Charles Lemonides of ValueWorks recommends stocks that are bargain-priced versus larger competitors It’s natural for investors to be fixated with companies that dominate their industries, but smaller rivals can often offer better values, according to Charles Lemonides, the founder of ValueWorks. Lemonides, whose firm manages about $400 million through a hedge fund and several strategies for individual investors in New York, suggested looking at ratios of enterprise value (the market capitalization of a company’s stock, plus its debt less its cash) to estimated sales and earnings before interest and taxes, or EBIT: What to look for in the next wave of IPOs, after SpaceX made history Play video: What to look for in the next wave of IPOs, after SpaceX made history Company EV/ forward sales EV/ forward EBIT Projected revenue CAGR from calendar 2026 through 2028 The valuations are based on consensus sales and EBIT estimates among analysts polled by FactSet. The right-most column includes projected compound annual growth rates (CAGR) for the six companies’ revenue over the next two calendar years.
These all exceed projected revenue CAGR of 8.7% for the S&P 500 and 8.4% for the S&P 500’s consumer discretionary sector. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it. I would like to receive updates and special offers from Dow Jones and affiliates.
I can unsubscribe at any time. He used as one example the ride-share industry. While there is an advantage to being a more-established player in an industry, customary expectations of economies of scale didn’t hold true for Lyft and Uber , he said.
The consensus estimate among analysts polled by FactSet is for Uber’s 2026 revenue to total $57.8 billion, up 55% from $37.3 billion in 2023. But Lyft is expected to post $7.4 billion in revenue for 2026, up 68% from $4.4 billion in 2023. Lemonides also likes Lyft as more of a “pure play” on the U.S. ride-sharing business than Uber.
Lyft operates almost exclusively in the U.S and nearly all of its revenue comes from ridesharing. Uber reported that 46% of its second-quarter revenue came from outside the U.S. and 48% from delivery and freight services. Maplebear , which does business as Instacart, trades at much lower valuations to sales and EBIT estimates than its rival DoorDash .
Instacart has traditionally focused on delivering groceries, while DoorDash mainly delivers prepared food from restaurants, but each is branching out into the other’s territory. Lemonides called DoorDash’s main business “easier” than that of Instacart, but also pointed to the latter’s competitive moat. Tesla trades at a valuation-to-sales multiple five times as high.
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