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As Slack’s Stock Slips Sideways, A Reminder Of Its Still-Rich Valuation

Morning Markets: As Slack continues to slide as a public company, a look at why it’s still valued so highly amongst its SaaS peers.

We’ve written about why Slack has seen its valuation come down from early highs, noting that Microsoft remains an active competitor, the company’s revenue growth is slowing, and more.

Why is Slack worth so much, compared to other SaaS companies?

The average value of a SaaS or cloud company today, on the public markets, is about 10 times its revenue.

Other SaaS companies are worth around $10 for the same revenue dollar.

With that, we could look at the gap from an average, or median result to Slack’s own, which should illustrate the company’s valuation and what supports it.

Slack’s net retention (how much more customers tend to spend each year with the firm) is also far better than our loosely-calculated comparative metric for larger private SaaS companies.

And, Slack’s gross margins are very high when compared to the already-strong SaaS median figure set by the group of private companies.

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