SaaS companies valuation

Wanted to know which are the specific metrics that are relevant for SaaS companies and how valuation models and financial modelling changes compared to an industrial company.

I understand that it's all based on users, subscribers and scalability but are there any other things to take into account?

4 Comments
 
Funniest

General formula is to take the sum of the two greatest of (I) equity of consensus 2028 earnings times 1,000, (ii) enterprise value of consensus 2028 sales adjusted upwards for newfound markets times 100, (iii) enterprise value of clicks times one thousand plus subscribers times one hundred million times 100 years per subscriber, or (iv) equity of 10 billion

If it’s a public company and you come up below the stock price using this method (which you generally will) - it’s because you aren’t giving enough credit to management or synergies from future deals

 

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