The following article is an excerpt from our Q1 2011 Software Industry Equity Report. To download the entire complimentary report, visit our website: https://softwareequity.com/research_quarterly_reports.aspx
While most of the listed companies comprising our three tracking indices saw improved EV/Revenue multiples year-over-year, ten public software, SaaS and Internet companies excelled at boosting their market valuations in 1Q11 (Figure 6). Overall, these overachievers reported a TTM median revenue growth rate of 43.1% and TTM median EBITDA margin of 24.7%.
The ultimate overachiever was Youku, China’s leader in online video. Youku’s median 1Q11 EV/Revenue multiple was 68.7x, assisted by a 286.3% surge in stock price since its 4Q10 IPO. It’s clear investors are enamored with Youku’s remarkable YoY revenue growth of 152%, which came at the cost of a negative EBITDA margin of -17.7%. Youku narrowly beat out Qihoo, another Chinese company, for top honors on the high flyer list. All told, five of the ten EV/Revenue high flyers are headquartered in China: Youku, Qihoo, Baidui, Ctrip and SINA. The other five rounding out the list include VMWare, Rovi Corporation, Cornerstone OnDemand, Mercadolibre and SuccessFactors.