A lot of these are great but I admit I’ve never been a fan of equity based metrics (D/E, ROE, P/B) or asset based ones (ROA). I find they can be wonky from M&A or accounting treatment. They’re also backwards looking and penalize growth.
Like, the P/B you show for NVDA (65x) makes it look ridiculously expensive, compared to say MSFT at like ~13x. But MSFT and NVDA trade at forward P/Es of 31x and 34x respectively.
That’s a valid point. I need to learn more about forward looking metrics, though I’m not really comfortable using metrics that try to predict the future. Humans are horrible at predicting things.
A lot of these are great but I admit I’ve never been a fan of equity based metrics (D/E, ROE, P/B) or asset based ones (ROA). I find they can be wonky from M&A or accounting treatment. They’re also backwards looking and penalize growth.
Like, the P/B you show for NVDA (65x) makes it look ridiculously expensive, compared to say MSFT at like ~13x. But MSFT and NVDA trade at forward P/Es of 31x and 34x respectively.
That’s a valid point. I need to learn more about forward looking metrics, though I’m not really comfortable using metrics that try to predict the future. Humans are horrible at predicting things.