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URL:  https://boards.fool.com/maybe-you-should-consider-using-different-metrics-34079244.aspx

Subject:  Re: How long do P/S last? Date:  12/7/2018  5:45 PM
Author:  dumaflotchie Number:  106388 of 114548

Maybe you should consider using different metrics other than P/S.

That’s 13% annualized. While it’s on the low end of what we’re shooting for it is above historical index returns at a time overall valuations historically are followed by smaller gains.

Salesforce.com had 748 million in revenue Had you bought at 20x revenue and held to today’s roughly 8x sales you would have enjoyed 21% annualized.</b<


12X:

Thanks for the post...but I think you are more supporting my/our point that high P/S stocks are a darin on stock performance. Your example is showing 13% and 21% annualized returns....that is assuming a straight line (which we know it isn’t) and that these stocks last 10 years to see all this success unimpeded.

The only stock I am aware of off hand that started with a high P/S is ZS....it has severely underperformed MDB, TTD, TWLO, etc......despite very similar growth rates.

Can you provide other examples of stocks with P/S of 25 that have performed well over 1, 3 and 5 years?

Regarding market cap to TAM.....seems like a nice concept but TAM is way way over abused buy these companies that tout massive and completely unrealistic TAM’s. Without some objectivity, it seems a very slippery slope to make compete WAG IMO.
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