Overvalued stocks reddit Wouldn't Jubilant foods fit that bill of highly overvalued stocks as well? It has a P:E ratio of 131. Coinbase, valued at $49. 7% below its current trading price. Despite its growth, analysts give it a consensus rating of "hold" with a target price 22. As the market cap of MSTR shoots up, the stock may eventually be included in major S&P indices. Is it a good idea to buy tech stocks (Alphabet, Microsoft, Apple, Amazon, Nvidia, Meta) right now considering I am in for the long run (10-15 years)? I believe the market is currently pricing it as the fair value in like 7 years. , follow the market cap as indicated by the market, you wouldn't need to rebalance between stocks (stocks vs bonds is something else). The fundamentals aren’t there for most of this companies. I've heard this a lot- the stock market is overvalued because it is trading at record highs despite unemployment exceeding 10% and no end to the pandemic in sight. Looking at the data from the last annual report I find the following: Market Cap: $842bn OCF: $30,7bn P/OCF: 27,4 Net Income: $10bn P/E: 84 . I’m in cash, emerging markets, and value, with 2/3 of my value outside of the US. Tech stocks seem to have lost some momentum. However, NVDA jumped to Many of the NASDAQ stocks are overvalued theses days : TSLA , AAPL , but still people love the cars , the phones and all other things , and WE still buying these stocks , they are GREAT stocks , so the question should be : what Technically, beating the market only requires that your stock do better than the average (as represented by the S&P 500). We all trade in the secondary market so stock prices are set by how much people will pay for the stock at any given time. Read on. What you're saying might be true for an ETF, but for individual stocks what you're saying makes no sense. 2 standard deviations above trend. Seems overvalued but the stock rallied even in the last 1M by 11%. Tesla is my limit on dream valuation. You should understand how the stock market works more to understand stocks like LLY and NVDA. If you're wondering why a stock moved a certain way, check out Finviz which aggregates the most news for almost every stock, but also see Reuters, and even Yahoo Finance. 2. If the overall market never goes past day X, there will be larger issues in the world than the market price. Discussions related to stock market investing, trading, derivatives - F&O & Commodity trading in India. In the present, "overvalued" is always only an opinion. Companies that were ahead of the curve with the labor market are getting complaints that their products are too expensive. There’s a lot of “This time is different” sentiment, especially with the Fed propping up the market. Things can have qualitative data that suggests the company should be worth more. Under 20 is undervalued. I agree that the additional money is part of the increase in value seen since 2011. Not every stock is a winner, and some stocks have their growth already priced in. You can lose 100% of what you put in. Aside from NVDA and SMCI, are other Semiconductor stocks overvalued now (high PE Ratio)? The narrative around AI might be over hyped and there could be potential downturn if the corporate revenue of enterprise adopters is not following up. This is what happens when the rest of the market gets in a bubble, people start playing really dumb games in really dumb stocks, and placing way to much of their account size into these positions. The whole market is not overvalued. Yeah of course you can keep selling CC's, but the more the underlying drops, the lower you'd need to strike your CC's (or increase the expiry date) to make it worth it, all the while you're eating losses. The details regarding how the arrangement would help Reddit’s revenue were thin, so the jump in shares That’s based on the past 5 years of P/E, most of which was tech stocks rallying, riding the wave of low interest rates. us – one of the world's premier stock analysis tools. I realize that cars aren't their only source of revenue and their other businesses are growing rapidly but still. Without resolution the government will shut down and/or default sometime in June or July, so you can anticipate the stock market will start to get impacted a few weeks prior when it is evident that a solution is not imminent. With a 5-year time horizon Tesla forward P/E is 12x, cheaper than any other megacap - and EVs are still less than 5% of the auto market, so 20x growth runway left until the EV transition is done. The market is generally forward looking. Now TSMC has other competition world wide because countries will spend 10s of billions on protecting their semi conductor production. Apple created the first one, and had a dominant market share in it at the beginning. Seems like the entire US stock market is overheated compared to the rest of the World. Ev/EBITDA: this is personally my favorite. Look up the history of smartphone adoption. Now, maybe they