Does it make sense to take year-over-year quarterly revenue growth and divide it by enterprise value over forward revenue?
Background: I'm evaluating software stock that got crushed during the SaaSpocalypse. Jason Lemkin showed them on a graph with EV/forward revenue on the y-axis and latest quarter revenue growth year-over-year.
I'm wondering why one would bother with both ratios. Why not just combine them into a single metric and rank the stocks accordingly. If it's not appropriate, would some adjustments make it sensible?
Similarly, I see Joel Greenblatt uses two separate metrics for evaluating quality vs price, but surely there must be a way to combine them into a single ranking.