Yet, Raspberry Pi (LSE: RPI) was certainly a sweet-tasting investment. On the day the budget computer maker was listed on the London Stock Exchange earlier this month at a price of £2.80, the shares at one point rose as much as 40% above the listing price. Raspberry Pi shares are still trading at about a third of their trading price.

Did the auction underwriters price them too cheaply? I think so: such a jump suggests that the higher price may have worked.

But this is already water under the bridge. As an investor, I ask myself whether I should add Raspberry Pi stock to my portfolio in hopes of future price growth.

Setting a long-term goal

As a proponent of a long-term approach to investing, I often ask myself how well I think a stock is likely to perform over the years.

If Raspberry Pi shares rise another 33%, as they have since listing on the stock exchange, they will reach £5. If the share price is allowed to grow at less than 6% a year, it would exceed £5 by 2030.

This may not sound electrifying. After all, the company does not yet pay a dividend, and 6% annual growth is little more than the current interest rate set by the Bank of England. Depositing money in the bank would involve almost no risk of capital loss, unlike purchasing shares of any company.

Raspberry Pi, on the other hand, is a uncommon success story for British technology in the London market. Its basic computers are hugely popular with frugal customers, and the simplicity of their design means there are many possible applications that can spur development.

Remember when Apple released the iPad, people questioned why anyone would want what seemed like an oversized smartphone. No one asks this these days because iPads are used in a variety of situations, from hotel check-in to warehouse management.

I think the Raspberry Pi has a huge untapped market. Last year, sales increased by 41%, after increasing by 34% the year before.

Optimistic attitude towards business – what about shares?

A forceful brand, unique market position and proprietary technology can ensure the rapid growth of the Raspberry Pi ecosystem. This could be good for the company. Reported profits last year were $31.6 million and I think they may boost in the future.

But that puts Raspberry Pi stock at a current price-to-earnings ratio of 29. It looks exorbitant to me. A price of £5 would mean a potential P/E of around 39.

Again, this seems exorbitant to me, even over a five-plus-year horizon.

We have seen the company grow rapidly. If earnings per share can grow quick enough, the potential P/E ratio will fall and a price of £5 by 2030 will certainly be possible, if not sooner.

However, I see a risk that another company may try to imitate the business model and focus on even lower production costs. Raspberry Pi had the advantage, but in the 1980s, so did Sinclair and Amstrad.

There’s a lot to like here, but the pricing is still a little too wealthy for my taste. That’s why I won’t invest.