There is a reason why Warren Buffett shies away from the most recent rise in technology stocks – they are not cheap businesses.
Time and time again, investors are warned about the hot tech industry, comparing today's market with that of the dot-com bubble. Analysts are pricing these stocks on relative metrics such as ‘Enterprise Value/unique visitors' or ‘Enterprise Value/users' – which is not always good representation of future cash flows.
As well, analysts are also valuing these stocks against one another, overall accepting high trading multiples as ‘industry standard'. An EV/Revenue greater than 5 is not by any means ‘normal,' and the stocks on our list carry even greater risk.
Alibaba Group Holding Ltd. BABA - $87.58
Internet Services
Alibaba Group Holding Limited is a China-based online and mobile commerce company in the retail and wholesale trade, as well as cloud computing and other services. The Company provides technology and services to enable consumers, merchants, and other participants to conduct commerce in its ecosystem.
The Company operates Taobao Marketplace, an online shopping destination, Tmall, a third-party platform for brands and retailers and Juhuasuan. The Company provides the fundamental technology infrastructure and marketing reach to help businesses leverage the power of the Internet to establish an online presence and conduct commerce with consumers and businesses.
Market News and Data brought to you by Benzinga APIs- Market Cap: $218,555,805,573
- P/E: 55.8x
- P/FCF: 44.8x
- EV/Revenue: 17.0x
- Market Cap: $226,540,417,965
- P/E: 80.6x
- P/FCF: 96.3x
- EV/Revenue: 15.9x
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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