Has anyone ever made money buying something at >35x P/S?
Other than MSFT where with the lost decade post-dot-com it took a decade to get back to par, are these ever good investments? I'm on the newer side and so don't have all the historical precedent. I can think of a lot that didn't work - if you bought SNOW at 125x you were crushed, if you bought GoodRx at ~50x you were crushed, but are there any examples where this isn't the case?
Interested
Public markets idk but VC littered with examples
Yeah dude, Tesla lol
Wait until you hear about companies that are pre-revenue lol
bump
the name in question is $net
Pretty much never works long term. Even elite companies like Shopify or Nvidia only justified high multiples after massive revenue growth. Buying above 35x P/S usually means all future upside is already priced in.
Take a look at Costco. Never been cheap but plenty of people have made money on that when it was 35x PE.
You're in the wrong room. No one here's talking about "earnings".
Yikes, good catch. I thought it was P/E.
I was in VC so we did plenty of 35x sales but on the public side it's purely a question of how long public markets will remain irrational.
CRWD is the only one I can think of where it was 50x Sales and now four years later stock has more than doubled
Kushner reportedly invested in OpenAI at $30bn / $50mm of sales...
Whenever someone asks “has anyone ever” the answer is generally yes. It’s a big world out there, don’t be so lacking in imagination
Easier to see this if you focus on the denominator - 35x $1mm is just $35mm. So any minimal revenue company that makes it. , e.g., in biotech where 100x some minimal amount of grant revenue while in clinical development is common
Also plenty that just grew into their valuation and beyond. Amazon was >50x during internet bubble.
Facebook at the IPO had a P/E of 85. A decade later the stock is up like 1,500%. Seems to have worked out ok.
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