exceed those expectations, in which case you should buy. So the chances are extremely slim. true. This means that the cool tech moat that they do for sure have, which is low nm transistors, is limited by physically reality (which gives competitors time tl catch up and move everyone into the commodity pricing), and this is already priced into the stock because fund investors (that make up 98% public ownership of most stocks) have experts Imagine 10 years of market gains and no one wanting to buy TSMC. The "sell in May" will be real this year, primarily driven by failed debt talks in Washington DC. It's unlikely the stock won't be valued under the current valuation in the next 7 years. Tesla's current P/E is (1038). But then there might be quantitative data that contradicts the numbers, suggesting that the industry is in decline. It creates wrong incentives to focus on the stock price. Stocks can absolutely be overvalued in a fadt-growing industry and it can really knee-cap their future growth. The relative valuations of cybersecurity stocks are insane without any real justification. tldr; Wall Street considers Coinbase Global and Marathon Digital Holdings as overvalued crypto stocks. Invest now and frequently, timing the market is a fools errand. Also the pizza space which is it's core is getting increasingly fragmented over the last few years and Dominos is not really a desirable brand anymore Tremendous growth. 2x. It looks like the market is overvalued, when in reality 7 stocks are severely overvalued, and the other 493 are fairly valued, or in some cases, undervalued. I'm an old school investor. Honestly it's hard to properly predict what's undervalued and overvalued - the stock market doesn't perfectly correlate with logic. It’s not based on the present or past. Equities are being propped up by low interest rates and a lack of safe haven investment opportunities. Market is extremely overvalued compared to historic value. 14 votes, 41 comments. this is just not one of them. But please, read the sidebar rules before you post. Q3 & Q4 are likely to be back-to-back record breaking quarters for AMD, so I don't think they are overvalued. The idea is that, by investing in these companies before the market corrects, one stands to experience gains when the price of the stock increases to match the true value. 45 trillion. But a person who isn't trying to time the market wouldn't do that, they would understand the market generally goes up over time, and would just keep investing normally. The blanket idea other most stocks are going to have a better return really is an unknown at this point. If you think a stock is overvalued, think about whether it has a high future earnings growth. It might be priced by high hopes and all kinds of crazy dreams. This is for their cardiovascular indication of Wegovy. It's "overvalued" because it's PE is ~220 and the stock is the highest it's ever been. 5513), does that mean stocks are 55% overvalued? Doubtful. . Book Value is nothing but Assets-Liabilities on the balance sheet of a company. 3% decline. I think they can be a good part of a diversified portfolio, but a concentration it is unnecessarily risky. This is the norm -- not a great reason to think the market is overvalued. They are no one trick pony. You all have a direct perception to the stock price: if it goes up, it’s undervalued; if it goes down it’s overvalued. Stock has returned 150% in L1Y, but is trading at a P/E of 720+. There is no need to keep paying. Market Capitalization: NVIDIA’s market cap stands at a staggering $1. You're suggesting that P/OCF is a better measure than P/E for Amazon, but the difference between net income and OCF is made up of $15bn of depreciation and amortisation and $5bn of stock based compensation. Return of the Unprofitable IPO? Remember the IPOs of 2020-21, such as DoorDash ( DASH ), Robinhood (HOOD), Coinbase (COIN If you really keep the asset allocation as Bogleheads do, i. When companies report good earnings, the stock rises because that means faster than anticipated growth. My input is that the true price/value lies somewhere between 21. OTHER Rev Streams: Aside from the weight loss drugs everyone is crazed about. the under value and over value is based on what you deem the right metric to use, and to compare other companies in the same industry. Delve deep with our analysis of over 35,000 stocks across 40 exchanges. Your returns double in the market, TSMC stays flat as other plants come online. So by that measure, Costco Wholesale has beaten the market so far this year by only falling 18. Tesla would basically have to have a 100% market share on car sales and have to take some market share in light truck sales to live up to its speculation. you think rates are going to go up or remain high longer than the market thinks. Not even the FANG stocks grew that much btw. 5billion. It's also possible that the market suspects they'll make a lot more revenue in the near-future. Most people