Offshore
Video
Startup Archive
Reed Hastings on the biggest mistake he made at the company he built before Netflix
Before Netflix, Reed Hastings founded Pure Software in 1991. Six years later he sold the company for $750 million. While most people would consider this a home run, Reed saw it as a missed opportunity and a company that never reached its potential. Reed reflects:
“When I analyzed what happened, one of the major things was a decline in talent density. With declining talent density, you need a bunch of rules to protect against the mistakes, and that only further drives out the high-caliber people. It was through that experience that I realized: I tried to run software like a manufacturing plant — reducing error and putting in process — but that doesn’t get high productivity or high talent. Instead, we should manage software much more artisanally with inspiration rather than management.”
He continues:
“Typically we humans value being nice and we value loyalty. Yet, in the workplace, that’s at tension because being nice is in contrast with our intention of being honest. I generally like people who are nice; yet, in the work place, I want you to be honest with each other so that we’re more productive. We have to find a way to give each other permission to not be conventionally nice and instead be focused on the team’s success, which is being very direct.”
The same is true of loyalty, Reed argues:
“Loyalty is something in your family. You would never fire your brother if you were tight on money — you would share, and that’s what we admire. Yet in a company, we lay people off. So this whole idea that a company is a family is unintentional and derives from all the structures of society being family. All companies used to be family companies. Then corporations have grown more recently. All countries used to be family countries and kingdoms. Basically family was the deep organizing unit. So it’s natural that that spills into how we think about an organization.”
Reed contrasts this with professional sports teams:
“[The professional sports team] is an admired model. It’s really focused on achievement. And everyone understands that you change players as you need to try to win the championship.”
He concludes:
“It’s changing the language that you use. Don’t use words like ‘We’re a family’ . . . Instead it’s ‘We’re a professional sports team and we all have to fight every year to keep our position.’ If we can upgrade we must to win the championship, which is producing a great company.”
Video source: @InvestLikeBest (2026)
tweet
Reed Hastings on the biggest mistake he made at the company he built before Netflix
Before Netflix, Reed Hastings founded Pure Software in 1991. Six years later he sold the company for $750 million. While most people would consider this a home run, Reed saw it as a missed opportunity and a company that never reached its potential. Reed reflects:
“When I analyzed what happened, one of the major things was a decline in talent density. With declining talent density, you need a bunch of rules to protect against the mistakes, and that only further drives out the high-caliber people. It was through that experience that I realized: I tried to run software like a manufacturing plant — reducing error and putting in process — but that doesn’t get high productivity or high talent. Instead, we should manage software much more artisanally with inspiration rather than management.”
He continues:
“Typically we humans value being nice and we value loyalty. Yet, in the workplace, that’s at tension because being nice is in contrast with our intention of being honest. I generally like people who are nice; yet, in the work place, I want you to be honest with each other so that we’re more productive. We have to find a way to give each other permission to not be conventionally nice and instead be focused on the team’s success, which is being very direct.”
The same is true of loyalty, Reed argues:
“Loyalty is something in your family. You would never fire your brother if you were tight on money — you would share, and that’s what we admire. Yet in a company, we lay people off. So this whole idea that a company is a family is unintentional and derives from all the structures of society being family. All companies used to be family companies. Then corporations have grown more recently. All countries used to be family countries and kingdoms. Basically family was the deep organizing unit. So it’s natural that that spills into how we think about an organization.”
Reed contrasts this with professional sports teams:
“[The professional sports team] is an admired model. It’s really focused on achievement. And everyone understands that you change players as you need to try to win the championship.”
He concludes:
“It’s changing the language that you use. Don’t use words like ‘We’re a family’ . . . Instead it’s ‘We’re a professional sports team and we all have to fight every year to keep our position.’ If we can upgrade we must to win the championship, which is producing a great company.”
Video source: @InvestLikeBest (2026)
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Offshore
Photo
Illiquid
A little lost in the TSM celebrations today is the news that State Grid Corp, just one of China's two dominant grid operators, has raised capex plans to US$574B over the next five years.
