#IPO Learning 4: Valuation multiples are all relative

•Companies think too much about size, or market share

•Growth, combined with operating return on capital is far more valuable

•A good business or a good management will always command higher valuations

•A 50 P/E stock may be cheaper than a 15 P/E stock because each company’s growth, return on capital employed and cost of equity is different•Implied P/E is different from Market P/E

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#IPO Learning 4: Valuation multiples are all relative

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