Session 10 (Val MBA): More on Growth!

If today’s class seemed to pass by in a blur, it is because we covered a lot during the class. We began with a look at why equity research promises so much and delivers so little, and in that context, I thought you might find it interesting to see the analysts who showed on the Institutional Investors’ All America Team last year:
https://www.institutionalinvestor.com...
We then moved into discussion of fundamental growth rates, starting with non-cash net income and then moving on to operating income. I mentioned that incredibly boring paper that I have on accounting returns, and if you want to be bored and perhaps sleep better, here is the link:
https://papers.ssrn.com/sol3/papers.c...
It is guaranteed to work better than a sleeping pill!
We then looked at the more general question of how to estimate growth and cash flows, when margins are changing. In particular, I used Airbnb’s IPO valuation as an illustrative example. If you are interested in getting more detail on my reasoning, you can try this post that I had at the time of the IPO:
https://aswathdamodaran.blogspot.com/...

Start of the class test: https://pages.stern.nyu.edu/~adamodar...
Slides: https://pages.stern.nyu.edu/~adamodar...
Post class test:
https://pages.stern.nyu.edu/~adamodar...
Post class test solution: https://pages.stern.nyu.edu/~adamodar...