$3393 $2722
https://t.co/mYwCjkLrhP
tweet
A little lost in the TSM celebrations today is the news that State Grid Corp, just one of China's two dominant grid operators, has raised capex plans to US$574B over the next five years.
$3393 $2722
https://t.co/mYwCjkLrhP
tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capital®
RT @wallstengine: $TSM | TSMC Q4’25 Detailed Earnings Highlights:
🔹 Revenue: $33.73B (Est. $33.3B) 🟢; +25.5% YoY; +1.9% QoQ
🔹 Gross Margin: 62.3% (Est. 60.5%) 🟢
🔹 Oper Margin: 54.0% (Prior: 49%–51%) 🟢
🔹 Net Profit: $16.30B (Est. $15.2B) 🟢
FY26 CapEx mix:
🔹 CapEx: $52–$56B (vs $40.9B in FY25, Est. $48B) 🟢
🔹 70%–80% advanced node;
🔹 ~10% specialty;
🔹 10%–20% advanced packaging /testing /mask/others
Q1’26 Guidance
🔹 Revenue: $34.6–$35.8B (Est $33.2B) 🟢; +4% QoQ; +38% YoY
🔹 Gross Margin: 63%–65% (Est 59.6%) 🟢
🔹 Operating Margin: 54%–56% (Est 50.0%) 🟢
🔹 Assumed FX (for guide): $1 = 31.6
🔹 Tax rate: 16% in 2025; expects 17%–18% in 2026
Technology Mix (Wafer Revenue) (Q4’25)
🔹 N3: 28% of wafer revenue
🔹 N5: 35% of wafer revenue
🔹 N7: 14% of wafer revenue
🔹 ≤7nm total: 77% of wafer revenue
🔹 Others (≥10nm): 23% of wafer revenue (implied residual)
Revenue by Platform (Q4’25)
🔹 HPC (incl. AI): 55% of total; +4% QoQ
🔹 Smartphone: 32% of total; +11% QoQ
🔹 IoT: 5% of total; +3% QoQ
🔹 Automotive: 5% of total; -1% QoQ
🔹 DCE: 1% of total; -22% QoQ
🔹 Others: 2% of total (implied residual); QoQ not disclosed
FY25 Recap
🔹 Rev: $122.42B 🟢; +35.9% YoY (Est. +34.5% YoY)
🔹 Gross Margin: 59.9% (vs 56.1% in FY24)
🔹 Operating Margin: 50.8% (vs 45.7% in FY24)
🔹 Net Profit: $55.13B (vs $36.49B in FY24)
🔹 Wafer shipments: 15.02M (vs 12.91M in FY24)
🔹 CapEx (FY25): $40.9B
Other Key Metrics:
🔹 ROE: 38.8%
🔹 OpEx as % of revenue: 8.4% (vs 8.9% in Q3’25)
🔹 Wafer shipments: 3.96M (12" eq.)
🔹 Wafer ASP (noted): $7,324 (+7%)
🔹 Overseas fab GM dilution: 2%–3% (early), 3%–4% (later stages)
🔹 N2 dilution: 2%–3% for FY26
🔹 N3 margin: expected to “cross over” to corporate average sometime in 2026
2026 Outlook + Long-Term Targets
🔸 FY26 revenue growth: “close to 30%” (driven by AI-related demand)
🔸 Long-term gross margin guide raised: 56% (from 53%)
🔸 AI accelerator rev growth: mid-to-high 50s% CAGR (2024–2029), raised from prior mid-40s%
🔸 Long-term total revenue growth: ~25% CAGR (2024–2029)
🔸 “Foundry 2.0” industry: 14% growth in 2026 (company view)
Node Roadmap (Mgmt)
🔹 N2 “entered… high volume manufacturing” in Q4’25 at Hsinchu + Kaohsiung with “good yield”
🔹 N2P: volume production scheduled 2H’26; “performance and power” benefits
🔹 A16: on track for volume production 2H’26; includes backside power delivery (“Super Power Rail”)
Capacity + Expansion (Mgmt)
🔹 Supply-demand: “capacity is very tight”… looking at 2028 or 2029 to “narrow the gap”
🔹 Arizona: yield/defect density “almost equal to Taiwan”… “we are going to expand many fabs there”
🔹 Timing (company): AZ Fab2 now expected to enter high volume manufacturing in 2H’27; Fab3 construction started; permits underway for Fab4 + an advanced packaging fab
Advanced Packaging + Mature Nodes
🔹 Advanced packaging: ~8% of 2025 revenue; expected to be “slightly over 10%” over time. 2026 capex around 10-20% will be for advanced packaging.
