Equity · Core
Growth Stock
A growth stock is priced for high expected earnings or sales growth — a duration asset dressed as an equity.
Definition
High P/E or EV/sales, reinvestment over payout, and a story about TAM. Duration is long: a rate rise compresses the multiple even if the story holds. ‘Growth’ is a factor bucket, not a moral category.
Why it matters
Style cycles (growth vs value) dominate many active books. Rates, not just earnings, mark growth.
Case
2020–21 growth re-rated as real yields fell; 2022 de-rated as they rose. Same sales print, different discount rate.
How to read it
Separate volume growth, margin, and multiple. If the thesis needs the multiple to expand, it is a rates trade.
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