Smartsheet Inc. (SMAR) DCF Valuation & Fundamental Primer
Smartsheet Inc. (SMAR) currently trades at $190.15 with an enterprise value of $20.17B. Our proprietary institutional model rates Smartsheet Inc. at 91/100 (Grade: A+ · Elite SaaS Compounder). The current market price prices in an implied 5-year revenue CAGR of 34.2% vs. historical growth of 22.7% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of Smartsheet Inc. (SMAR) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Smartsheet Inc. (SMAR) 3-Scenario DCF Valuation Range
Institutional Software Quality Scorecard (91/100 · Grade A+)
Exceptional unit economics, disciplined equity dilution, and fortress balance sheet.
Elite deferred revenue float; FCF exceeds operating income by >20%
Standard software SBC dilution; modest equity transfer to employees
Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40
Zero-debt fortress balance sheet with abundant net cash liquidity
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 564% of EBIT driven by upfront annual collections
- Top-quartile software unit economics: 80.6% gross margin and 46.4% Rule of 40 score
- Fortress capital structure: Zero debt and $2.02B in pure net cash
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into SMAR?
The current share price demands 34.2% 5-year CAGR—a +11.5% acceleration over historical run-rate (22.7%). Any growth slowdown risks valuation multiple contraction.
Smartsheet Inc. (SMAR) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $2.78B | $2.78B | $3.41B | $4.18B | $5.13B | $6.30B | $7.73B |
| Gross Profit | $2.24B | $2.24B | $2.75B | $3.37B | $4.14B | $5.08B | $6.23B |
| Operating Income (EBIT) | $116.7M | $116.7M | $143.2M | $175.7M | $215.6M | $264.6M | $324.6M |
| Stock-Based Compensation (SBC) | $375.2M | $375.2M | $460.3M | $564.8M | $693.0M | $850.4M | $1.04B |
| Unlevered Free Cash Flow (FCF) | $658.6M | $658.6M | $808.1M | $991.6M | $1.22B | $1.49B | $1.83B |
| SBC-Adjusted True Cash Flow | $283.5M | $283.5M | $347.8M | $426.8M | $523.6M | $642.5M | $788.3M |
Collaboration, Document & Work Management Peer Comparables Matrix
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Smartsheet Inc. | SMAR | $32.59B | $2.78B | 80.6% | 23.7% | 46.4% | 13.5% | 11.0× |
| Zoom Video Communications | ZM | $17.84B | $1.58B | 72.8% | 20.8% | 43.2% | 12.5% | 11.0× |
| DocuSign, Inc. | DOCU | $29.38B | $3.57B | 75.7% | 21.7% | 45.5% | 17.2% | 7.7× |
| Asana, Inc. | ASAN | $17.86B | $2.01B | 79.5% | 23.3% | 39.0% | 13.3% | 8.4× |
| Atlassian Corporation | TEAM | $10.00B | $774.5M | 77.7% | 22.6% | 41.7% | 13.1% | 12.3× |
| Twilio Inc. | TWLO | $38.62B | $2.83B | 80.7% | 27.3% | 51.3% | 17.8% | 12.9× |
| Peer Cohort Median Benchmark (N=5) | 77.7% | 22.6% | 43.2% | 13.3% | 11.0× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 11.0× | $30.57B | $32.59B | $190.15 | 0.0% |
| -20% Multiple Compression | 8.8× | $24.45B | $26.48B | $154.48 | -20.0% |
| -35% Multiple Compression | 7.1× | $19.87B | $21.89B | $127.73 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $13.90B | $15.92B | $92.87 | -54.5% |
Frequently Asked Questions: Smartsheet Inc. (SMAR) Valuation
What is Smartsheet Inc. (SMAR)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Smartsheet Inc. (SMAR) has a Base Case implied value of $129.48 per share (with a Bear Case of $60.22 and a Bull Case of $228.93), compared to its current price of $190.15. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Smartsheet Inc. (SMAR)'s Rule of 40 score and Free Cash Flow margin?
Smartsheet Inc. achieves a Rule of 40 score of 46.4%, combining a 22.7% revenue growth run-rate with a 23.7% TTM free cash flow margin on $2.78B in trailing twelve-month revenue. In the Collaboration, Document & Work Management peer cohort, the median Rule of 40 benchmark is 43.2%.
What revenue growth rate is priced into SMAR stock according to Reverse-DCF analysis?
At $190.15 per share (Enterprise Value of $30.57B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 34.2%, compared to Smartsheet Inc.'s historical CAGR of 22.7%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does Smartsheet Inc. compare to Collaboration, Document & Work Management software peers?
Smartsheet Inc. (SMAR) earns an institutional Software Quality Score of 91/100 (Grade A+ — Elite SaaS Compounder). Across its Collaboration, Document & Work Management peer group (ZM, DOCU, ASAN, TEAM, TWLO), the cohort trades at a median EV/TTM Revenue multiple of 11.0× and a median gross margin of 77.7%.
How does Stock-Based Compensation (SBC) impact Smartsheet Inc. (SMAR)'s valuation?
Smartsheet Inc. recorded $375.2M in TTM stock-based compensation (13.5% of revenue). When treating SBC as a cash-equivalent compensation expense, Smartsheet Inc.'s SBC-adjusted free cash flow yield is 0.9%, scoring 16/25 on our Shareholder Dilution Friction pillar.