🔹 8-inch: output reduced, but “continue to support” customers as long as demand is there
Commentary:
🔸 “AI is real, not only real, it’s starting to grow into our daily life.”
🔸 “I’m also very nervous about it… we have to invest about $52 billion-$56 billion for the CapEx… If we didn’t do it carefully… that would be a big disaster for TSMC.”
🔸 “I spend a lot of time… talking to my customer and then customers’ customer… I want to make sure… demand are real… they show me the evidence…”
🔸 “Capacity is very tight… we work very hard to narrow the gap…”
🔸 “We are looking at 2028 or 2029… we hope the supply gap will be narrowed.”
🔸 “I worry about the electricity in Taiwan first.”
🔸 CFO: “Our pricing will remain strategic, not opportunistic.”
🔸 Build-out reality: “It takes two to three years to build a new fab”… meaningfully helps “2028 or 2029.”
🔸 Biggest constraint: “the bottleneck is… wafer supply.” tweet
RT @wallstengine: $TSM | TSMC Q4’25 Detailed Earnings Highlights:
🔹 Revenue: $33.73B (Est. $33.3B) 🟢; +25.5% YoY; +1.9% QoQ
🔹 Gross Margin: 62.3% (Est. 60.5%) 🟢
🔹 Oper Margin: 54.0% (Prior: 49%–51%) 🟢
🔹 Net Profit: $16.30B (Est. $15.2B) 🟢
FY26 CapEx mix:
🔹 CapEx: $52–$56B (vs $40.9B in FY25, Est. $48B) 🟢
🔹 70%–80% advanced node;
🔹 ~10% specialty;
🔹 10%–20% advanced packaging /testing /mask/others
Q1’26 Guidance
🔹 Revenue: $34.6–$35.8B (Est $33.2B) 🟢; +4% QoQ; +38% YoY
🔹 Gross Margin: 63%–65% (Est 59.6%) 🟢
🔹 Operating Margin: 54%–56% (Est 50.0%) 🟢
🔹 Assumed FX (for guide): $1 = 31.6
🔹 Tax rate: 16% in 2025; expects 17%–18% in 2026
Technology Mix (Wafer Revenue) (Q4’25)
🔹 N3: 28% of wafer revenue
🔹 N5: 35% of wafer revenue
🔹 N7: 14% of wafer revenue
🔹 ≤7nm total: 77% of wafer revenue
🔹 Others (≥10nm): 23% of wafer revenue (implied residual)
Revenue by Platform (Q4’25)
🔹 HPC (incl. AI): 55% of total; +4% QoQ
🔹 Smartphone: 32% of total; +11% QoQ
🔹 IoT: 5% of total; +3% QoQ
🔹 Automotive: 5% of total; -1% QoQ
🔹 DCE: 1% of total; -22% QoQ
🔹 Others: 2% of total (implied residual); QoQ not disclosed
FY25 Recap
🔹 Rev: $122.42B 🟢; +35.9% YoY (Est. +34.5% YoY)
🔹 Gross Margin: 59.9% (vs 56.1% in FY24)
🔹 Operating Margin: 50.8% (vs 45.7% in FY24)
🔹 Net Profit: $55.13B (vs $36.49B in FY24)
🔹 Wafer shipments: 15.02M (vs 12.91M in FY24)
🔹 CapEx (FY25): $40.9B
Other Key Metrics:
🔹 ROE: 38.8%
🔹 OpEx as % of revenue: 8.4% (vs 8.9% in Q3’25)
🔹 Wafer shipments: 3.96M (12" eq.)
