Public Software/SaaS/Internet Company Stock Performance

…major U.S. stock market indices turned in one of the best first quarter performances in more than a decade.

 

This excerpt is from our complimentary Q1 2012 Software Industry Financial Report which can be downloaded here:  http://www.softwareequity.com/research_reports.aspx

 

In the first quarter, the major U.S. stock market indices turned in one of the best first quarter performances in more than a decade.  The technology laden NASDAQ index finished Q1 up a stellar 18.7%, as investors were heartened by the strong financial performance of several high flyers such as Apple and Google.  The S&P 500 and DOW also performed admirably, ending Q1 up 12.0% and 8.1%, respectively (Figure 3). Across all three SEG tracking indices, 217 of the 258 (84%) public companies we track reported higher year-to-date (YTD) stock prices.

The SEG Software Index, consisting of 145 public on-premise software companies, closed the first quarter with a median stock price return of 18.6%. Close behind was the SEG SaaS Index, conisting of 28 public pure-play SaaS companies, which closed Q1 with a median stock return of 18.4%. A number of SaaS companies far outperformed their peers in terms of median stock return, with five superstars posting YTD stock returns exceeding 50%: Elli Mae (97.5%), Demandware (86.3%), Bazaarvoice (65.6%), Salesforce (52.3%) and Athenahealth (50.9%). Demandware and Bazaarvoice went public in the first quarter of 2012.

The SEG Internet Index, comprised of 87 publicly traded Internet companies, closed the first quarter with a 19.3% gain in median stock price, slightly outpacing SEG’s Software and SaaS Indexes and the NASDAQ. The median year-end stock return of the SEG Internet Index was buoyed, in part, by investor enthusiasm for newly public companies amid a wave of IPOs in 2011 and the first quarter of 2012 (see this issue’s IPO section for more detail). Four of Q1’s top ten stock performances were turned in by companies that went public in the last twelve months: Brightcove (73.4%), Jive Software (69.8%), LinkedIn (61.9%) and Zillow (58.3%).

 

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