CSSEN - Rule Of 40 For SaaS Companies - Part 3 Valuation

• In this series, we have been looking at SaaS companies who pass the Rule of 40, a rule of thumb balancing sales growth and profitability.
• Rule of 40 stocks have outperformed the broader indices and IT benchmarks over the last 15 years, as have stocks in our All Software Stocks universe.
• In this piece, we breakdown a popular method for estimating relative valuation of SaaS companies to potentially find any undervalued stocks in this very richly valued arena.
• The performance results of Rule of 40 stocks based on this valuation method may (or may not) surprise you.
• I provide the current Rule of 40 stocks in our universe, based on valuation groups.

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