Build a Real Peer Set
Classify possible peers by whether their economics make them usable for relative valuation.
Target: vertical SaaS company with recurring revenue, 82 percent gross margin, mid-market customers, and 18 percent growth. Sort each candidate by peer quality. Core peer Stretch peer Exclude Workflow SaaS with recurring subscriptions, 80 percent gross margin, and 16 percent growth Cloud software platform with enterprise customers and 30 percent growth Hardware reseller with 18 percent gross margin and large inventory swings Vertical SaaS competitor serving the same customer segment at similar retention Payments network with take-rate revenue and materially different regulatory risk Horizontal SaaS company with similar margins but faster global expansion Core Stretch Common trap Sector code is…
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