PEG scales today's profit with expected profits, but in the growth phase these expected profits depend on how much will continue to be reinvested. And this is precisely the part that is constantly changing and therefore also the reason why the PEG forecast remains fuzzy in the growth phase.
Sales and margins show more quickly and clearly whether the scaling is actually taking effect than the profit estimate in the PEG.
Sales and margins show more quickly and clearly whether the scaling is actually taking effect than the profit estimate in the PEG.
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•@Yoshika
In the growth phase, profit is not a state, but a decision.
In the growth phase, profit is not a state, but a decision.
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@Yoshika a very good point - which is precisely why the combination of PEG and Rule of 40 makes sense. The PEG shows the valuation, the Rule of 40 supplements whether growth and profitability are actually sustainable
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•@Liebesspieler
Yes, that fits.
Yes, that fits.
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@Yoshika
I think the share price itself shows how much the market trusts the growth. And confidence is probably the real valuation premium.
I think the share price itself shows how much the market trusts the growth. And confidence is probably the real valuation premium.
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