I was curios on how many years you used for growth. I suppose 5 years in the first scenario and 20 years in the second scenario? And for the terminal value, I suppose you used perpetual growth with 0% growth for both?
Yes, you're exactly right. I'm assuming no terminal growth in both scenarios, which is obviously really conservative, and the forecast period in scenario 1 is 5 years and in scenario 2 it's 20 years.
Nice article, how do you calculate expected return rates?
Hi, thanks! I use a reverse DCF to calculate expected returns. I recommend checking out my article: https://summitstocks.substack.com/p/reverse-engineering-the-discounted
I was curios on how many years you used for growth. I suppose 5 years in the first scenario and 20 years in the second scenario? And for the terminal value, I suppose you used perpetual growth with 0% growth for both?
Yes, you're exactly right. I'm assuming no terminal growth in both scenarios, which is obviously really conservative, and the forecast period in scenario 1 is 5 years and in scenario 2 it's 20 years.
Damn, you were a bit quicker than me :) I shared my deep dive earlier today.
I'll make sure to give it a read!
Thanks for the idea! Forward P/S is only 1.1.
Yep, pretty crazy, especially considering that this is a clear market leader!
Interesting, thanks for highlighting this one.
Thanks and you're welcome! 🙌