2016-02-05 — wsj.com
Some bears have long been warning that valuations in the "cloud" computer sector have been sky-high with investors focused on fast revenue growth rather than profitability. According to venture-capital firm Bessemer Venture Partners' cloud index, the average $1 billion-plus valued cloud company was trading at 7 times 2015 revenue as of yesterday's close.
If the pessimists are right, then these companies are very vulnerable to any suggestion that revenue growth might slow. Unlike other companies, they don't have a profit lever to pull to make up for any drop off in revenue growth.
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