Growth stock valuations below non-growth as measured by market cap to revenue
$Spotify Technology (SPOT.US)$ $Roku Inc (ROKU.US)$ $Zoom Communications (ZM.US)$ $DocuSign (DOCU.US)$ $Block (SQ.US)$ have P/S that are in the neighborhood of staples like $McDonald's (MCD.US)$ $Coca-Cola (KO.US)$
Because growth stocks are generally valued by revenue growth and improvements of margins and have no P/E, they are tricky to compare with non-growth stocks that are fundamentally valued using P/E. But using P/S, which is market capitalization to revenue, is a comparable stat. Generally speaking, growth stocks have P/S which are multiple times greater than non-growth stocks. In this current scenario however, the implication is that either the staple stocks are overvalued or the growth stocks are undervalued. It’s clear to me which it is.
Because growth stocks are generally valued by revenue growth and improvements of margins and have no P/E, they are tricky to compare with non-growth stocks that are fundamentally valued using P/E. But using P/S, which is market capitalization to revenue, is a comparable stat. Generally speaking, growth stocks have P/S which are multiple times greater than non-growth stocks. In this current scenario however, the implication is that either the staple stocks are overvalued or the growth stocks are undervalued. It’s clear to me which it is.
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I block accounts with no name, pic, trading history or posts that try to follow me. Sorry hedges
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7149417 : thanks for the insight. since my name is all numbers, you might have forgotten who I am but I'm still trying to learn what I can.
Mike Hunt OP 7149417 : Guess what? My names not Mike Hunt. I use it because it makes people think or say “my c*nt” and not realize it. creativity is essential for expert level trading competency. Just changing those numbers into anything will help your trading
7149417 : yeah I figured that's not your name haha
Mike Hunt OP 7149417 : I still get caught off guard when people write “Hey Mike ….”
70679939 : Docu is only worth $35
70679939 : Singing software can that higher? This only worth $35
bullrider_21 : The market doesn't look so many years ahead. Maybe the most 1 year. So yes, they are overvalued.
Mike Hunt OP bullrider_21 : If the market doesn’t look more than a year ahead, nearly every growth stock that won’t have earnings by then should be valued at zero.