Excellent article on "Valuation Ratios: The Key Metrics". h/t @toptal
Adds context around (relative) Valuation metrics like P/E, P/FCF, P/S, EV/EBITDA, P/B and their pros/cons.
toptal.com
Adds context around (relative) Valuation metrics like P/E, P/FCF, P/S, EV/EBITDA, P/B and their pros/cons.
toptal.com
✔️P/E
✔️P/FCF
✔️P/S
✔️P/FCF
✔️P/S
✔️EV/EBITDA
✔️P/B
✔️P/B
Valuation is a topic that trips up even experienced investors.
Which Valuation metric to use (especially relative Valuation metrics) should have a lot more context and should depend on...
Which Valuation metric to use (especially relative Valuation metrics) should have a lot more context and should depend on...
✔️The particular Industry & it's economics
✔️Specific Co & it's life cycle (unproven, expanding, stable, declining)
✔️Quality of (Balance sheet, Margin profile, Management, runway for growth/reinvestment, Comp advantages)
& many more factors.
Definitely more art than science.
✔️Specific Co & it's life cycle (unproven, expanding, stable, declining)
✔️Quality of (Balance sheet, Margin profile, Management, runway for growth/reinvestment, Comp advantages)
& many more factors.
Definitely more art than science.
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