- 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.
For further details see:
The Rule Of 40 For SaaS Companies, Part 6 - Moving Past The Rule Of 40 With The 'SaaS Scorecard' To Beat R40 Stocks