The answer: not much more expensive than OTHER expensive stocks in the market. Granted, this is all based on publicly traded companies, not privately funded start-ups. If I had a thorough history against which to compare current fintech or other start-up valuations this might look quite different.
But here is the story. This chart shows the EBITDA/EV yield (higher = cheaper) for both tech stocks and the overall market. On top is the median valuation for tech vs. market, and on bottom is the EBITDA/EV yield for the most expensive 10% of tech vs market. You can see that in the late 90’s/early 00’s expensive tech stocks were MUCH more expensive than expensive stocks in the market in general. Not so today.
Its also fun to look at the median valuation difference between tech and the market median. Tech is typically 25% more expensive, and today is 20% more expensive based on EBITDA/EV yield.
Doesn’t exactly scream bubble, does it!
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What’s the overlap of stocks between the top 10% most expensive tech stocks and the top 10% most expensive stocks? Also, it would be interesting to divide these stock prices by SPY to get a better sense of alpha.