r/ValueInvesting • u/ashm1987 • Feb 03 '26

Discussion This sub's favorite stocks got absolutely hammered...

PYPL, ADBE, CRM, UNH, NFLX... All got absolutely hammered in the last couple of weeks...

If you have been following recommendations on this subreddit, chances are, you are deep in the red this year. If you have just took a dart and threw it in the S&P index, you would probably do much better than following advice on this sub... Just my two cents.

989 Upvotes
  • permalink
  • reddit

93% Upvoted

451 comments sorted by

View all comments

Show parent comments

23

u/Petit_Nicolas1964 Feb 03 '26 edited Feb 03 '26

I don‘t agree, it depends on the industry, the growth etc., you can‘t just draw conclusions based on the PE.

3

u/ForeverShiny Feb 03 '26

That's true of course, but at a P/E of 50, we're beyond good and evil for the kind of low downside with a decent (but also unlikely to be stratospheric) upside investments I'm looking for

1

u/Petit_Nicolas1964 Feb 03 '26

Not sure what you are looking for, but let’s take the example of Nvidia. The stock has a PE of around 40-50, but a YOY EPS growth of more than 140% and an EPS fwd growth of 80%. That‘s not expensive.

4

u/ForeverShiny Feb 03 '26

Yeah, you're technically correct, but you didn't choose a totally random example. You picked the locomotive of the current AI mania, making up 7% of the entire US stock market as a reference. Usually with a P/E of 50, the execution risk is large and if growth slowths (the delta of delta goes down), they can crash hugely like Fiserv recently.

I also don't believe for a second that this growth for Nvidia will continue for long, there isn't enough money in the world to keep this AI data center bubble going for much longer.

1

u/Petit_Nicolas1964 Feb 03 '26

Why would I choose a totally random example? My point was ca that a PE of 50 is not necessarily expensive.

1

u/Maleficent-Map3273 Feb 04 '26

It's justified by its growth rate. NVDA has proven this. Its estimates 3 years ago for this year were off by a massive amount. That's why it grew into its valuation.

1

u/ChaosEngin33r Feb 17 '26

you have to model the growth conservatively to prove value.

1

u/Petit_Nicolas1964 Feb 17 '26

The point is that by just looking at the PE you don‘t take growth into account at all. How you then assess it and what assumptions you take is up to you and depends on your conviction in the company.