Valuation review

    When does new evidence justify changing a valuation model?

    Growth, margin and share-count breaks between the two latest 10-K filings, shown on real companies, with the model assumption each one should change.

    Example as of 2026-10-07 (closing prices) · version 1 · eight real companies, illustrative share counts.

    Revisit a valuation when evidence changes an input, not when the price moves. We test three inputs between the two latest 10-Ks: revenue growth (≥10%), operating margin (≥2 pp) and diluted share count (≥1%).

    HoldingInputEvidence
    NVDAgrowthRevenue grew 65.5% year over year; a model carrying a steady single-digit growth rate needs a new base.
    MSFTgrowthRevenue grew 17.8% year over year; a model carrying a steady single-digit growth rate needs a new base.
    JPMsharesDiluted shares fell 3.4%; per-share value changes even if enterprise value does not.
    AAPLsharesDiluted shares fell 2.6%; per-share value changes even if enterprise value does not.
    PGsharesDiluted shares fell 1.3%; per-share value changes even if enterprise value does not.
    NVDAsharesDiluted shares fell 1.2%; per-share value changes even if enterprise value does not.
    NVDAmarginOperating margin moved −2.0 pp (62.4% → 60.4%); the terminal margin assumption should be re-examined.

    Worked example: NVDA

    Thesis inputFY ending 2025-01-26FY ending 2026-01-25Change
    Revenue$130.50B$215.94B65.5%
    Operating margin62.4%60.4%-2.0 pp
    Diluted shares24804M24514M-1.2%

    Revenue grew 65.5% year over year; a model carrying a steady single-digit growth rate needs a new base. If the model still uses the prior year's input, its value is anchored to evidence that no longer holds.

    Assumptions

    • Share counts are illustrative; prices are the 2026-10-07 close; weights use market value.
    • Company figures are the latest annual 10-K values in SEC XBRL; "Not reported" means the company does not tag that figure.
    • Scenario returns and oil channel classifications are stated assumptions, not estimates.

    Sources

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