Interesting snippetbelow from the AFR this morning re tech...

Interesting snippetbelow from the AFR this morning re tech valuations which I completely agreewith. Basically, saying the BNPL sector growth is off the charts even beyond traditionaltech growth rates and therefore has higher valuation multiples which effectivelyis halving every 12 months due to their continued >100% yoy growth

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The buy now, paylater sub-sector also continued to perform well across the board, with Zip upmore than 36 per cent and Afterpay up14 per cent.

Mr Lockton saidstocks like the buy now, pay laters were in a class of their own due to theirextremely fast growth.

He believed thehigh multiples being fetched for comparative US companies such as Affirm wouldresult in investors continuing to buy into these names.

“Both Zip andAfterpay are growing revenues by more than 100 per cent [annually] and thatputs you in a different world for valuations,” Mr Lockton said.

“What we saw withthe listing of Affirm is that US investors pay materially higher multiples[enterprise value/revenue] for these ultra-high growth stocks and that’s thecase even after the price action for Afterpay through January. On that basisits multiple is halving every 12 months and the Aussie market is just gettingcomfortable paying those multiples.