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#valuation
12 posts tagged valuation.
12 posts
EV/Revenue: The Multiple That Survives When Earnings Don't
EV/Revenue survives where P/E breaks, but needs a growth bridge. Pre-profit software mid-cycle runs 0.2-0.4x growth-adjusted, how to avoid the reading traps.
FCF Yield: What You're Actually Earning Today
FCF yield answers the most basic question in equity investing: if I buy this company today, how much cash does it throw off per dollar?
Earnings Power Value
EPV asks what a company is worth assuming zero growth, forever. The gap between EPV and market cap is the growth premium.
Valuation Sensitivity
A DCF prints one number; the truth is a distribution. Swinging WACC by 100 bps and terminal growth by 50 bps routinely moves the output by 40-70%.
PEG Ratio: A Growth-Adjusted P/E, Less Naive Than It Looks
Naive PEG ignores growth quality and buyback distortions. The fix: use 3-5 year organic EPS CAGR and compare only within a profit-consistent peer group.
Reverse DCF: Solving for the Market's Implied Growth
Reverse DCF yields one testable implied growth rate you compare to realized history and peer comps to judge whether a stock price is stretched or reasonable.
Rule of 40: The Shorthand That Captures SaaS Health
The Rule of 40 collapses growth and profitability into a single number that should exceed 40 for a durable SaaS business.
DCF vs Multiples: When to Use Each Valuation Method
When discounted cash flow analysis works, when relative multiples are better, and the pitfalls that trip up both approaches.
Understanding P/E Ratio: A Complete Guide for Investors
Learn what the P/E ratio means, how to interpret it, and when it can mislead you. Includes sector comparisons and practical examples.
Price-to-Sales for Growth Stocks
How to use price-to-sales ratio to value high-growth companies that are not yet profitable, and the traps that make this metric dangerous.
Price-to-Book Value: Useful for Banks, Misleading for Tech
Price-to-book works for banks and asset-heavy industrials but misleads for software. Here is how to apply it correctly by sector and when to skip it.
EV/EBITDA: What Professionals Use Instead of P/E
Why enterprise value to EBITDA is the preferred valuation metric on Wall Street, how to calculate it, and when it gives a clearer picture than P/E.