bln | 12.0x | 91.6x | – |
| Elastic N.V. | US | 6.13 Bln | 7.1x | – | – |
| Everbridge, Inc. | US | 1.05 Bln | 3.0x | 38.3x | 95.1x |
| GitLab Inc. | US | 7.5 Bln | 27.5x | – | – |
| GK Software SE | DE | 293 Mio | 1.9x | 9.4x | 20.6x |
| HubSpot, Inc. | US | 13.7 Bln | 7.9x | 63.3x | 116.1x |
| Matterport, Inc. | US | 986 Mio | 2.8x | – | – |
| Nemetschek SE | DE | 6.67 Bln | 8.6x | 26.1x | 40.7x |
| New Relic, Inc. | US | 3.2 Bln | 4.0x | – | – |
| PagerDuty, Inc. | US | 2.08 Bln | 6.9x | – | – |
| Paycom Software, Inc. | US | 15.5 Bln | 12.0x | 30.0x | 50.3x |
| salesforce.com, inc. | US | 157 Bln | 6.2x | 53.3x | 113.7x |
| ServiceNow, Inc. | US | 91 Bln | 12.4x | 39.6x | 63.8x |
| Sidetrade SA | FR | 173 Mio | 4.1x | 39.9x | 80.6x |
| Smartsheet Inc. | US | 3.89 Bln | 6.7x | – | – |
| Splunk Inc. | US | 13.6 Bln | 5.9x | – | – |
| TeamViewer AG | DE | 1.75 Bln | 3.6x | 7.3x | 10.9x |
| The Sage Group plc | UK | 7.49 Bln | 3.5x | 14.6x | 24.0x |
| UiPath Inc. | US | 9.46 Bln | 9.1x | – | – |
| Unity Software Inc. | US | 10.4 Bln | 7.9x | – | – |
| Veeva Systems Inc. | US | 29.3 Bln | 15.3x | 53.2x | 71.8x |
| Wix.com Ltd. | Other | 3.56 Bln | 2.1x | 23.9x | – |
| Workday, Inc. | US | 33.9 Bln | 6.5x | – | – |
| Workiva Inc. | US | 3.28 Bln | 6.1x | – | – |
| Yext, Inc. | US | 564 Mio | 1.2x | – | – |
| Zendesk, Inc. | US | 8.72 Bln | 5.2x | 51.4x | 94.6x |
| Zuora, Inc. | US | 1.1 Bln | 2.9x | – | – |
| Median | 6.6x | 38.3x | 63.8x |
Capital IQ S&P data
Index background
Our basket is of course partial and has no intention to reflect perfectly the entire SaaS Public landscape. Our goal is to give an outlook of the market with a more balanced index of what is available with the US Nasdaq SaaS index. More than 100 Public SaaS companies are available. Here, we focus on European-born leaders like Avast, Datadog, Elastic, Talend, TeamViewer, Zendesk, …
At E-Spring, we like to keep an eye on the SaaS Public companies. The market data gives good insights when we do a private SaaS business valuation. In some ways, it’s always connected to the market. It shows the trends and the confidence in the sector. Who are the champions of the league. So, we decided to construct our own SaaS index of 40 companies that we selected as being as much as possible representative of the SaaS B2B market, keeping the right balance between the US and Europe (European-founded public SaaS companies).
For this outlook, we choose a quarterly report to keep a mid-term view of the market. As much as possible we will keep the same basket but feel free to interact with us to enrich this exercise. We hope it will be helpful in these particular times.
Do you have questions regarding SaaS business valuation? Contact us.