who express that belief point to Tesla's insanely high price to earnings ratio (P/E) to make the argument. What are you doing with this right now? Welcome to r/stocks!. Was curious on the stocks you are buying and why? How much is their market about AI How much of that market depends on some shaky AI businesses that are blowing through VC capital right now and are going to go to the wall in 12 months if some sucker doesn't buy them. This will cause the positive feedback loop to go into overdrive - the MSTR premium will increase which will allow him to further increase the BTC per share through the issuance of more stock. You now own the stock. Sure you might loose out on some gains but you might miss out on big losses too. When you buy a stock, you put up money. I've been looking into REITs recently (not that I am interested in investing in them right now), and something strange seems to be coming up quite regularly: Many are wildly overvalued and Equinix seems to be a great example of this. 2 trillion with $294 billion and gross at $114 billion tldr you gauge a companies value based on market cap, not stock price With the S&P 500 hitting new highs everyday and crossing the 46 PE mark when its usually on average 15-20 it seems like the market is getting really pricey right now. Mar 6, 2024 · Reddit looks overvalued, and I think investors should pass on this IPO. 7x compare that to VTI (US) at a P/E ratio of 24 and stock / book of 4. Join the Group Now! There's no way to say whether a stock is overvalued, except in retrospect. So, when were the companies not overvalued? That's just the next-year forward P/E - which cuts off much of Tesla's growth of 50-70% per year. 92. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome. Look at what Tesla did from 2019-2021 and look at what Ford did. Additionally, the price-to-earnings (P/E) ratio, which compares a company's stock price to its earnings per share, may be significantly higher than the industry average. Because the abnormal movement of 7 stocks makes the P/E look far more inflated than it actually is. Q1 earnings JPM gave mediocre guidance and stock dropped 6%, Citi, Bank of America, and Well Fargo all three beat earnings and left guidance mostly unchanged. The same price to free cash flow as Microsoft of 45 times? And we are looking at a market cap of 3. However, if you wanna make money it should be Everything is not overvalued tech and covid stocks are overvalued and they’re bringing the entire market up with it. FAANMG is a great example of slightly overvalued stock I like and could consider buy more of. Novo controls 1/3 of the diabetes market world wide and 1/2 of the insulin market. 5M subscribers in the stocks community. Earnings Per Share (EPS): NVIDIA’s EPS for the most recent fiscal year was reported at $1. I do hear many people talking about (and parroting) how the stock market is overvalued, and that more correction is needed. For example, if your stock is trading at 70x sales. They cite pandemic highs, etc. If the market were overvalued and you knew that and you wanted to time the market, you'd be buying GICs and bonds. I’m not saying there’s not money to be made in an overvalued market, the past 6 months have disproven that. However, stocks tend to go up in the long term. Welcome to StockInvest. If the price drops, you can look back and say, "I guess the stock was overvalued. e. Amazons current market cap is at 1. I still feel the Big 7 tech stocks are overvalued right now. With money funds paying out 5. Based on that, its valuation in 2016 was around 3. For the long term I like to have companies that have a solid value that will last. 27/15=1. Therefore, it is our job as investors to conduct a comprehensive analysis beyond just earnings figures to make informed decisions about the stock, and finally decide if the stock is currently overvalued because of wrong assumptions about the future and/or if it is because the stock has become a vehicle for craziness, meaning that it is just a Chipotle (a fast-food restaurant that offers Mexican food) crushed the S&P500 with its share price performance (up 260% in the last 5 years) and is currently trading around $1500/share at a P/E of over 65. Anyone who genuinely buys here is 100% at fault for doing absolutely no homework. 69 and 33. Apple's MC is $2. 04 trillion, highlighting its prominence in the market. Spotify's market cap is $55 billion and their revenue is like $7-$8 billion with gross profits at $2 billion. What's the extra value of any useful AI in the next 3 years. The VXUS (World Ex-US) has a current p/e of 9. To be clear, there ARE reasons to think the market is overvalued. P/E metric I believe is one of many ways of checking the valuation. Overbought is a technical term having to do with the buying and selling dynamics of a particular stock. 8 billion, has seen its stock surge 218% in the last year, closely tied to Bitcoin's price action. 