Software <\/a> as a service companies, modern software firms often referred to by the acronym “SaaS,” had a tough day in the public markets. The basket of companies, as tracked by Bessemer’s cloud index<\/a>, dropped 4.49% during regular trading hours.<\/p>\n The losses gave back some of the software industry’s recent gains, advances that had followed a sharp decline in the value<\/a> of their shares as concerns relating to a COVID-19-induced economy hit the richly valued cohort of companies hard; indeed, at one point earlier in the year, SaaS and cloud companies were down around 38% from the 2020 highs.<\/p>\n Those losses, however, largely proved transitory. A steep rally in SaaS and cloud shares<\/a> brought their decline from all-time highs (set earlier this year) to just about 10% yesterday afternoon. Then, today, the firms lost over 4%. This puts SaaS and cloud shares in between a correction and a bear market.<\/p>\n Earlier today, TechCrunch <\/a> covered a number of “green shoots” for software companies<\/a> relating to churn, and some back-of-the-napkin funding data for the month of April thus far. To see SaaS firms drop as sharply as they did right after rings of comedic timing.<\/p>\n The impact of today’s trading was varied. Atlassian <\/a> fell a modest 2.9%, Dropbox 3.3%, Zuora <\/a> 5.99% and Slack a sharp 9.54%.<\/p>\n But despite all the worries about churn<\/a> and changing sentiment<\/a>, SaaS companies are still richly valued compared to historical norms. How rich? Bessemer notes on its website<\/a> the companies it tracks in its index were valued at an enterprise value\/revenue multiple of 12.9x.<\/p>\n It’s kind enough that SaaS trades on a multiple of revenue, and not EBITDA; to see that revenue multiple sit comfortably above 10 is a gift. So far, however, a durable one. Investors have not lost their shine to SaaS shares, today’s trading notwithstanding.<\/p>\n In broader indices, the day’s damage was less severe, with the Dow Jones Industrial Average falling 2.67%, the S&P 500 falling 3.07% and Nasdaq Composite dropping 3.48%.<\/p>\n<\/div>\n
![\"NYSE](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2020\/04\/GettyImages-1213764552-1.jpg?w=730&crop=1\")
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Alex Wilhelm<\/p>\n
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Alex Wilhelm<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
Software as a service companies, modern software firms often referred to by the acronym “SaaS,” had a tough day in the public markets. The basket of companies, as tracked by Bessemer’s cloud index, dropped 4.49% during regular trading hours. The losses gave back some of the software industry’s recent gains, advances that had followed a sharp decline in … Continue reading Software companies give back ground after an impressive rebound<\/span><\/a> Continue Reading →<\/span><\/a><\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,22,54],"tags":[],"class_list":["post-5635","post","type-post","status-publish","format-standard","hentry","category-english","category-united-states","category-wire"],"yoast_head":"\nSoftware companies give back ground after an impressive rebound - Business<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/ipsnews.net\/business\/2020\/04\/22\/software-companies-give-back-ground-after-an-impressive-rebound-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Software companies give back ground after an impressive rebound - Business\" \/>\n<meta property=\"og:description\" content=\"Software as a service companies, modern software firms often referred to by the acronym “SaaS,” had a tough day in the public markets. 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