Amoros estimates the large cap techs are trading at an average of 19 times their expected current year revenue, relative to enterprise value .He says there are “multiple possible explanations” for the more generous valuation ascribed to the big techs, including index inclusion, better liquidity and different investor bases.
Specialising in business-to-business software-as-a-service, Nitro is “well-positioned to continue sustaining a high-growth pace at high incremental profit margins”.While established stocks might be construed as having limited growth prospects, that is often not the case. He notes that Seek has expanded into identity verification and recruitment software while Seek and Carsales have invested in Asia.
Meanwhile, the pandemic headwinds that spurred tech plays such as home shopping and the providers are abating — and some companies have been found wanting.have been hammered after a series of profit and revenue warnings. “With Kogan, people thought it was structural growth when in fact it was more cyclical,” Smith says. “There wasn’t enough time during COVID to change sustainable behaviours, so the growth curve was more linear than it was thought to be.