SaaStr: SaaS Rout of 2026 Crosses Historic Threshold — Software Forward P/E Now Trades Below S&P 500 for First Time Ever
SaaStr·high signal
Software valuations have collapsed past a landmark: for the first time in history, SaaS forward P/E multiples now trade at a discount to the S&P 500. A Goldman Sachs software basket sits at 22x forward earnings — less than half its decade average — while the sector's forward P/E cratered from ~35x in late 2025 to ~20x, levels unseen since 2014. Revenue multiples collapsed from 12x to 6.5x and major software indices are down 22%+ through late March 2026, even as profit estimates for SaaS companies continue to rise 21% YoY.