In recent quarters, I've noticed a spike in investors looking into the cybersecurity (HACK) space. While most investors are looking for stocks to add to their shopping cart, there's also been a decent portion of investors who are hoping to bet against overpriced cybersecurity plays. This article serves as a guide to help protect investors from making the wrong bets.
Misleading Short Signs
1. Inflated TAM
Source: Aswath Damodaran
I've witnessed a lot of investors bet against a cybersecurity stock because they think its TAM (total addressable market) is overstated. This is often