2%, that's always an option. A high P/E is either justified because there's a lot of expected growth or it isn't justified and the company is likely overvalued. This is one of the safest, highest returns in the market in my opinion. 1. By Pragya Pandey Overbought US stocks are gathered in the list below and sorted by Relative Strength Index: it will help you see the speed and magnitude of price changes and maybe capitalize on their anticipated price decline. A stock trading at $13 can have a higher market cap than a stock trading at $250. Check out our wiki to learn more! Meme stock phenomenon definitely explains momentary overvaluations of stocks like GME and AMC, where short squeezes and a sudden retail pile up can definitely move the stock to irrational levels for a short time period. This overvaluation is a Welcome to Mumbai's Reddit Community! A subreddit where everyone can come together and discuss and share everything from posts, news articles, events, activities, pictures, hold meetups & overall general stuff related to the city and its surrounding metropolitan area. But Tesla? We’re talking about a much larger market cap, and a much longer timeframe. Don’t know if I should jump the bandwagon or refrain from investing. (NYSE: RDDT) stock surged over 10% on news that it has cut a deal with OpenAI. A community of Stock Market Traders and Investors in India. GDP, is also pretty accurate and also indicates we're severely overvalued in the US, at about 1. Definitely seems overvalued but also like it will continue to be successful for quite awhile. If Annual Revenue surpasses the Market Cap of a company (P/S < 1), it is a sign that the stock could be undervalued. 103 votes, 53 comments. Over 30 is over valued. There’s still plenty of quality-factor companies with PE’s under 20, PEGs under 2, low debt, lots of cash flow and good dividends. Over 5 is way overvalued. Just know when to sell and when to buy. This assessment is based on several key indicators: Overvaluation of Tech Stocks: Many tech stocks are trading at incredibly high price-to-earnings ratios, far beyond their historical averages. Welcome on /r/stocks! Don't hesitate to tell us about a ticker we should know about, market news or financial education. Costco has been a long-term market outperformer (up 148% over five years compared to Welcome to /r/StockMarket! Our objective is to provide short and mid term trade ideas, market analysis & commentary for active traders and investors. I recently bought some more 6. 71 as per stock chart data right up till March 2020 as FVRR's value is mainly coming from Asian workers using their platform. Based on the table above, the market is valuing Uber as if it is going to reach the 14% EBIT that the management is targeting and grow its revenue by 200% over the next decade. I appreciate this is a value investing sub. No, because if their stock goes down - many people leave (as seen with Shopify). 20-30 is valued correctly. (ROOT), each with bleak growth prospects, are best avoided now. the Buffett indicator, or total US stock market cap measured by Wiltshire 5000 vs. Recycling over and over the same stories worked for a while as it was a safe recipe for making money, but it isn't a long term content strategy. There is no way the math adds up on the market right now. Stock price is, generally speaking, irrelevant. All four bounced back after the market correction finished. Right now I am currently buying INTC and LMT because they seem to be the only stocks I have that are trading at low valuations. I don't buy things with high PEs. until someone materially beats them at this game, this will remain a 500b plus dollar company. International stocks certainly aren’t overvalued. The current price estimates a lot of growth. Stay liquid and jump in after the dust settles. The dozen most overvalued stocks are: SunPower, Editas Medicine (EDIT), Redfin (RDFN), Tesla, Stitch Fix (SFIX), Ultragenyx Pharmaceutical ( RARE ) , United States Steel (X), Denali Therapeutics (DNLI), Intellia Therapeutics (NTLA), Cree (CREE), Enphase Energy (ENPH), and Livent (LTHM). We are in a different labor market now. In the first place, the marketplace doesn’t value companies the same way individual investors do, and in the second place, PE ratios measure a stock‘s performance against its own earnings, not against the market at large. They have much more room to grow and a lot of companies I work with have been switching to them from Shopify because supposedly the user experience is better. The overvalued stocks may be overvalued for a reason: they're safer. When i finished the calculations, i presumed that people/institutions are simply willing to pay a premium on the stock, which is fair. 5%, compared to the market's 19. However, a high market cap alone does not guarantee that a stock is fairly valued. I wanted to buy NVDA at $210 but I held because I THOUGHT it was overvalued at current market with trailing P/E 50s, forward P/E ~35-40 and PEG 2. The undervalued companies may have great financials and the whole 9 yards, but they may also involve a degree of uncertainty as to their future. This is not a debate about timing the market vs. When unprofitable growth tech companies have been rerated to trade at 5-10 times sales, I don't really understand why cybersecurity companies deserve to still be trading at 20 When it comes to understanding how overvalued the market is, the Buffet Indicator* (total market cap over USA GDP) is for sure one of the most popular ratios. As S curve adoption kicked in and new competitors came into the space Apple lost market share (as a percentage of the market), while still gaining a ton new customers. 