What Price Is Right? Weekly EV/Recurring Revenue Screen (2026 - Week 25)

Research evidence excerpt

What Price Is Right? Weekly EV/Recurring Revenue Screen (2026 - Week 25)

ronment. In deriving this multiple,

we adjust Enterprise Value to include the cash value of Federal Non-Operating Losses as

we believe their benefit can be relatively easily realized by either the ongoing concern or a

potential acquirer. See Exhibit 4 for the same screen segmented by Software subsectors.

This Week's List. In week 25 of 2026, 92 out of 133 (about 69%) Software stocks with

identifiable recurring revenue trade at or below 6.2x EV/Rec Rev. Among these, 83 have

a market cap greater than $150 million and a 6-month average daily dollar trading volume

of at least $3 million. They include, in ascending order of multiple: COUR, EGHT, SPT,

CMRC, RPD, CXM, YEXT, PD, FIVN, SMWB, DOX, WIX, LZ, RNG, ASAN, NABL, NICE,

BLKB, TDC, MNDY, AMPL, FRSH, TOST, DV, DCBO, OTEX, DOCU, HUBS, GDDY, SPSC,

PATH, LSPD, BRZE, BOX, PRGS, VERX, BL, WDAY, ESTC, APPN, PCTY, RAMP, PEGA,

TENB, ADBE, NCNO, WK, PAYC, DBX, INTA, TEAM, BLZE, ALRM, ZM, GTLB, PCOR,

ALKT, QTWO, CRM, S, CVLT, NTSK, NTNX, INTU, VIA, FSLY, AVPT, PTC, RBLX, QLYS,

AI, KARO, YOU, DOCS, APPF, SAP, TYL, ADP, CHKP, DT, DSY-FR, ZS, and ADSK.

Why focus on EV/Rec Rev? Because recurring revenue is where the overwhelming

majority, if not more than 100% of free cash flow, is derived for a Software company.

We believe that disciplined acquirers always consider EV/Rec Rev in M&A, though they may

assign incremental strategic value to an acquisition target. We believe that if an acquirer

has confidence in the cash flow that could be generated from the recurring revenue of a

potential acquisition, much of the acquisition risk can be mitigated if the price reflects an

appropriate multiple of recurring revenue. The same logic could be applied to the purchase