With the recent correction in the stock market and high-growth tech companies taking the biggest hit, many investors are wondering if they should cut their losses short and move into greener pastures. This definitely depends on the investor’s game plan when investing, be it for the long term or short term. In this article, I’ll be sharing with you how to analyze high-growth tech companies so you can pick the right ones for your portfolio. I’ll be using Lemonade (NYSE: LMND) as an example for this article.

1. Strong MOAT or Disruptive Factor

The first criteria to look out for is a very big qualitative factor and that is, for the company to have a very strong moat and/or a disruptive factor to it. First off, to clarify what a moat is. An economic moat is known as a businesses’ ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms. A strong moat allows the company to maintain its lion’s share within the market without having to cut margins to fight with its competitors.  ...