Stocks with high valuation such as Unity will plummet this year
2022 will be a year very different from 2021 due to the rising interest rates. In a rising interest rate environment, debt-free companies with huge profits and cheap stock valuations like FB will shine, but money-losing companies that are not able to turn profitable with extremely crazy expensive valuations like SNOW and U will crash big time. FB Price/Sales ratio is only 8. SNOW Price/Sales ratio is crazy expensive 106. U Price/Sales ratio is also very expensive 39. And if you look at the estimated revenues of this quarter revenues compare to the reported last quarter revenues, you will find that, both SNOW and U quarterly growth rates will be lower than FB quarterly growth rates. So there is no reason for money losing SNOW and U to be trading at a higher valuation than super profitable FB.
SNOW will need to crash down more than 90% and U will need to crash down 80% for the valuations to make sense. Not to mention FB is in the process of buying back massive $50 billion dollars worth of stock while SNOW and U are both constantly diluting and selling stocks. 2022 will be a year of stock valuation adjustment to make very cheap stock like FB go up and crazy expensive stocks like SNOW and U crash down to get valuations back to par. The best strategy for 2022 is to sell money-losing companies like SNOW and U and buy super profitable companies like FB. $Unity Software Inc.(U)$ $Meta Platforms, Inc.(FB)$ $Snowflake(SNOW)$
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