– Many stocks trade at 100x+ P/E or no profits yet – Market factors in future growth, not present earnings – Investors debate sustainability of current multiples
Why Valuations Are High
– Rapid user growth and digital adoption – Scalable models with network effects – Scarcity of listed consumer tech players
Signs of Overvaluation
– High revenue but no clear path to profitability – Stock price far above fundamentals or peers – Reliance on heavy cash burn for growth
Market Risks in 2025
– Global tech correction can trigger selling – Interest rate hikes reduce future value of cash flows – IPO lock-ins expiring = insider sell pressure
Investment Insights
– Avoid buying purely on momentum or hype – Focus on unit economics, not just GMV/user count – Use SIPs and staggered entry in high-valuation sectors