SaaS Hits Historic Low: Software Forward P/E Falls Below S&P 500 for First Time Ever at 22.7x
SaaStr·high signal
Software forward P/E multiples compressed to 22.7x in March 2026 — falling below the S&P 500 average for the first time in the cloud era. This never happened in the dot-com crash (speculative unwind), the 2008 crisis, or the 2022 rate spike. EV/Revenue bottomed at 3.1-3.4x, down from 7.0x in early 2025. The IGV ETF dropped 21% YTD and 30% from its September 2025 peak. Root cause: AI 'seat compression' structurally breaks the revenue model when agents replace headcount rather than complement it.