SaaS Stocks with a Rule of 40 Score in comparison to valuation by Forward EV/S multiple. Rule of 40 balances revenue growth and profitability, using to compare companies at different stages of growth. EV/S multiple reflect only revenue expectations. Combining both metrics, you can understand how much investors are paying for high-quality growth. A company with >40% threshold - combining healthy growth with solid profitability. Undervalued: $ZM $GOOGL $ORCL $APP $MSFT $ADBE $AMZN $TDC Fairly valued: $AXON $NOW $FICO Overvalued: $PLTR $NET $CRWD $PANW $FROG $RBRK $SNOW For this ranking, I combined GAAP EBITDA Margin (TTM) with analyst-estimated NTM revenue growth. Selection criteria: software companies with >50% of revenue from subscriptions, EV >$1 billion, and GM >40%.
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