Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
RT @QualityInvest5: MASSIVE kudos to Dimitry for calling out $MEDP which is now up double since last year
This is not an irregular occurrence for his callouts
One of the best pages to follow on FinTwit if you already havenโt ๐๐ https://t.co/xsAQePjSvN
tweet
RT @QualityInvest5: MASSIVE kudos to Dimitry for calling out $MEDP which is now up double since last year
This is not an irregular occurrence for his callouts
One of the best pages to follow on FinTwit if you already havenโt ๐๐ https://t.co/xsAQePjSvN
TWO days ago I suggested $MEDP becomes an interesting consideration at $330๐ต (~9.5% below that dayโs price)
Yesterday shares of $MEDP fell ~10%, reaching my target โ
As I stated in the most recent analysis:
โAs you can see, $MEDP appears to have attractive return potential if we assume >30x earnings, a valuation that may not be justified by its growth rate & one thatโs subject to multiple compression if the growth rate slows (which is expected for 2025-2026 vs 2018-2023)
Today at $365.70๐ต $MEDP appears to be a โholdโ
Iโd consider $MEDP closer to $330๐ต(~26.70x NTM EPS), or roughly 9.5% below todayโs share priceโ
_______
Stay tuned for todayโs updated valuation analysis on $MEDP ๐
#stocks #investing tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: A quality valuation analysis on $AMZN ๐ง๐ฝโโ๏ธ
โขNTM P/OCF Ratio: 14.13x
โข5-Year Mean: 22.10x
โขNTM FCF Yield: 1.10%
โข5-Year Mean: 2.60%
As you can see, $AMZN appears to be slightly undervalued using P/OCF
Going forward, investors can expect to receive ~56% MORE in operating cash flow & ~57% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $AMZN is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $93.18B
โขLong-Term Debt: $57.92B
$AMZN has an excellent balance sheet, an AA S&P Credit Rating & 54x FFO Interest Coverage Ratio
RETURN ON CAPITAL๐ / โ
โข2020: 11.6%
โข2021: 8.9%
โข2022: 4.2%
โข2023: 10.1%
โข2024: 15.5%
โขLTM: 15.4%
RETURN ON EQUITYโ
โข2020: 27.4%
โข2021: 28.8%
โข2022: (1.9%)
โข2023: 17.5%
โข2024: 24.3%
โขLTM: 24.8%
$AMZN has good return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $280.52B
โข2024: $637.96B
โขCAGR: 17.85%
FREE CASH FLOW๐(โ )
โข2019: $21.65B
โข2024: $32.88B
โขCAGR: 8.71%
NORMALIZED EPSโ
โข2019: $1.15
โข2024: $5.53
โขCAGR: 36.90%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 10.08B
โขLTM Shares Outstanding: 10.78B
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 49.6%
โขLTM Operating Margins: 11.4%
โขLTM Net Income Margins: 10.5%
*Important for $AMZN to continue expanding margins & increase profitability
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~56% MORE in OCF & ~57% LESS in FCF per share
Weโre using P/OCF instead of P/E as historical data reveals a stronger correlation between AMZN's share price and Operating Cash Flow (OCF)
Today, analysts anticipate aggressive OCF (per share) growth between 2025 - 2027:
2025E: $13.11 (21% YoY) *FY Dec
2026E: $16.21 (24% YoY)
2027E: $19.90 (23% YoY)
$AMZN has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $AMZN ends 2027 with $19.90 in OCF per share & see its CAGR potential assuming different multiples (photos attached below also include these CAGR estimates):
17x P/OCF: $338.24๐ต โฆ ~21% CAGR
16x P/OCF: $318.34๐ต โฆ ~18% CAGR
15x P/OCF: $298.45๐ต โฆ ~14% CAGR
14x P/OCF: $278.55๐ต โฆ ~11% CAGR
As you can see, $AMZN appears to have strong double-digit CAGR potential if we assume ~15x P/OCF, a multiple thatโs justified given its growth rate & below its historical average
AWS & Amazon Ads will continue to drive growth & profitability. In $AMZN LTM:
