TOITF TOPICUS COM INC SUB VTG : Bullish and Bearish Analyst Opinions

A business like Topicus is a good example... when you look at the valuation multiples a few years out, it offers very compelling returns despite the optically high multiples that it pretty much always trades at. While paying for perfection is generally dangerous, paying a seemingly high trailing multiple is acceptable if the investor has extremely high conviction in the company's future growth rate. As earnings compound rapidly, the forward multiple drops to a reasonable level, providing a margin of safety over a multi-year horizon. Long Topicus as a high-conviction compounder where predictable future growth justifies the optically expensive current valuation. If the expected growth rate decelerates or acquisition targets dry up, the market will aggressively re-rate the stock to a lower base multiple, causing significant capital loss.