Markets
Bain: SaaS Industry Faces Structural Repricing — Goldman Sachs Software Basket at Half Its Decade Average, P/E Back to 2014
Bain & Company analysis shows the SaaS valuation collapse is structural, not cyclical. The Goldman Sachs software basket trades at 22x forward earnings — less than half its average over the past decade. The sector's forward P/E fell from ~35x in late 2025 to ~20x, the lowest since 2014. Revenue multiples compressed from 12x to 6.5x. The driver is 'seat compression' — as AI agents replace human workers, per-seat SaaS pricing creates an automatic revenue decline loop. Key quote: 'the seat is dying, but the packet and the query are more valuable than ever.'
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