in looking at my calculations, do you find anything that you would change to arrive at a higher CAGR than 15% (for Datadog) over the next 5 years?
Bear and Chris,
There are all kinds of assumptions included in that which I don’t make, including whether I will still be in it it five years (normally I exit when the story has changed). However if I can make 50% in the first year (already have 31% in a month and a half), and 40% in the second year, and exit half way through the third year (typical pattern for me) at up another 20% compounded, I’ll be very happy (that put’s me at two and a half times what I started with in two and a half years).
I simply don’t even think in the terms that you are asking.
As far as answering Dreamer’s questions, he was asking why would you invest in Datadog when Elastic was at half the evaluation? I answered that of course Elastic was at half the evaluation. It was growing 30% less per year and falling, while DDOG was accelerating. Elastic was losing more money each quarter and had large negative cash flow and growing losses, while DDOG was positive and growing. Of course Datadog was valued twice as high! Why wouldn’t it be. That’s a whole different question I was asking than your valuation question. You guys try to quantify all these things with all kinds of formulas and tables. I just figure that as long as DDOG is a great company, it will remain “overvalued”.
Saul