No. of Recommendations: 19
If you go back further as I did with my analysis of CRM you will notice that we never had EV/TTM Sales above 17.6

And it was a bargain the whole time! It's up like 14x in the last decade. Are you saying that it was overvalued at a PS of 18?

I think you are anchoring to the recent highs. These high EV/TTM Sales ratios have only been around for a relatively brief period.

I'm not anchoring to anything. Here's my thinking: A PS of 10 correlates to a PE of ~33 for a company with a 30% net margin. A PS of 20 correlates to a PE 66. That seems like a pretty reasonable range for companies that are growing at 50% or 60%...and downright cheap for companies that are growing at 90%.

If you are to say that, "Well, they're not spouting off 30% net margins (or FCF margins) yet, yes I agree completely. But we don't want them to! We want them investing back in their businesses and sales teams, and continuing to grow as rapidly as possible.

What am I missing?

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