The two most rec’d posts on this board in the last couple days both address valuation:
If you’re one of the apparently many people on this forum who are interested in valuation, please make sure you understand the conversation at this far less popular thread:
And since people are interested, here are my thoughts on valuations for my favorite stocks. I’d be interested to hear if anyone has reasons they agree or disagree that they think I may be missing.
SMAR’s PS is at about 19 right now. It’s also only a 4.3 billion dollar company. I think it should sustain 50% growth for a while, so I think this price is more than fair.
MDB is at 19 as well. It’s been a better than 50% grower, even 60%+ sometimes. I think this is a bargain.
TWLO’s PS is 17. I think it was over-priced at 25, because I think it will be a maybe 40% grower after the next couple quarters. But at 17, it’s nearing bargain territory. And here’s the thing: after it reports next week, its PS will be about 15 (before any bump in share price).
ESTC’s PS is at 17.5. It is growing at roughly 60%, and I think it will stay close to that for a while, and certainly above 50%. This is a bargain.
AYX is at 20.5. It is growing at roughly 60%, and I think it will stay close to that for a while, and certainly above 50%. It should also get a bump over ESTC because it is already profitable, and has the best Gross Margin I’ve seen. So this is close to bargain territory. Before any share price bump, its PS will drop to about 18 next week with earnings.
CRWD is at about 28. But it is growing at 90%+. I actually think it will do that for at least a few more quarters, so this is a bargain.
PINS has a PS of only about 16. With 60%+ growth, that’s a steal. The only thing is, I’m not confident about their future growth trajectory. It’s only just gone public. Still, there’s a lot of upside here.
I’m not sure DDOG (PS now under 30) is in bargain territory yet, but it’s gotta be close. The future growth rates for ZS and TTD are unclear to me, but neither seem expensive. If anyone feels strongly about their valuations, let’s hear why.
Hope this is interesting. Times like these may not be fun, but they can give us some great opportunities if we know where to go shopping. I added a bunch of CRWD yesterday.