Do revenue build increase conviction in your forecasts? It seems to be that revenue builds add even more variables making it less likely to be accurate in getting it right... compared to using guidance goal posts or modeling a standard growth rate - so does "garbage-in-garbage-out" apply here?
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how are you going to choose an arbitrary growth rate? If you manage to break down revenue to product volume x price you can at least make some assumption about where you see those variables going. Separately product volume is likely going to dictate operating costs and hence overall profitability.
Should've been more specific - software companies in particular is what I am relating this to as they are not really using a price/volume model - more subscription based with various intricacies (# number of customers/seats x ACV) + any professional services but those tend to be rather irrelevant as a % of total revenue. Many of these companies discontinue disclosure or don't report the KPIs SS models assume so the street is left making at making assumptions with nothing to anchor/validate their assumptions... Just seems like too many assumptions/inputs and that extrapolating forward (w. adjustments) is just as useful.
I mean then why not model EPS on a growth rate; or better yet, the stock price itself
"Only buy if it's up and to the right"
Wisdom in simplicity.
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