Every once in a while, the market prices a quality business as if it has been disrupted. The usual cause of this is weak results for 2-4 quarters followed by management pulling guidance.
There are many famous examples of this. In 2022, Meta at $88 was priced like a company that would never grow. Netflix in 2022 was similar. A few quarters of slowing subscriber growth were enough for the market to give up on it. Microsoft traded at a low-teens earnings multiple for 10 years before the cloud re-rating.
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