I will put here my 2c, by no means an expert opinion.
I think there was a very good reason not to discuss valuation on this forum and that this reason remains in place even if the desire to find an anchor point is always very strong.
First, no research until at least several years ago had successfully tied valuations to returns with Shiller PE being best and yet only accounting for 40% of returns per Vanguard. Second, growth companies are valued only in relation to growth and so we concentrate on the degree, direction, and durability of growth because that is the primary factor and the valuation is merely its byproduct.
And so if you want to invest in airlines, railroads, miners, etc, then valuation games are absolutely fair. But for growth? And I don’t think that companies like AAPL are anywhere close to cheap either. And so on.
I have been watching various valuation metrics for SaaS for 2 years and I have seen nothing that had any predictive value. Notably, this includes the Jamin Ball tables. Pricey can remain pricey and cheap can remain cheap as the overall floor adjusts up or down.
Company performance will determine that, primarily, though I would not discount the social media and retail factors for companies with deep retail following.
One can argue that some growth companies are approaching traditional valuation metrics, but then for BILL or TWLO or FSLY the question becomes how you value goodwill because some online aggregators like the one I use give you very favorable P/B ratings and you could nominally say, look, our companies are now objectively cheap! But then if you remove the goodwill…still not cheap by traditional metrics.
For FCF, BILL has a FCF yield per my aggregator of less than 1%. While this is better than negative, ZS is near 2%, CRWD and ENPH are 2.4%, FOUR is 3%, MELI is 5% and for comparison BRKB is 3% AAPL is 4% and JPM is 28%. So is BILL cheap? Cheap relative to what? We can say that MELI and FOUR are on par with some of the most highly regarded businesses and that CRWD and ENPH are by no means crazy pricey but BILL? Then again are BRKB and AAPL cheap? Relative to what? To the realities of 1960? Of 2000? And so on, there is no anchor point that is “true.”
And this is why, although I like it when a growth company that I like also happens to be cheap, this is true only if there is something that can be called a pivot in its performance trajectory that will result in a better performance and hence higher multiple. That could be a new ceo and product (AYX), a new ceo (FSLY), a new focus on efficiency (TWLO), a new pricing model (AI), in any case there has to be something about product, leadership, and market opportunity rather than valuation to get me interested. It is like buying an IPO all over again, essentially.
As for the news, ROKU said they have like half a billion in SVB, unsecured. I don’t know how this SVB situation will affect other mature companies but I sure don’t like seeing this kind of news.