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Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: PeterGx who wrote (5013)	12/24/1997 10:47:00 AM
From: Alomex	Read Replies (1) \| Respond to of 27307

May be I am missing something, but would not one expect a company making 4 mil in profits on 20something mil in sales to be worth well well well bellow 3+ billion (market cap) What is PEG, anyway? Your second question answers your first one. PEG is a way to measure valuation of a growing company. Is the Price/Earnings ratio divided over Growth rate. Say if I were to sell you a sowed corn field we wouldn't set a price on the basis of the amount of corn currently on it, but instead on the projected yield come harvest time. Same goes for companies. When somebody pays $3 billion for Yahoo, it's not on todays revenues, but also takes into account next quarter's revenues, and the quarter after that, and so on... I think too that Yahoo is overvalued, but as long as the growth numbers give some credence to this valuation, I don't expect the stock to go down: shorter's beware!