Solid article! I think everything is fair, but I just don't agree with the SaaS multiple. I think it should be much higher given the small amount of TAM that they've actually conquered to this point. If they were at 20% total TAM, then I'd say that multiple should come down, but there's a lot of green pasture ahead.
Thanks! Previously I used 8x EV/S for SaaS, but as SaaS multiples overall keep compressing and Peloton keeps burning cash, I'm trying to be more conservative. Agree with your point re TAM, the question is can they grow and at what cost (2-3x LTV/CAC cited by Barry doesn't sound sexy to me)
Solid article! I think everything is fair, but I just don't agree with the SaaS multiple. I think it should be much higher given the small amount of TAM that they've actually conquered to this point. If they were at 20% total TAM, then I'd say that multiple should come down, but there's a lot of green pasture ahead.
Thanks! Previously I used 8x EV/S for SaaS, but as SaaS multiples overall keep compressing and Peloton keeps burning cash, I'm trying to be more conservative. Agree with your point re TAM, the question is can they grow and at what cost (2-3x LTV/CAC cited by Barry doesn't sound sexy to me)