Speaking of YHOO's P/S, this appeared in Bloomberg:
Written by Geoffrey Moore about the relationship between price and sales of various stocks. He broke the ratios down to those stocks with P/S's less than 1, 1 to 2, 2 to 4, 4 to 8, 8 to 20 and here is what he said about those with P/S's greater than 20:
>>These ratios are either the artifact of very small numbers, typically associated with an infant gorilla candidate that is being valued for a wonderful future but has yet to generate meaningful revenues, or a signal of market mania. These companies would include Pixar, CyberCash, and Yahoo!
The Internet stocks that have captured the market's attention can never be gorillas. That is, they cannot secure proprietary architectural control over the flow of the Internet. They can become strong brands, and thus, like popular TV shows and magazines, they can become extremely valuable as media for advertising, subscriptions, and transaction processing. But there is no evidence to suggest that these stocks could ever earn out the valuations they are currently "enjoying" - and I use quotes because, believe me, the managers of these companies are not sleeping well at night.<<
Sleep well tonight.
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