Valuation
What the Price Assumes
The growth, margin and year-10 revenue the current price needs, set against judgement base rates.
Definition
A reverse DCF: holding the rest of the base case, the revenue growth (and, separately, the operating margin) that makes the model's value equal today's price. The implied year-10 revenue as a multiple of today's is compared with how often companies of similar size and growth have done that.
Why it matters
It shows what you are paying for without relying on our forecast. A price that needs revenue to grow beyond what almost any company has done is a strong claim.
How Standard Equity uses it
A market-expectations diagnostic in the Reference Value workings; it never changes the Reference Value. Operating companies show growth, margin and the revenue multiple; REITs show the dividend growth the price implies; banks, capital markets firms and insurers show nothing, as their model has no such solve. The base rates are round judgement values drawn from survivors, not measured on a point-in-time panel, and are labelled so.
The metric
| Category | Valuation |
|---|---|
| Unit | x |