โ๏ธAWS revenue: $116.38B
๐Ads revenue: $61.23B
Combined, these segments generated $177.61B net revenue โฆ with ~37% Operating Income Margin
Today at $219๐ต $AMZN appears to be a good consideration for investment
#stocks #investing
Data: TIKR
Graphs: FAST Graphs
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
tweet
RT @DimitryNakhla: A quality valuation analysis on $AMZN ๐ง๐ฝโโ๏ธ
โขNTM P/OCF Ratio: 14.13x
โข5-Year Mean: 22.10x
โขNTM FCF Yield: 1.10%
โข5-Year Mean: 2.60%
As you can see, $AMZN appears to be slightly undervalued using P/OCF
Going forward, investors can expect to receive ~56% MORE in operating cash flow & ~57% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $AMZN is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $93.18B
โขLong-Term Debt: $57.92B
$AMZN has an excellent balance sheet, an AA S&P Credit Rating & 54x FFO Interest Coverage Ratio
RETURN ON CAPITAL๐ / โ
โข2020: 11.6%
โข2021: 8.9%
โข2022: 4.2%
โข2023: 10.1%
โข2024: 15.5%
โขLTM: 15.4%
RETURN ON EQUITYโ
โข2020: 27.4%
โข2021: 28.8%
โข2022: (1.9%)
โข2023: 17.5%
โข2024: 24.3%
โขLTM: 24.8%
$AMZN has good return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $280.52B
โข2024: $637.96B
โขCAGR: 17.85%
FREE CASH FLOW๐(โ )
โข2019: $21.65B
โข2024: $32.88B
โขCAGR: 8.71%
NORMALIZED EPSโ
โข2019: $1.15
โข2024: $5.53
โขCAGR: 36.90%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 10.08B
โขLTM Shares Outstanding: 10.78B
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 49.6%
โขLTM Operating Margins: 11.4%
โขLTM Net Income Margins: 10.5%
*Important for $AMZN to continue expanding margins & increase profitability
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~56% MORE in OCF & ~57% LESS in FCF per share
Weโre using P/OCF instead of P/E as historical data reveals a stronger correlation between AMZN's share price and Operating Cash Flow (OCF)
Today, analysts anticipate aggressive OCF (per share) growth between 2025 - 2027:
2025E: $13.11 (21% YoY) *FY Dec
2026E: $16.21 (24% YoY)
2027E: $19.90 (23% YoY)
$AMZN has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $AMZN ends 2027 with $19.90 in OCF per share & see its CAGR potential assuming different multiples (photos attached below also include these CAGR estimates):
17x P/OCF: $338.24๐ต โฆ ~21% CAGR
16x P/OCF: $318.34๐ต โฆ ~18% CAGR
15x P/OCF: $298.45๐ต โฆ ~14% CAGR
14x P/OCF: $278.55๐ต โฆ ~11% CAGR
As you can see, $AMZN appears to have strong double-digit CAGR potential if we assume ~15x P/OCF, a multiple thatโs justified given its growth rate & below its historical average
AWS & Amazon Ads will continue to drive growth & profitability. In $AMZN LTM:
โ๏ธAWS revenue: $116.38B
๐Ads revenue: $61.23B
Combined, these segments generated $177.61B net revenue โฆ with ~37% Operating Income Margin
Today at $219๐ต $AMZN appears to be a good consideration for investment
#stocks #investing
Data: TIKR
Graphs: FAST Graphs
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: Bill Ackman with a new position in $AMZN
$AMZN compelling valuation, even at ~$200, offers a strong margin of safety, making it a great investment opportunity ๐ฆ
A quality valuation analysis on $AMZN ๐ง๐ฝโโ๏ธ
โขNTM P/OCF Ratio: 13.55x
โข5-Year Mean: 22.10x
โขNTM FCF Yield: 2.60%
โข5-Year Mean: 2.69%
As you can see, $AMZN appears to be slightly undervalued using P/OCF
Going forward, investors can expect to receive ~63% MORE in operating cash flow & ~3% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $AMZN is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $101.20B
โขLong-Term Debt: $59.72B
$AMZN has an excellent balance sheet, an AA S&P Credit Rating & 48x FFO Interest Coverage Ratio
