Stay selective is what the analysts are now saying relative to tech stock valuations... Aivars Lode
Jefferies Equity Research: Stay Selective within the Space.
High growth software valuations are now trading above terminal M&A multiples, suggesting we still have more room for multiple contraction. We expect that the short-term correction will continue given multiples remain elevated even with the recent correction. We would avoid the 15-20x multiple names until we see a broader pullback. We favor platform names with attractive growth and reasonable valuations like MSFT, CRM, INTU, SPLK, and PANW. We also favor names like SAIL and VRNS that have the potential for rev. reacceleration over the next yr.
Jefferies Equity Research: Stay Selective within the Space.
High growth software valuations are now trading above terminal M&A multiples, suggesting we still have more room for multiple contraction. We expect that the short-term correction will continue given multiples remain elevated even with the recent correction. We would avoid the 15-20x multiple names until we see a broader pullback. We favor platform names with attractive growth and reasonable valuations like MSFT, CRM, INTU, SPLK, and PANW. We also favor names like SAIL and VRNS that have the potential for rev. reacceleration over the next yr.
Always great work, Aivars!
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