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Exact(57)
Now suppose valuation multiples rise again in the coming years.
In our opinion this is not reflected in the current valuation multiples.
However, given the unattractive valuation multiples, we retain our sell stance and £20 price target.
The number would be far higher if valuation multiples and margins were slimmer.
By 2022, Tesla should be a more mature company attracting less growth-oriented valuation multiples.
There has been a lot of corporate activity already in the space and valuation multiples are now relatively well settled.
We expect this uncertainty to cast a pall over the exchange and interdealer broker space, constraining valuation multiples.
Using market valuation multiples of five times that means New G.M. must generate operating cash flow somewhere in the order of $19 billion annually.
Similar(3)
But Nuance's sky-high valuation multiple is a stretch.
Disney paid $4.94bn for Marvel, which gave it a valuation multiple of about seven.
To justify Tesla's high 2016 valuation multiple, revenue would need to keep growing at a fast clip.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com