What statistic could replace earnings in the "Amazon era?"

Discussion in 'Economics' started by farmerjohn1324, Sep 19, 2020.

  1. newwurldmn

    newwurldmn

    I am confused. What are you trying to do? In an earlier post you said the question was targeted towards macro economics.
     
    #101     Sep 24, 2020
  2. The original question was just looking for a statistic of individual companies. But then the thread got sidetracked into a debate about FA vs. TA.
     
    #102     Sep 24, 2020
  3. vanzandt

    vanzandt

    Didn't read the whole thread so someone might have mentioned this, but a lot of VC's use 'the rule of 40' on these high fliers.
    Take the net profit margin and add it to the percentage of annual revenue growth. If it comes in over 40, its at least worth a look.
     
    #103     Sep 28, 2020
  4. taowave

    taowave

    So companies showing negative net income with high sales growth are on the radar?
     
    #104     Sep 28, 2020
  5. vanzandt

    vanzandt

    Not net income, net margin. That's why software companies do so well, their margins are very high. Once they break even otherwise, its pure profit. CRM was a good example of this.
     
    #105     Sep 28, 2020
  6. taowave

    taowave

    Net margin is a derivative of Net Income vs Revenue...
    What I am saying is you can have a company that loses money,hence Neg Net Income,hence Neg Net Margin,byt still have explosive sales growth...

    Im not disagreeing with you,I am pointing out that you can have companies with neg EPS,burning cash but putting up big Rev growth
     
    #106     Sep 28, 2020