TIP577: Valuation Masterclass w/ Aswath Damodaran
We Study Billionaires - The Investor’s Podcast Network
Assessing the Value of Companies Reinvesting Cash Flows
Valuing a company that reinvests most of its cash flows requires a thoughtful approach. Growth by itself is not good or bad, it should create value by earning more than it costs to raise money. It's essential to evaluate not only the growth rate but also what the company is reinvesting to achieve that growth. Assessing the efficiency of investments made for growth is crucial in making prudent investment decisions. Companies making good investments will yield positive results, while those making poor investments will yield negative results. It is important not to focus solely on growth but to also consider how efficiently companies are delivering growth.
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