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A look back at Q3 '21 public cloud software earnings

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  1. HotPants
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    This analysis includes some very interesting metrics on valuing publicly traded cloud companies. It also has a chart that shows how high growth cloud companies have become 2-3 times more expensive...

    This analysis includes some very interesting metrics on valuing publicly traded cloud companies.

    It also has a chart that shows how high growth cloud companies have become 2-3 times more expensive since the pandemic started.

    Back in an earlier analysis the author listed three possible causes for this.

    1. Digital Transformation Expectations: There is an expectation that digital transformations will accelerate, pulling forward growth
    2. The Money Supply: Interest rates are near zero meaning the attractiveness of equities vs bonds has skyrocketed
    3. Relative attractiveness of SaaS / Cloud businesses: there is reason to believe the sector has actually positively benefited from Covid

    All three of these reasons no longer hold true, yet multiples are still historically high.

    I personally think there is a fourth reason that still holds true... the meme investors

    1 vote