FPE Capital says software valuations favor durability over headline growth post-SaaSpocalypse
XLK•FPE Capital analysis of listed business application software groups
FPE Capital says its analysis of 27 listed business application software groups finds durability now drives valuation premiums more than growth.
- Durability explains 63% of variance in ARR multiples, versus 29% for consensus 2027E revenue growth.
- Median EV/implied ARR: 8.1x for higher durability, higher growth; 4.9x for higher durability, lower growth; 2.8x for low durability.
- Higher durability, higher growth cohort down 3% year to date; low durability cohort down 27%, signaling sharper de-rating.
- The study flags weak durability-growth linkage, with a 0.28 correlation, suggesting the market prices “quality” as durability first.
