Valuation is not revenue is not profitability. Say your dicey tech stock has a beta of 2 & the S&P500 is expected to make 5% this year. CAPM says you'll have an expected return on capital assets of 10% given the zero risk-free rates we have now. That 10% figure in turn drives a valuation model where you plugin rosy growth probabilities & factor in the exploding populations in the emerging markets & do the all important scenario-analysis on what if just 0.1% of those folks bought my product. That spits out numbers that'll make your head spin. I've seen $1 iphone apps valued at $100 million simply cause that's how the valuation model is set up. Financial math is simply legalized delusion :)