Aswath Damodaran's five valuation factors

Aswath Damodaran's insightful takes on valuations have garnered him the tag "Valuation Guru" over the years. For those unaware, he is a corporate finance and valuation professor at New York University known for his pioneering research on valuations. We recently stumbled upon a podcast with 'Millennial Investing', where Damodaran discussed the factors driving the value of a business. According to Damodaran, one must consider five key factors when it comes to company valuation. These can be divided into two broad categories: quality and risk. Quality factors Revenue growth: For any business, revenue growth is the optimum quality indicator as it is purely based on how the overall business is expanding and not on cost factors that are often susceptible to market forces. As per Damodara

This article was originally published on November 24, 2023.