This is an excellent post from AThinkingFool
Its something I sent a private message to Saul about this morning and he encouraged me to put it out on the board.
I’m trying to get into the habit of regularly challenging my conviction on all my companies. I’ve been struggling with Zoom recently, and now the vaccine news has hit, its brought this front of mind.
I like to hold my companies firmly believing their current market cap could grow 200% in a 2 year window. With Zoom, we know they are going to have incredible Q3 & Q4 numbers. But once they start lapping in 2021, companies move back to a hybrid WFH model, how will the revenue growth numbers justify a $200b+ valuation in 12 months? Perhaps best case they will be doing 4b in revenue in FY 2021, a 50% growth rate, based on the new product lines from Zoomtopia, weighed against the comps they have to match up to.
I know the board, and particularly Saul, avoid valuation concerns, but I’m looking for more confidence on why we think Zoom can hit 2x from here…
I was looking at Salesforce, a former SaaS darling, with $20b of revenue, 30% growth and valued at $235b ish as a comparison which has me slightly worried.
I look forward to your thoughts!