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.
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Disclaimer
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