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14:31
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Originally posted by StefanF
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To value companies valuation models are used which have two very sensitive inputs: growth rate and risk-free rate. Usually the growth rate dominates the swings that come from reporting season, so when growth misses the mark stocks tend to drop significantly, and vice versa when growth rates are higher than the market expected. This is amplified for tech stocks which are priced for FUTURE earnings, not current earnings.risk-reward ratio of holding highly volatile tech stocks decreases.company can be valued significantly different when the risk-free rate is 0.5% compared to a higher rate like 2% or 5% even if the company is fundamentally the same .
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So that begs the question: what is fair value for this? Given the market obviously feels $150 a share is too much, what is too little? IS their actually a meaningful range or is this just the strangest large cap we have on the ASX?
