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Joel,

I follow you on why EV is better to use than market cap.

Saul's theory seems to highly correlate revenue growth acceleration. He sold SHOP at 60% Revenue Growth because the Revenue Growth Rate was decelerating...

EV/R or EV/(Future Revenue = Revenue * Revenue Growth Rate) also doesn't account for rev growth rate acceleration.


If my previous math was right, and applying to SHOP...

Market Cap is 14.79B
Cash is $1.58B
Debt is 0.
EV would be 13.21B

Revenue was 0.760B
Revenue Growth last quarter was 62%.

So, EV/FR would be 13.21/(0.760*1.62) = 10.72.

That would indicate SHOP isn't over valued.

How would we factor in growth rate acceleration/deceleration? MDB is on an upward trajectory and SHOP supposedly has peaked out.... is growth rate acceleration/deceleration the distinguishing factor???


And again.... teach me please. Trying to catch up.

Mark
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