Now you have the analysts starting to say that tech stocks are overvalued and that there will be a downdraught. Watch the pace of this news start to spread. Along with crazy payouts of the founder of WeWork, investors are going to get even more jittery.... Aivars Lode
Key Takeaway from a Jefferies Equity Research Report
History is the best teacher when it comes to stock valuations. We analyzed the historical multiples for two names across time - WDAY and SPLK. Their peak multiples (both about 25x) in Feb. 2014 lasted for a nano second, followed by a painful ride to the trough in Feb. 2016. As such, we would keep an eye on the high flyers in software and expect the downdraft in valuations to continue. We quantify the downside risk across our coverage universe below.Click to read full report here
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