It should be something derived net present values or discounted cash flow. Same general idea: what is the summation of future cash flows distributable to owners

It should be something derived net present values or discounted cash flow. Same general idea: what is the summation of future cash flows distributable to owners after a suitable discount rate (plus liquidation value, maybe). It's hard to extrapolate rapid growth correctly, but it can lead to very high present values (ie ~20x sales, depending growth curve of expenses & current margins). The same formula, given a 10% discount rate zero growth implies a ~9x multiple on earnings, a pretty low valuation. Craftsman Tools was a brand, if I recall correctly (made by Danaher?). So while asset light and potentially higher margin, there probably wasn't as much liquidation value there. If growth rate wasn't high or decreasing the predicted valuation on earnings might have been low. Then you just run into human factors like fomo/bidding wars (maybe, like Nicira, Heptio?), things that impact valuation like perceived higher or low risk free rates that might impact the discount rates that are used, et cetera.