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investor112

175 Posts.

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21/01/20

16:17

Post #: 42496748
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Originally posted by ValueSearch: ↑

Investor, rule of 40 is ARR growth rate + EBITDA rate. Use cash burn rate as a proxy for EBITDA rate. If > 40% then you get above average ARR multiples and if < 40% you get below market ARR multiples. LVTs has been < 40% for some time now hence the falling stock price. Rule of 40 is more reliable the higher the ARR, e.g. > 50m which LVT just passed. In short it says it is OK to lose $ as long as ARR growth compensates. If it doesn't which is LVTs case it is not OK. It pretty much explains most of the SP movement in the last year. You can find more information on the web.

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LVT Price at posting: 25.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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