🔹 Wafer ASP (noted): $7,324 (+7%)
🔹 Overseas fab GM dilution: 2%–3% (early), 3%–4% (later stages)
🔹 N2 dilution: 2%–3% for FY26
🔹 N3 margin: expected to “cross over” to corporate average sometime in 2026
2026 Outlook + Long-Term Targets
🔸 FY26 revenue growth: “close to 30%” (driven by AI-related demand)
🔸 Long-term gross margin guide raised: 56% (from 53%)
🔸 AI accelerator rev growth: mid-to-high 50s% CAGR (2024–2029), raised from prior mid-40s%
🔸 Long-term total revenue growth: ~25% CAGR (2024–2029)
🔸 “Foundry 2.0” industry: 14% growth in 2026 (company view)
Node Roadmap (Mgmt)
🔹 N2 “entered… high volume manufacturing” in Q4’25 at Hsinchu + Kaohsiung with “good yield”
🔹 N2P: volume production scheduled 2H’26; “performance and power” benefits
🔹 A16: on track for volume production 2H’26; includes backside power delivery (“Super Power Rail”)
Capacity + Expansion (Mgmt)
🔹 Supply-demand: “capacity is very tight”… looking at 2028 or 2029 to “narrow the gap”
🔹 Arizona: yield/defect density “almost equal to Taiwan”… “we are going to expand many fabs there”
🔹 Timing (company): AZ Fab2 now expected to enter high volume manufacturing in 2H’27; Fab3 construction started; permits underway for Fab4 + an advanced packaging fab
Advanced Packaging + Mature Nodes
🔹 Advanced packaging: ~8% of 2025 revenue; expected to be “slightly over 10%” over time. 2026 capex around 10-20% will be for advanced packaging.
🔹 8-inch: output reduced, but “continue to support” customers as long as demand is there
Commentary:
🔸 “AI is real, not only real, it’s starting to grow into our daily life.”
🔸 “I’m also very nervous about it… we have to invest about $52 billion-$56 billion for the CapEx… If we didn’t do it carefully… that would be a big disaster for TSMC.”
🔸 “I spend a lot of time… talking to my customer and then customers’ customer… I want to make sure… demand are real… they show me the evidence…”
🔸 “Capacity is very tight… we work very hard to narrow the gap…”
🔸 “We are looking at 2028 or 2029… we hope the supply gap will be narrowed.”
🔸 “I worry about the electricity in Taiwan first.”
🔸 CFO: “Our pricing will remain strategic, not opportunistic.”
🔸 Build-out reality: “It takes two to three years to build a new fab”… meaningfully helps “2028 or 2029.”
🔸 Biggest constraint: “the bottleneck is… wafer supply.” tweet
Offshore
Video
Moon Dev
its hard to be patient as a trader
thats why i automated my trading
but since im building the quant app, i made patience built in https://t.co/zasZLtrauv
tweet
its hard to be patient as a trader
thats why i automated my trading
but since im building the quant app, i made patience built in https://t.co/zasZLtrauv
tweet
Offshore
Photo
Moon Dev
[THE END]
my $4,500,000 short printed
while the entire chat was rooting for my liquidation
this reemphasizes why i dont trade by hand
and why i dont show my positions or trade data
imagine having 50 people telling you what to do via chat and dm all day
no way. done hand trading. done sharing stats.
this is war
tweet
[THE END]
my $4,500,000 short printed
while the entire chat was rooting for my liquidation
this reemphasizes why i dont trade by hand
and why i dont show my positions or trade data
imagine having 50 people telling you what to do via chat and dm all day
no way. done hand trading. done sharing stats.