RETURN ON CAPITAL๐ / โ
โข2020: 11.6%
โข2021: 8.9%
โข2022: 4.2%
โข2023: 10.1%
โข2024: 15.5%
RETURN ON EQUITYโ
โข2020: 27.4%
โข2021: 28.8%
โข2022: (1.9%)
โข2023: 17.5%
โข2024: 24.3%
$AMZN has solid return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $280.52B
โข2024: $637.96B
โขCAGR: 17.85%
FREE CASH FLOWโ
โข2019: $21.65B
โข2024: $38.22B
โขCAGR: 12.03%
NORMALIZED EPSโ
โข2019: $1.15
โข2024: $5.53
โขCAGR: 36.90%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 10.08B
โขLTM Shares Outstanding: 10.72B
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 48.9%
โขLTM Operating Margins: 10.8%
โขLTM Net Income Margins: 9.3%
*Important for $AMZN to continue expanding margins & increase profitability
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~63% MORE in OCF & ~3% LESS in FCF per share
Weโre using P/OCF instead of P/E. Historical data reveals a stronger correlation between AMZN's share price and Operating Cash Flow (OCF)
Today, analysts anticipate aggressive OCF (per share) growth between 2025 - 2027:
2025E: $13.65 (26% YoY) *FY Dec
2026E: $16.77 (23% YoY)
2027E: $19.75 (18% YoY)
$AMZN has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $AMZN ends 2027 with $19.75 in OCF per share & see its CAGR potential assuming different multiples (photos attached below also include these CAGR estimates):
16x P/OCF: $315.898๐ต โฆ ~21.7% CAGR
15x P/OCF: $296.23๐ต โฆ ~18.9% CAGR
14x P/OCF: $276.48๐ต โฆ ~15.9% CAGR
13x P/OCF: $256.73๐ต โฆ ~12.8% CAGR
12x P/OCF: $236.98๐ต โฆ ~9.6% CAGR
As you can see, $AMZN appears to have great double-digit CAGR potential if we assume ~13x P/OCF, a multiple less than what itโs trading for today (a multiple it hasnโt traded for since 2008/2009) & a multiple thatโs justified given its growth rate
Also by assuming a substantial amount of multiple compression, we leave ourselves with some margin of safety
Also check out $AMZN FCF growth estimates ๐
2025E: $50.92B (33% YoY)
2026E: $74.87B (47% YoY)
2027E: $106.84B (42% YoY)
AWS & Amazon Ads will continue to drive growth & profitability. In $AMZN FY 2024:
โ๏ธAWS revenue: $107.55B
๐Ads revenue: $56.21B
Combined, these segments generated $163.76B net revenue โฆ with ~37% Operating Income Margin
Today at $185๐ต $AMZN appears to be a strong consideration for investment
#stocks #investing
Data: TIKR
Graphs: FAST Graphs
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข[...]
RT @DimitryNakhla: Bill Ackman with a new position in $AMZN
$AMZN compelling valuation, even at ~$200, offers a strong margin of safety, making it a great investment opportunity ๐ฆ
A quality valuation analysis on $AMZN ๐ง๐ฝโโ๏ธ
โขNTM P/OCF Ratio: 13.55x
โข5-Year Mean: 22.10x
โขNTM FCF Yield: 2.60%
โข5-Year Mean: 2.69%
As you can see, $AMZN appears to be slightly undervalued using P/OCF
Going forward, investors can expect to receive ~63% MORE in operating cash flow & ~3% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $AMZN is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $101.20B
โขLong-Term Debt: $59.72B
$AMZN has an excellent balance sheet, an AA S&P Credit Rating & 48x FFO Interest Coverage Ratio
RETURN ON CAPITAL๐ / โ
โข2020: 11.6%
โข2021: 8.9%
โข2022: 4.2%
โข2023: 10.1%
โข2024: 15.5%
RETURN ON EQUITYโ
โข2020: 27.4%
โข2021: 28.8%
โข2022: (1.9%)
โข2023: 17.5%
โข2024: 24.3%
$AMZN has solid return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $280.52B
โข2024: $637.96B
โขCAGR: 17.85%
FREE CASH FLOWโ
โข2019: $21.65B
โข2024: $38.22B
โขCAGR: 12.03%
NORMALIZED EPSโ
โข2019: $1.15
โข2024: $5.53
โขCAGR: 36.90%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 10.08B
