Hyper-growth

A hyper-growth company is one whose revenue is compounding faster than the market can comfortably underwrite — typically expanding a still-young category while reinvesting nearly everything it earns. The investment question is rarely whetherthe business is growing; it is how long the growth can persist, what it costs to sustain, and how much of that future the price already assumes. We treat these names as options on a runway rather than as steady-state cash machines: small changes in the durability of growth swing intrinsic value far more than any single quarter's print.

Because reported earnings are thin or deliberately reinvested, trailing multiples are uninformative in isolation. We anchor instead on the cash the business could generate once growth normalizes, then ask what set of assumptions the current price implies — and whether those assumptions are merely optimistic or frankly heroic. The gap between a fair price and a dangerous one is usually just a few years of sustained compounding.