As always, the SaaS companies I follow most closely are at different stages in their life cycle. But not that different! The different levels of TTM revenue make for seemingly very different valuations when you compare it to market cap as in a PS ratio or EV/S ratio. But in the long run, if the businesses continue to dominate in their respective industries and specialties, they’ve been on similar trajectories toward billion dollar revenue run rates, and some already beyond.
That’s painting with a broad brush! I admit. Yet sometimes it pays to take a step back and survey the landscape. Here are the market caps I have for some of my favorites. I typically use fully diluted share count, so your number could be off by a few billion. (What’s a few billion among friends?)
Snowflake 118b (technically not SaaS)
Glancing at this landscape and thinking about the long term led me to buy back into Zscaler with a small position. Zscaler looks very, very expensive based on whatever multiple you might look at, but I think it’s going to steadily grow into it and beyond. If you’re valuation-inclined like I am, you have to admit that there aren’t any absolute bargains on a PS basis right now.
This also makes me glad to build up Monday and Amplitude, as I think they are simply earlier in their journeys than these others. Time will tell.
Of course, it’s the company performance that makes me interested in these companies. The above is simply a check in on the current prices. I believe that if you think long term, they make sense.