Catalyst Investors believes Chronic Care Management is a theme that is here to stay and that all constituents within the healthcare ecosystem will support. Building on previous HCIT research, Catalyst’s latest research explores the role tech-enabled businesses play in helping to facilitate Chronic Care Management, while the firm’s latest market map highlights key constituents within this market.
Software-as-a-service (SaaS) companies have had a great run over the course of the current business cycle. The sector has routinely traded at a multiple above five times revenue, even while having low or negative profit margins. From 2010 to 2013, market observers posited that valuation multiples in the sector were driven by growth alone – the faster the better – no matter how much cash burn it takes to achieve. Since the public market for software stocks hit a speed bump starting back in Q1 of 2014, however, there has been a general perception that profitability is becoming more of a factor in driving SaaS valuations. This awareness is driving capital allocation discussions at companies across the SaaS sector, both public and private. Should a company raise money to “keep its foot on the gas?” Or should it perhaps slow growth a bit but make the move to “EBITDA-positive?”