VALUE: After Hours (S08 E14): Are SaaS Stocks Finally Cheap? ServiceNow, Adobe & AI Disruption Risks

During their recent episode, Taylor, Carlisle, and Chris Bloomstran discussed Are SaaS Stocks Finally Cheap? ServiceNow, Adobe & AI Disruption Risks. Here’s an excerpt from the episode:

[Chris] No, I mean, doing a bunch of work on ServiceNow at the moment and Adobe, I mean, there are some clear businesses that are harmed, and ServiceNow might be one. They enjoy very, very high margins, so I don’t think they’re gonna lose in the IT world that they cater to, their big S&P 500, Fortune 500 clientele. They’re not gonna get displaced from the processes that are in place, but incrementally they may not drive 20-plus percent revenue growth, and if you do get a disruptive competitor via AI that uses a much cheaper tool, at the margin, you’ll see margin compression pretty severely.

In the ratings world, in some of the businesses, like S&P Global’s very interesting, Moody’s, if it gets cheaper, very interesting, but the SaaS things are so funny because you look at them, and forever they traded at crazy multiples to revenues and crazy multiples to earnings if they had them, and there’s just been an awful lot of evisceration, and anytime you get this, sometimes it goes too far and sometimes it doesn’t, so we’re spending a lot of time on it.

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