Medium term lower revenue growth implies falling expectations and thus lower future PE acceptance.

This narrative is brief and simply stands on the shoulders of the recent aggregate analysts review (Dec 2024).

Put simply, if revenue grows at <15% pa and margins fall to <20% average over next 3 years, that implies a pretty consistent growth rate that contradicts the high PE ratio for this stock. A reasonable investor is not going to pay 50+ PE (for 2% returns on current price) for a company with proven growth <15%.

Further, with the risk factors in play especially AI, the discount rate used by any investor should be higher to justify the returns.

Thus, even allowing for revenue growth at 15% and margins at 20%, with discount rate holding at 7.08%, if PE acceptance falls to 30x then indicated fair value is $253.14. That still implies higher future growth than would have been demonstrated for 5-7 years up that point.