Valuations - a research/community approach

I appreciate all that we can contribute here.

I wanted to share a part of my approach to considering valuation in the context of growth/Saas type stocks.

I previously commented that I found these articles by Catalyst growth insightful for looking at growth Saas type stocks.……

Some people argue that ev/sales or p/s are not useful metrics when looking at investments, but if you consider that they may be a useful component of analysis, this might be of interest

My allocation approach is similar to what GauchoChris outlined here:…

I have started to tabulate up to date relevant metrics for some of the stocks followed on this board (and some that aren’t) to try to identify mispricing opportunities to consider entry, incorporating 3 formulae laid out by Catalyst.

Using the three Catalyst models (which I admit miss out on important metrics like net retention rate), I try to consider what might be a reasonable range of valuations for stocks I like (+/- 20%), to try to identify when they offer an attractive entry. It isn’t a holy grail but it’s a useful adjunct.

I look at the three forumulae, asess the mean P/S (but consider EV/S instead) they would suggest in order to give some margin of safety , and try to consider a low end (-20%), mid, and higher end premium (+20%) in terms of the market cap expected given the metrics.

You could also consider the net retention rate, competitive advantage, and other factors in order to add a premium for high performers

I tend to take metrics and forecasts from and most recent ERs

I tend to get info on outstanding no of shares from

I am sharing the full editable link, in the hope that if you find the approach a useful adjunct to your analysis.

Feel free to update the metrics for stocks listed, add new tickers, comments etc. Hopefully it is reasonably self explanatory. All I would ask is to please not screw with the formulas on the main Google doc site without an email first (feel free to download and edit locally as you please)

Hope it is useful to some…


I’m sure some of the growth data for certain stocks is out of date - if you think, please feel free to update it directly

How did you calculate column S in the google spreadsheet?

Column S is the midpoint Enterprise value,column N, divided by the number of shares outstanding, column Q