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Growth at a reasonable price

Seek above-average business growth without paying a price that requires perfect future results.

Core approach: Compare valuation with expected growth, business quality, balance-sheet risk, and the length of the runway.
Suitable for: Investors wanting a middle ground between value and growth.

Method overview

Growth at a reasonable price combines the search for above-average business growth with valuation discipline. It avoids both slow businesses that are merely cheap and exciting businesses priced for flawless execution. Seek above-average business growth without paying a price that requires perfect future results. Key point: Growth at a reasonable price is not a style label to follow mechanically. It is a decision process with explicit assumptions, evidence, review triggers, and exit conditions.

Core principles

1Business growth and valuation must be assessed together.
2Prefer repeatable growth supported by cash flow rather than a single forecast year.
3Leave room for slower growth, margin pressure, and valuation normalization.
4Separate the long-term thesis from short-term price movement in Growth at a reasonable price.
5Write in advance what would make the method unsuitable for the case being analyzed.

How to apply it

1Screen for consistent revenue, earnings, and free-cash-flow growth.
2Determine the competitive and reinvestment sources behind that growth.
3Compare valuation with realistic multi-year scenarios and peer alternatives.
4Review when growth, quality, or the expected return changes materially.
5Write the main assumptions, fair value range, and monitoring signals before buying.
6Compare actual evidence with the original thesis instead of judging only by unrealized gain or loss.