this is war
[$4,500,000 full tilt trade]
going to be going over what happened yesterday
how i ended up full porting short (against the trend)
and what my actions mean for things moving forward
already took my mental health break
back at it at 8 est, get a ticket: https://t.co/YGcRzsCJwf tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capital®
A quality valuation analysis on $NOW 🧘🏽♂️
•NTM P/E Ratio: 52.28x
•3-Year Mean: 34.73x
•NTM FCF Yield: 3.61%
•10-Year Mean: 2.49%
As you can see, $NOW appears to be trading below fair value
Going forward, investors can expect to receive ~50% MORE in earnings per share & ~45% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $NOW is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $5.41B
•Long-Term Debt: $1.49B
$NOW has a strong balance sheet, an A S&P Credit Rating & 210x FFO Interest Coverage Ratio
RETURN ON CAPITAL❌➡️✅
•2021: 4.3%
•2022: 5.2%
•2023: 8.1%
•2024: 11.8%
•LTM: 13.3%
RETURN ON EQUITY❌➡️✅
•2021: 7.0%
•2022: 7.4%
•2023: 27.3%
•2024: 16.5%
•LTM: 16.8%
$NOW return metrics are improving & trending in the right direction — a sign the business is becoming more efficient
REVENUE✅
•2020: $4.52B
•2025E: $13.24B
•CAGR: 23.97%
FREE CASH FLOW✅
•2020: $1.37B
•2025E: 26.79%
NORMALIZED EPS✅
•2020: $0.93
•2025E: $3.48
•CAGR: 30.20%
SHARE BUYBACKS❌
•2019 Shares Outstanding: 986.12M
•LTM Shares Outstanding: 1.05B
MARGINS🆗 / ✅
•LTM Gross Margins: 78.1%
•LTM Operating Margins: 14.4%
•LTM Net Income Margins: 13.7%
SGA is $NOW largest expense eating ~41% of LTM revenue, something to keep an eye on
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~50% MORE in EPS & ~45% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $NOW has to grow earnings at a 17.37% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2026 - 2028 EPS growth over the next few years to be slightly less (16.84%) than the (17.37%) required growth rate:
2025E: $3.48 (25% YoY) *FY Dec
2026E: $4.08 (17% YoY)
2027E: $4.89 (20% YoY)
2028E: $5.57 (14% YoY)
$NOW has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $NOW ends 2028 with $5.57 in EPS & see its CAGR potential assuming different multiples
34x P/E: $189💵 … ~12.2% CAGR
33x P/E: $184💵 … ~11.1% CAGR
32x P/E: $178💵 … ~9.9% CAGR
31x P/E: $173💵 … ~8.8% CAGR
30x P/E: $167💵 … ~7.6% CAGR
29x P/E: $161💵 … ~6.4% CAGR
As you can see, we’d have to assume a >34x multiple for $NOW to have attractive return potential
At 32x earnings $NOW has ok CAGR potential
Given its -40% drawdown, $NOW appears to be fairly valued today at $135💵
Yes, $NOW is the workflow operating system for large enterprises, automating & governing critical work across IT, HR, security, & customer service
Once embedded, it becomes deeply integrated into how the organization runs, creating high switching costs & powerful long-term expansion
With AI layered onto these workflows, $NOW can increasingly automate & execute work end-to-end
Yet, today’s price offers little margin of safety
I consider $NOW a strong consideration with a decent margin of safety at $110💵, where I can reasonably expect ~13% CAGR while assuming a more conservative 28x
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️
𝐓𝐡𝐢𝐬 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞, 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫, 𝐨𝐫 𝐚 𝐬𝐨𝐥𝐢𝐜𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐨 𝐛𝐮𝐲 𝐨𝐫 𝐬𝐞𝐥𝐥 𝐚𝐧𝐲 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲.
𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐨𝐥𝐝 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝. 𝐀𝐧𝐲 𝐨𝐩𝐢𝐧𝐢𝐨𝐧𝐬 𝐞𝐱𝐩𝐫𝐞𝐬𝐬𝐞𝐝 𝐚𝐫𝐞 𝐚𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐚𝐭𝐞 𝐨𝐟 𝐩𝐮𝐛𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐧𝐨𝐭𝐢𝐜𝐞.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐝𝐨𝐞�[...]
