re: Lululemon drops $10.54 a share in one day despite beating estimates

quote:

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Can people stop using P/E as some holy number. Its pretty stupid to use for growth stocks as earnings hopefully won't be terribly high since they should be spending that money to grow.

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Is there a comparative metric that you prefer to use for growth companies? Price to sales, maybe?

As long as people use something, and it's a rational, useful metric, I don't think the particular metric(s) is all important. But so much of the time (and not just here), people seem to be relying on gut feel or anecdotals. I try to use a cross section of fundamentals when selecting a longer term investment, including P/E, P/S, dividend history, free cashflow, etc. For trades, it's more about the shorter term technicals.

I might trade LULU. But it pretty well fits what I refer to as the "FFF" (female fashion fad), so I don't have it on any investment watchlists.