NVIDIA, Cadence and Synopsys have seen their share price overtake their FCF/share
There are many ways to track valuation. Here's one way I find helpful.
The below table compares 10yr share price growth with 10yr free cash flow per share growth.
$Applied Materials(AMAT)$ and $Visa(V)$ have seen their FCF/share grow faster than their share price - suggesting that the market may have overlooked their performance.
$NVIDIA Corp(NVDA)$ $Cadence Design(CDNS)$ $Synopsys(SNPS)$ have seen their share price overtake their FCF/share, suggesting that the market is pricing in higher future growth than seen in the past.
Where are you currently seeing value?
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The changes in stock prices are dependent upon starting valuations & ending valuations.
Adjusting share price CAGR for FCF yield give you FCF/share CAGR. And adjust FCF/share CAGR for FCF yield gives you share price CAGR.
You can infer from this table that $Qualys(QLYS)$ has seen FCF yield go up, while NVIDIA has seen FCF yield go down.
https://twitter.com/long_equity/status/1789956232448541035
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- cheeryk·05-14As for value, I would need to do more research.LikeReport