⁠App Economy Insights
$GRAB Grab Q4 FY24:

💰 GMV +20% Y/Y to $5.0B.
🏍️ Group MTUs +17% Y/Y to 44M.

• Revenue +17% to $764M ($6M beat).
• Adj. EBITDA +173% to $97M ($3M beat).
• FY25 Revenue +21% to $3.37B ($0.3B miss). https://t.co/QINaxZjEw7
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⁠Quiver Quantitative
The national debt has increased by about $1.3B so far in Trump's second term.

Obviously too early for this to mean much yet, it’s noisy data, but here’s how that compares to past years over a similar time period:

2024: +$190B
2023: +$2B
2022: +$264B
2021: +$166B
2020: +$142B
2019: +$87B
2018: +$267B
2017: -$17B
2016: +$93B

Planning on posting updates as more policies get enacted, and we get a larger sample size.
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⁠Quiver Quantitative
Howard Lutnick just said:

We have to use tariffs to take care of America and try to eliminate to eliminate the IRS.

https://t.co/4nZlB6gAke
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⁠App Economy Insights
$GRAB Grab Q4 FY24:

💰 GMV +20% Y/Y to $5.0B.
🏍️ Group MTUs +17% Y/Y to 44M.

• Revenue +17% to $764M ($6M beat).
• Adj. EBITDA +173% to $97M ($3M beat).
• FY25 Revenue +21% to $3.37B ($0.3B miss). https://t.co/1N2h5WyFz3
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AkhenOsiris
Nadella used a shit ton of jargon to tell you:

THE ELEVATED MARKET PE MULTIPLE IS JUSTIFIED

Nadella: "Us self-claiming some AGI milestone, that's just nonsensical benchmark hacking to me." - modest proposal
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⁠Read
RT @corry_wang: One thing I’ve noticed in the business world is that the most successful people also tend to have the fastest email response times

I’m almost certain this is correlation not causation. But still, Satya is responding to cold emails in 4 minutes flat on a Saturday afternoon lol

@dwarkesh_sp @Microsoft insane that he responded in 4 mins https://t.co/NjB37soewX - prom
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⁠Hidden Value Gems
$BABA Dec 31 quarter:

✅ Sales +8%, acceleration vs previous quarters and ahead of consensus (+6.5%)

✅ China CMR +9% on higher take gate and GMV

✅ Cloud revenue +13% (vs 9.7% consensus)

✅ Cloud EBITA +33%

✅ Operating CF +10% ($9.7B)

✅ FCF down 31% to $5.3B on higher cloud investments

✅ Cash and Investments at $83.6B (28% of the Mkt Cap)

✅ Adj EPS +13%

✅ Headcount continues to decline to 194K vs 198K in the previous quarter
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⁠Finding Compounders
Warren Buffett on why Berkshire invested in railroads

“ You can’t move the railroad to China or India “ https://t.co/DC0gpF8SLd
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⁠Dimitry Nakhla | Babylon Capital®
A quality valuation analysis on $AMAT 🧘🏽‍♂️

•NTM P/E Ratio: 18.61x
•5-Year Mean: 17.93x

•NTM FCF Yield: 5.68%
•5-Year Mean: 5.79%

As you can see, $AMAT appears to be trading near fair value

Going forward, investors can receive ~4% LESS in earnings per share & ~2% LESS in FCF per share 🧠***

Before we get into valuation, let’s take a look at why $AMAT is a quality business

BALANCE SHEET✅
•Cash & Short-Term Inv: $8.21B
•Long-Term Debt: $5.46B

$AMAT has a great balance sheet, an A S&P Credit Rating, & 11x FFO Interest Coverage Ratio

RETURN ON CAPITAL✅
•2019: 24.9%
•2020: 27.4%
•2021: 40.0%
•2022: 43.2%
•2023: 34.2%
•2024: 30.7%

RETURN ON EQUITY✅
•2019: 35.9%
•2020: 38.5%
•2021: 51.6%
•2022: 53.4%
•2023: 48.0%
•2024: 40.6%

$AMAT has strong return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2014: $9.07B
•2024: $27.18B
•CAGR: 11.61%

FREE CASH FLOW✅
•2014: $1.56B
•2024: $7.49B
•CAGR: 16.98%

NORMALIZED EPS✅
•2014: $1.07
•2024: $8.65
•CAGR: 23.23%

SHARE BUYBACKS✅
•2014 Shares Outstanding: 1.23B
•LTM Shares Outstanding: 0.83B

By reducing its shares outstanding 32%, $AMAT increased its EPS by 47% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 47.7%
•LTM Operating Margins: 29.2%
•LTM Net Income Margins: 23.0%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~4% LESS in EPS & ~2% LESS in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $AMAT has to grow earnings at a 9.31% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be slightly less than the (9.31%) required growth rate:

2025E: $9.37 (8.3% YoY) *FY Oct
2026E: $10.14 (8.2% YoY)
2027E: $11.05 (9.0% YoY)

$AMAT has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $AMAT ends 2027 with $11.05 in EPS & see its CAGR potential assuming different multiples

22x P/E: $243.10💵 … ~14.3% CAGR

20x P/E: $221.00💵 … ~10.2% CAGR

18x P/E: $198.90💵 … ~5.9% CAGR

16x P/E: $176.80💵 … ~1.5% CAGR

As you can see, $AMAT appears to have attractive return potential if we assume >20x earnings, a multiple well above its 10-year mean & on the higher end of its historical range

Of course demand for semiconductor equipment & materials is expected to see a huge increase over the next several years & this has gotten priced in, to an extent

So $AMAT could justify its current multiple if estimates continue to be fairly aggressive & the company executes (as they have over the last few quarters)

However, those looking to accumulate today leave themselves with no margin of safety — and we know how volatile semiconductors can be during times of uncertainty

Today at $174💵 $AMAT appears to be fully valued

I’d consider $AMAT a great opportunity closer to $150💵 or ~13% below today’s price .. where I can reasonably expect double-digit CAGR while assuming 17.50x earnings

#stocks #investing
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𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.

𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.

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