A quality valuation analysis on $NOW 🧘🏽♂️
•NTM P/E Ratio: 52.28x
•3-Year Mean: 34.73x
•NTM FCF Yield: 3.61%
•10-Year Mean: 2.49%
As you can see, $NOW appears to be trading below fair value
Going forward, investors can expect to receive ~50% MORE in earnings per share & ~45% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $NOW is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $5.41B
•Long-Term Debt: $1.49B
$NOW has a strong balance sheet, an A S&P Credit Rating & 210x FFO Interest Coverage Ratio
RETURN ON CAPITAL❌➡️✅
•2021: 4.3%
•2022: 5.2%
•2023: 8.1%
•2024: 11.8%
•LTM: 13.3%
RETURN ON EQUITY❌➡️✅
•2021: 7.0%
•2022: 7.4%
•2023: 27.3%
•2024: 16.5%
•LTM: 16.8%
$NOW return metrics are improving & trending in the right direction — a sign the business is becoming more efficient
REVENUE✅
•2020: $4.52B
•2025E: $13.24B
•CAGR: 23.97%
FREE CASH FLOW✅
•2020: $1.37B
•2025E: 26.79%
NORMALIZED EPS✅
•2020: $0.93
•2025E: $3.48
•CAGR: 30.20%
SHARE BUYBACKS❌
•2019 Shares Outstanding: 986.12M
•LTM Shares Outstanding: 1.05B
MARGINS🆗 / ✅
•LTM Gross Margins: 78.1%
•LTM Operating Margins: 14.4%
•LTM Net Income Margins: 13.7%
SGA is $NOW largest expense eating ~41% of LTM revenue, something to keep an eye on
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~50% MORE in EPS & ~45% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $NOW has to grow earnings at a 17.37% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2026 - 2028 EPS growth over the next few years to be slightly less (16.84%) than the (17.37%) required growth rate:
2025E: $3.48 (25% YoY) *FY Dec
2026E: $4.08 (17% YoY)
2027E: $4.89 (20% YoY)
2028E: $5.57 (14% YoY)
$NOW has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $NOW ends 2028 with $5.57 in EPS & see its CAGR potential assuming different multiples
34x P/E: $189💵 … ~12.2% CAGR
33x P/E: $184💵 … ~11.1% CAGR
32x P/E: $178💵 … ~9.9% CAGR
31x P/E: $173💵 … ~8.8% CAGR
30x P/E: $167💵 … ~7.6% CAGR
29x P/E: $161💵 … ~6.4% CAGR
As you can see, we’d have to assume a >34x multiple for $NOW to have attractive return potential
At 32x earnings $NOW has ok CAGR potential
Given its -40% drawdown, $NOW appears to be fairly valued today at $135💵
Yes, $NOW is the workflow operating system for large enterprises, automating & governing critical work across IT, HR, security, & customer service
Once embedded, it becomes deeply integrated into how the organization runs, creating high switching costs & powerful long-term expansion
With AI layered onto these workflows, $NOW can increasingly automate & execute work end-to-end
Yet, today’s price offers little margin of safety
I consider $NOW a strong consideration with a decent margin of safety at $110💵, where I can reasonably expect ~13% CAGR while assuming a more conservative 28x
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𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️
𝐓𝐡𝐢𝐬 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞, 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫, 𝐨𝐫 𝐚 𝐬𝐨𝐥𝐢𝐜𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐨 𝐛𝐮𝐲 𝐨𝐫 𝐬𝐞𝐥𝐥 𝐚𝐧𝐲 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲.
𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐨𝐥𝐝 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝. 𝐀𝐧𝐲 𝐨𝐩𝐢𝐧𝐢𝐨𝐧𝐬 𝐞𝐱𝐩𝐫𝐞𝐬𝐬𝐞𝐝 𝐚𝐫𝐞 𝐚𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐚𝐭𝐞 𝐨𝐟 𝐩𝐮𝐛𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐧𝐨𝐭𝐢𝐜𝐞.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐝𝐨𝐞�[...]