Convequity on X
Software multiples have fallen further since our January report. As of 7 Oct 2026, 238 companies in our all-software watchlist have EV/Sales (NTM) data on Koyfin. The median is 3.1x, down from 3.7x in January. The average is 5.4x, down from 6.2x. The 25th percentile is 1.8x, down from 1.9x. The 75th percentile is 5.5x, down from 6.1x. 191 of the 238 (80%) trade below our 6.7x private equity floor. 113 trade below 3x. The Bessemer Cloud Index shows the same pattern. Its median is 4.7x, down from 5.1x in January. 46 of its 68 companies (68%) trade below 6.7x. The cheapest are $CXM at 0.9x, $SPT at 1.1x, $MNDY at 1.7x and $WIX at 1.8x. In our watchlist, only 21 companies trade above 10x. The most expensive are $PLTR at 44.5x, $CRWD at 42.4x, $NET at 38.6x, $PANW at 24.2x, $DDOG at 19.5x and $SNOW at 16.3x. Growth still earns a higher multiple. The 44 names expected to grow revenue 20%+ a year over 3 years have a median of 5.2x. The 85 names expected to grow under 10% have a median of 2.6x. Even for the faster growers, the 5.2x median is below the floor. The market is paying up for very few names. We think that is right. Many software companies have slowing growth, high costs and no clear AI strategy. We would not buy the sector, or a cloud index, on valuation alone. In software, we focus on the few companies rebuilding their products around AI, and our SaaS Survival Scorecard tests key SaaS names against the pressure from AI agents.
