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by wrsh07
9 days ago
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> Revenue is not a basis for valuation otherwise Walmart would be more valuable than Nvidia, Apple and Google This is a confused take Revenue is an excellent basis for comparison of valuations if the growth rates are similar. Nvidia is worth what it is because of its vertical growth rate If company A makes a 100U this year and I think it's going to double by the end of the year (to 200U) I would rather hold shares of that than company B which makes 150U per year and it's growing 10% yoy. Next year I'll have a company making 200U, whereas B will only be making 165U. So I would pay more for A today than I would for B. As an aside, Apple and Google sum to more revenue than Walmart and have better growth. So your claim was correct five years ago and the growth rates have literally shown you why Apple and Google have higher market caps I haven't even gotten to explain the space TAM, but suffice to say black car tam was small before Uber. (What % of black car cabs did Uber provide in their first year offering the service) |
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Growth is important, but only if you can keep a high margin on the products you sell : it's not the case with Starlink (the main profitable activity), ARPU is down 23% yoy, at 66$ in 2026. Compare it to 99$ in 2023.
Last point, growth in market caps have diminishing returns, and it's obvious that it's easier to do a x100 if you start from 1b than 1750b. SpaceX runs the classic strategy of "high MC, low float" that has ruined many altcoins in crypto for the benefit of insiders who will want to sell to realize their gains.