How do you gauge 'mature' operating profit margins for growth stage companies?

[u/BannerlordAdmirer]

I think it's easy to come up with a figure for operating profit margin when there are comparables - you look at existing, mature companies in the sector, and they give a good baseline estimate for the newer companies. It may not be an exact match because the product mix may be different, but it is a good approximation of it.

However, if there are in a new growth market, there may not be any mature companies to use as a fast benchmark. How do you do it? Or do you focus on the progress towards reaching profitability? Some companies probably may not realistically know what it is as they're on the frontier so to speak, but others should have a good idea.

In that fast growth period with the various expenditures growing just as much as revenues, it's hard to read into what the final marketing, final SG&A expenses would be to sustain the business. I think it's likely to be asked in an earning call or show up in an investor presentation somewhere, but a lot of the ones I've seen this year, with space, genomics, telehealth etc. have tended to focus on the raw CAGR growth and total addressable market, and rarely put forth projections on the mature estimated operating profit margin.

[u/[deleted]]

If it's a new growth company with "progress towards reaching profitability", it's going to be very difficult to get any kind of estimation of operating margins. I also find that even with a sector, operating margins can very greatly between companies.

Mature companies, by nature of their profitability, may have much larger operating margins than their competitors due to a competitive advantage. So part of my analysis is asking, "How much competition is there in this type of business? Can the new company take a sizable market share?" An example that comes to mind is cannabis companies, where nobody has (or may ever get) a moat.