WDAY - With value rotation stabilizing Mizuho finds bargains in cloud software stocks

A growth-to-value rotation has meant that software-as-a-service names have underperformed so far in 2021, Mizuho notes - but adds that rotation has stabilized a bit. And that means that SaaS valuations look more attractive (especially as they move toward a historical support level of a rolling two-year average). Average EV/Next-12-months revenue multiples have compressed nearly three turns, about 17% year-to-date, the firm says. But that multiple has has found support at the rolling two-year average level over the past four years. And it notes the group roughly approached that two-year average in December 2018, when the Fed announced planned rate hikes for 2019 - a similar dynamic to rate action in the first quarter this year. And after the year of disruption from the pandemic, Mizuho's checks show that enterprises look ready to advance strategic agendas through software investment - with spending indications on the rise and (for cloud payroll

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With value rotation stabilizing, Mizuho finds bargains in cloud software stocks