8 trillion now. " But you can also have a bunch of people agree that a stock is overvalued and then it goes up and never comes back down again. The organic India growth over the last few quarters has been negative or flat at best. The market is only expecting 8% revenue growth from it right now. My question is, if you're out of the stock market, how are you protecting against inflation? M1(money supply) is up 50% YTD. If a ton of people rush in to buy a stock that is still undervalued, then it would be overbought and undervalued. Cybersecurity seems to be the most overvalued sector in the market right now. Investors who buy overvalued stocks run the risk of having their shares plummet in value when the market realizes their true worth. Its fine to buy overvalued stock that institutions and private investors like. DCA—consistent research has proven DCA always wins. The market is in a big volatility period and no one knows what will happen after the election. For comprehensive information, visit our website: https://stockinvest. Agreed. However once again, inflated stock prices are often more price sensitive to economic downturns (on average). However, the S&P 500 from December 2019, just before the pandemic, it was 3,200. 25 - its earnings would have to increase 250% to reach PE 25. SELECT trial: Additionally they plan to release their SELECT trial data Nov 11 this week. Without knowing how many shares there are it's a random number. 3x revenue. Maybe “this time is different” and today’s big tech companies can really justify historically low earnings relative to price, but in general, if you’re going to average P/E, should be done for several decades, not a five year period starting with nearly zero Welcome to r/stocks!. Lots of the meme stocks are just hype, and if the hype leaves the price will drop. High interest rate environment has been pretty good to banks in the past year, posting strong earnings every time. But by looking into S&P index constituents there are many stocks that looks overvalued to me (based on PE ratio, I will assume that 25PE is a reasonable PE for value stocks for a time to come): - AMZN PE 62. Communications Services and Consumer Defensive stocks are still at fairly reasonable levels. Benefit from stock signals, AI-driven insights, and more. If so, then it is possible that others have also reached the same conclusion and thus are willing to overpay for the stock now. Sep 13, 2021 · So, we believe overvalued Reddit stocks Upstart Holdings (UPST), Clover Health Investments (CLOV), and Root Inc. Price-to-Sales Ratio: P/S Ratio = Market Cap/Annual Revenue. People buying calls to short squeeze know exactly what they are doing. Earnings still drive long-term value, so P/E is definitely relevant, regardless of the industry. But it's ignorant to label a whole industry as "a bunch of overpriced stocks" i see, that is a good point. There's only so much Marvel and Star Wars content people can consume until fatigue sets in. Good analysis . 8 trillion. Investors subscribing to the value investing approach believe it's possible to identify stocks that are trading at a price below their intrinsic value. May 18, 2024 · Reddit Inc. Sure, the stock market has made him richer as it is a way of accelerating cash flow but with his stock market performance alone he would not be anywhere near what he is today. 3 million cars and 11 million trucks sold in the US in 2021. You could own the stock for decades without paying anything else. 7 and stock / book value of 1. If industrial stocks historically sell at a PE of 15 (23. If you buy $10,000 worth of stock and it disintegrates, you have lost Even if the stocks have lower market beta than most stocks, you are still taking the idiosyncratic risk of investing in an individual stock or specific sector. Dont look at price. It's a delicate balance. us. lets say regional banks should trade at 10x earnings and 180% of BV, assume that is the consensus standard, and there will be outliers. Come on at least stick with your own conviction. 