Pulmonx (Pulmonx) Predictability Rank

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What is Pulmonx Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Pulmonx Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

Pulmonx Predictability Rank Related Terms

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Pulmonx (Pulmonx) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » Pulmonx Corp (NAS:LUNG) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

4NI:Germany

Address

700 Chesapeake Drive, Redwood, CA, USA, 94063

Website

https://www.pulmonx.com

Pulmonx Corp is a commercial-stage medical technology company. It provides a minimally invasive treatment for patients with severe emphysema, a form of chronic obstructive pulmonary disease (COPD). the company's solutions comprised of the Zephyr Endobronchial Valve, the Chartis Pulmonary Assessment System and the StratX Lung Analysis Platform. It generates revenue through the sale of products to distributors and hospitals in the U.S. and international markets.

Executives

French Glendon E. Iii	director, officer: President and CEO	700 CHESAPEAKE DRIVE, REDWOOD CITY CA 94063
Geoffrey Beran Rose	officer: Chief Commercial Officer	5124 ROCKWOOD PARKWAY NW, WASHINGTON DC 20016
John Mckune	officer: Interim CFO	46668 CRAWFORD CT., FREMONT CA 94539
David Aaron Lehman	officer: General Counsel	C/O INTERSECT ENT, INC., 1555 ADAMS DRIVE, MENLO PARK CA 94025
Derrick Sung	officer: Chief Financial Officer	C/O IRHYTHM TECHNOLOGIES, INC., 650 TOWNSEND STREET, SUITE 380, SAN FRANCISCO CA 94103
Alissa Hsu Lynch	director	700 CHESAPEAKE DRIVE, REDWOOD CITY CA 94063
Richard M Ferrari	director	2118 WALSH AVENUE, SUITE 210, SANTA CLARA CA 95050
Tiffany Sullivan	director	700 CHESAPEAKE DRIVE, REDWOOD CITY CA 94063
Boston Scientific Corp	10 percent owner	300 BOSTON SCIENTIFIC WAY, MARLBOROUGH MA 01752-1234
Daniel P Florin	director	56 E. BELL DRIVE, WARSAW IN 46581
Mead Dana G Jr.	director	2750 SAND HILL ROAD, MENLO PARK CA 94025
Thomas William Burns	director	C/O GLAUKOS CORPORATION,, 26051 MERIT CIRCLE, SUITE 103, LAGUNA HILLS CA 92653
Georgia Melenikiotou	director	C/O INSPIRE MEDICAL SYSTEMS, INC., 5500 WAYZATA BOULEVARD, SUITE 1600, GOLDEN VALLEY MN 55416
Staffan Lindstrand	director	C/O ODLANDER, FREDRIKSON & CO. AB, STRANDVAGEN 5B, STOCKHOLM V7 SE-114 51