No. of Recommendations: 65
Honestly, a 15 P/S or 20 P/S or even 12 P/S is not what average companies even get to.


Our companies aren't average companies.

An "average" company isn't growing revenue at 40% to 90%, or at anything even close to it! I just Googled it and they say the average S&P sales growth rate is 8.12%. Laughable!

An "average" company usually doesn't have 75% to 90% gross margins or anything even close to that! Actually it's just about half of that.

An "average" company doesn't have 85% to 95% of its revenue completely recurring and on subscription, and most have no "recurring" revenue at all in the sense we are talking about it.

An "average" company doesn't have a dollar-based net retention rate of last year's customer cohort of 115% to 145%, or anything even close to it! In fact last year's new car buyer or retail clothes buyer may buy nothing next year from you, and often does.


So why would we expect our companies to have the same P/S ratios as an "average" company? Of course our companies have much higher P/S ratios. How could you even imagine anything different?

Relax. This is a really bad correction for our companies' stocks but the companies aren't going away. Their stock price going down doesn't mean they are having any company specific problems at all. Forget about it over the weekend, and have a good weekend.

Saul
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