HCA SaaS update: Interest rate relief in November – a positive stock market development, but not seen in the Danish SaaS sector yet
As mentioned in the recent October newsletter, there was speculation by market analysts of a year-end stock market rally. This came true in November driven by declining interest rates and rising expectations for massive cuts in 2024. The positive development was substantial in the global/US SaaS sector, now trading at 6.9x ARR (up from 6.2x ARR), but has not been seen in the Danish SaaS sector yet.
The ARR multiple across the Danish SaaS sector declined again (the median return across the Danish SaaS companies was approx. -2% in November). Combined with a higher reported ARR, the median P/ARR multiple declined to 3.0x ARR across the Danish SaaS sector. Low share liquidity is probably one of the main reasons, and it is not unusual to see a time lag effect in this segment.
Looking into the earnings season for Q3 2023, there were no big positive surprises across the Danish SaaS sector. In the global/US SaaS sector, the first positive signs have been observed based on net new ARR growth in Q3 2023.
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Disclaimer: HC Andersen Capital receives payment from some of the mentioned SaaS companies (Agillic, Impero, MapsPeople, OrderYOYO, and Penneo) for a Digital IR/Corporate Visibility subscription agreement. /Kasper Lihn 14:15, 7 December 2023.
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