TMSOF - The Rule Of 40 For SaaS Companies Part 6 - Moving Past The Rule Of 40 With The 'SaaS Scorecard' To Beat R40 Stocks

• Over the last few months, I’ve written a series of articles on software as a service (SaaS) firms and their stocks, and especially those that pass the Rule of 40.
• The Rule of 40 (R40) balances sales growth and profitability in hyper-growth SaaS companies, and we have found as a group these stocks have outperformed the broad market and software.
• The Rule of 40, like any hard rule, in excluding some stocks may miss those stocks with potentially more valuable characteristics than high sales growth and profitability.
• In this piece, we look at other factors that drive SaaS business performance, and their stock’s performance, to develop a new strategy I call the “SaaS Scorecard”.
• The “SaaS Scorecard” is presented for some SaaS stocks in the market today.

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