RE: LeoThread 2026-02-26 21-29
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If…Not…When
The AI-driven repricing of public companies has shifted the debate from when cash flows will erode to whether those future cash flows have any value at all.
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Previously the question was timing—10 years? 20 years?—now it’s whether future revenues and RPO are worth anything.
When "if" questions arise about a company’s future, the prudent response is to re-rate P/Es lower, revenue multiples lower, and WACCs higher, embedding investors with a large margin of safety.
This phase shift is significant and is currently unfolding.
Firms in the direct line of repricing could see valuations compress to roughly 1–3x free cash flow.
That will likely drive deep cuts to stock-based compensation, since it materially impacts cash flow; the result would weaken employee retention and, in turn, growth, revenues and profits—creating a reflexive loop.
More downward pressure is probable.
The spread between the equal-weight S&P 500 and the cap-weighted S&P 500 offers a simple gauge of the degree of repricing.
Good luck to all the players!