# 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         |

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