Helpful analysis! I'd love to see the P/E ratios for the companies in your Disruptive Healthcare Index presented alongside the market cap data. Many of them were historically so overvalued that they're finally back in the realm of normality.
Thank you for reading, and for the feedback! Please share this post if you find it helpful. I'll make improvements as I update the numbers weekly!
I thought about including P/E, but, the problem is that many of these companies are still early cycle and while they may have positive EBITDA (which some still don't) many of them do not have positive earnings yet, and aren't projected to have them for a year or two. So those negative P/E multiples aren't super helpful. On top of that, several of the ones who do have positive EPS projections have EPS barely over zero so the multiple appears huge when they aren't in fact really trading at that huge multiple, as it's only a function of how small the EPS is and the Company is really trading on revenue growth or EBITDA.
Finally, as a VC, I'm trying to read across valuation information that helps me price private companies from seed stage up to growth equity. Most of those companies don't have positive earnings, and very few of them even have positive EBITDA, so reading across a P/E multiple from a public company doesn't really help me value those private companies. So, P/E isn't really a metric I use a lot for my work as a VC.
Helpful analysis! I'd love to see the P/E ratios for the companies in your Disruptive Healthcare Index presented alongside the market cap data. Many of them were historically so overvalued that they're finally back in the realm of normality.
Thank you for reading, and for the feedback! Please share this post if you find it helpful. I'll make improvements as I update the numbers weekly!
I thought about including P/E, but, the problem is that many of these companies are still early cycle and while they may have positive EBITDA (which some still don't) many of them do not have positive earnings yet, and aren't projected to have them for a year or two. So those negative P/E multiples aren't super helpful. On top of that, several of the ones who do have positive EPS projections have EPS barely over zero so the multiple appears huge when they aren't in fact really trading at that huge multiple, as it's only a function of how small the EPS is and the Company is really trading on revenue growth or EBITDA.
Finally, as a VC, I'm trying to read across valuation information that helps me price private companies from seed stage up to growth equity. Most of those companies don't have positive earnings, and very few of them even have positive EBITDA, so reading across a P/E multiple from a public company doesn't really help me value those private companies. So, P/E isn't really a metric I use a lot for my work as a VC.