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P/E is a meaningful metric for established companies that have exited the hyper-growth phase and have reached some scale. Not so much for younger companies/star
by drexlspivey 5y ago
P/E is a meaningful metric for established companies that have exited the hyper-growth phase and have reached some scale. Not so much for younger companies/startups because it completely ignores potential future growth. You can’t compare the P/E of coca cola with Rivian or Tesla
- boringg 5y agoActually you can compare the P/E to other growth companies and you can determine what size and scale a company needs to get to and how much revenue they need to get to justify the P/E. You can also determine how much hype is attached to a company.