With revenues up 20% since peaking together with the price falling 26% from near 1400 down to near 1000, the PSR (Price-to-Sales Ratio) has fallen from 10.5 times down to 6.7 times.
That is a full-blown market correction equivalent to any major bear market.
Is PCLN cheap now that it is at 7.5 times sales? No, not really. If PCLN were something you could own outright and take private at the current price, you'd have to find the cash to put the deal together. What returns would you expect to earn to make it worth your while? That's the key component. How many years until you earn your initial capital back?
That is a full-blown market correction equivalent to any major bear market.
Is PCLN cheap now that it is at 7.5 times sales? No, not really. If PCLN were something you could own outright and take private at the current price, you'd have to find the cash to put the deal together. What returns would you expect to earn to make it worth your while? That's the key component. How many years until you earn your initial capital back?
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