2023 EPS goes down to 64x already. So the stock would have to be overvalued for this amount of time. If they crack this with better investments in adtech and marktech and associated GTM capabilities and manage to keep the audience, the data they hold on consumer The Market Has Peaked Evidence suggests that the market, especially the tech sector, is currently at or very near its peak. However, the amount of money that has poured into the economy in general has physically changed the picture. Nvidia shouldn't be a subject. Extreme volatility is expected. The assumption should always be that the market isn't the stupid one and that it's you missing something. I think this is an issue that is starting to show up across the board. So I'm not sure whether the valuations between regions would be "regulated" by people looking at their stock allocation. Between market intel and research / data remonitization, and better targeting, there is no reason Reddit couldnt get to FB level of marketing (e. Same way Nvda is overvalued. Diversifying beyond the S&P is advisable when things are flying high based on history. Maybe this is typical for tech stocks and I'm totally wrong, but I personally feel these aren't great numbers at a glance. For beginner advice, brokerage info, book recommendations, even advanced topics and more, please read our Wiki here. It just means there are parts of the market that are categorically overvalued or in a high growth phase. Warren Buffet uses the free cash flow from the insurance company BRK owns in order to accumulate dividends from companies he believes won't lose a lot of value. Yes, it (the US market) is incredibly overvalued by just about every metric - CAPE, PE, Buffet ratio. Also, if you think the valuation is excessive you should support companies paying their employees with stock. 5. The entire street is bullish and they start to work together on 10-15 names that they all agree on are starting to grow as companies with new products or expansion of margin and cash flow. Today, it is at 204%, which means "significantly overvalued", but this doesn't take into account what could be the new normal Yes it's had it's ups and downs and so more or less overvalued depending on the moment, but in general the stock has appreciated by 40X during that period. e. YoY is expected to be lower but Q2 22 was a record breaking quarter in terms of revenue. ads ppl actually want to see). If you want income, bond funds are better IMO. Welcome on /r/stocks! Don't hesitate to tell us about a ticker we should know about, market news or… The market will always be higher than day X, at some point. Computing is big money with AI only going to be more and more important in the coming years. Maybe it's just the wording, but it still doesn't make sense. The stock market is forward looking. It is overvalued if they fail on FSD and further energy innovation and market lead on EVs. A common belief is that Tesla is grossly comically overvalued. Feb 18, 2025 · Reddit RDDT shares are currently overvalued, as suggested by its Value Score of F. And i do believe that we are in a contractionary period. Because a stock continues to go up does not mean it’s no longer overvalued. Of course, many of them will fail, as with any industry experiencing tremendous growth, and valuations are high. I think McDonald's is a great example of that. For those interested in a smaller competitor doing similar stuff: BIGC (BigCommerce). Not saying it's not "overvalued", but assuming it's overvalued based on a single metric is a little silly. Under 1 is undervalued. When you own a stock, the worst that can happen is the value goes to zero. Everyone had fomo; when it started falling after proving everyone wrong, yll are bragging that it’s overvalued and sell. You’ll just get called a boomer on here if you mention them though. 15 billion. But they haven’t failed yet so the valuation will remain as such. 40 times which is on a bit of a high side? 2. Price-to-Book Value: P/B Ratio = Market Cap/Book Value. This is basically creating zombie stocks and further pivoting the market from creating value that will eventually translate into a higher stock price to the “all it takes” to inflate the stock price strategy. Since then, it has delivered expected revenue growth every year except 2017 (at or above 12. However, cyclical recessions happen every 7 years and the last one was 4 years ago. g. Then you’re looking at a market cap of 2. but if that is the standard, if a bank is trading at 20x earnings and 220% of book, is it over valued? maybe, you need to dig In addition to that their net tangible assets is only $88mil which is pretty bad when they have barely any income(or losing money) and their market cap is 28. Right now for all the big tech like Apple, Microsoft, Amazon, I see their P/E is high meaning they are overvalued? When I see comments on this sub, they express a similar feeling of most of the companies being overvalued. Hello, Congrats to all bulls who held this week. I believe that "revenue" is a sufficient matrice for valuing a group of stocks. 6% every year). overvalued is a fundamental l term having to do with the valuation of the company. There were 3.
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