...they were all high growth darling stocks of their time - high performers. But each one of them could not subsequently replicate their earlier growth trajectory.
....and none of them could return to their original all time highs, instead moving sideways with downside bias over a protracted period of time.
....they still make good profits but they could not reclaim their earlier valuations at the peak. Why?
Its because the market was prepared to provide them with 30-40x PE multiples when they could then show consistent growth and with ever higher growth on a forward basis. But as time progressed, their business model/revenue generating capacity went into mediocrity and as a result, the high PE multiples they enjoyed get downgraded. The sectors that once 'ruled the market' was no longer as closely followed.
...the same fate could await ASX lithium majors such as PLS and LTR as their prior growth prospects may never be replicated going forwards. Lithium would be commoditised over time, battery cells would only get cheaper, allowing and facilitating EVs to reach mass adoption.
...lithium stocks become highly capital intensive business like industrial gases with average ROEs.
LS — TradingView
