They will be worth less than $10b mkt cap in 3 years. Currently “on sale” at $17b.
I am more and more convinced these arguments for massively bloated P/S are going to get massacred eventually.
Yes, you may be able to make some bank on the S-curve, and find a sucker willing to buy it higher.
But if they eventually get to $4b/yr in sales, and currently I think they are closer to $500m, their growth rate will likely have slowed, causing the Zoom-like implosion in mkt cap, and eventually all things trade at a P/E. I looked up HR Block…looked at their rev and mkt cap. Nuff said.
Unless a company makes it past the $10b/yr or so mark, and truly becomes an essential cog (like NOW or CRM) I wonder about Enterprise software multiples. So much competition and despite what people think, companies CAN and DO simply cancel their subscriptions when cost-cutting or new disruptive technologies emerge as an alternative.
So someone save this for 2025 and get back to me. (that was for you, Loyal Lurkers!)
Dreamer