Agree on the overvalued part. Although, I would think that most technology companies would trade on a price/sales multiple of at least 3 as they usually operate on high margins.
To illustrate my point. A stock with a 20% margin trading on a p/s multiple of 3 would therefore trade on a p/e of 15 (3/20%). Given these companies tend to have good growth prospects and ability to translate a high portion of their earnings into free cash flow that's a pretty conservative valuation.
Conversely, a P/S multiple of 3 might be high for low margin low growth business. For example a 5% net margin stock trading on a p/s of 3 would equate to a p/e of 60 which unless they have incredible growth prospects if expensive.
ASX is the ultimate example of a high margin business. It trades on a price/sales multiple of 10 and I think it offers pretty good value at present.
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Last
$128.46 |
Change
-0.610(0.47%) |
Mkt cap ! $19.61B |
Open | High | Low | Value | Volume |
$128.38 | $128.97 | $127.44 | $27.88M | 217.3K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 2 | $128.23 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$128.50 | 1224 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 2 | 128.230 |
1 | 429 | 127.990 |
1 | 1024 | 127.370 |
1 | 178 | 127.300 |
1 | 1024 | 127.210 |
Price($) | Vol. | No. |
---|---|---|
128.500 | 1224 | 2 |
128.660 | 1024 | 1 |
129.000 | 62 | 1 |
129.100 | 4 | 1 |
129.300 | 50 | 1 |
Last trade - 16.10pm 08/08/2024 (20 minute delay) ? |
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