โขLTM Shares Outstanding: 10.72B
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 48.9%
โขLTM Operating Margins: 10.8%
โขLTM Net Income Margins: 9.3%
*Important for $AMZN to continue expanding margins & increase profitability
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~63% MORE in OCF & ~3% LESS in FCF per share
Weโre using P/OCF instead of P/E. Historical data reveals a stronger correlation between AMZN's share price and Operating Cash Flow (OCF)
Today, analysts anticipate aggressive OCF (per share) growth between 2025 - 2027:
2025E: $13.65 (26% YoY) *FY Dec
2026E: $16.77 (23% YoY)
2027E: $19.75 (18% YoY)
$AMZN has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $AMZN ends 2027 with $19.75 in OCF per share & see its CAGR potential assuming different multiples (photos attached below also include these CAGR estimates):
16x P/OCF: $315.898๐ต โฆ ~21.7% CAGR
15x P/OCF: $296.23๐ต โฆ ~18.9% CAGR
14x P/OCF: $276.48๐ต โฆ ~15.9% CAGR
13x P/OCF: $256.73๐ต โฆ ~12.8% CAGR
12x P/OCF: $236.98๐ต โฆ ~9.6% CAGR
As you can see, $AMZN appears to have great double-digit CAGR potential if we assume ~13x P/OCF, a multiple less than what itโs trading for today (a multiple it hasnโt traded for since 2008/2009) & a multiple thatโs justified given its growth rate
Also by assuming a substantial amount of multiple compression, we leave ourselves with some margin of safety
Also check out $AMZN FCF growth estimates ๐
2025E: $50.92B (33% YoY)
2026E: $74.87B (47% YoY)
2027E: $106.84B (42% YoY)
AWS & Amazon Ads will continue to drive growth & profitability. In $AMZN FY 2024:
โ๏ธAWS revenue: $107.55B
๐Ads revenue: $56.21B
Combined, these segments generated $163.76B net revenue โฆ with ~37% Operating Income Margin
Today at $185๐ต $AMZN appears to be a strong consideration for investment
#stocks #investing
Data: TIKR
Graphs: FAST Graphs
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข[...]
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
A quality valuation analysis on $ICE ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 20.98x
โข5-Year Mean: 22.29x
โขNTM FCF Yield: 5.06%
โข5-Year Mean: 4.85%
As you can see, $ICE appears to be trading slightly near fair value
Going forward, investors can expect to receive ~6% MORE in EPS & ~4% MORE in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $ICE is a quality business
BALANCE SHEET๐
โขCash & Equivalents: $850M
โขLong-Term Debt: $17.36B
$ICE has an OK balance sheet, an A- S&P Credit Rating & 6.03x FFO Interest Coverage
RETURN ON CAPITAL๐
โข2020: 7.8%
โข2021: 8.6%
โข2022: 8.3%
โข2023: 7.5%
โข2024: 8.5%
โขLTM: 9.3%
RETURN ON EQUITY๐
โข2020: 11.4%
โข2021: 19.2%
โข2022: 6.6%
โข2023: 10.0%
โข2024: 10.5%
โขLTM: 11.5%
$ICE has decent return metrics as the company relies heavily on acquisitions
REVENUESโ
โข2015: $3.34B
โข2025E: $9.89B
โขCAGR: 11.46%
FREE CASH FLOWโ
โข2015: $1.12B
โข2025E: $3.97B
โขCAGR: 13.49%
NORMALIZED EPSโ
โข2015: $2.43
โข2025E: $6.90
โขCAGR: 11.00%
SHARE BUYBACKSโ
โข2015 Shares Outstanding: 559.00M
โขLTM Shares Outstanding: 576.00M
MARGINSโ
โขLTM Gross Margins: 100.0%
โขLTM Operating Margins: 49.6%
โขLTM Gross Margins: 32.4%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~6% MORE in EPS & ~4% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $ICE has to grow earnings at a 10.49% 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 more than the (10.49%) required growth rate:
2025E: $6.90 (14% YoY) *FY Dec
2026E: $7.50 (9% YoY)
2027E: $8.36 (11% YoY)
2028E: $9.45 (13% YoY)
$ICE has a great track record of meeting analyst estimates ~2 years out, but letโs assume $ICE ends 2028 with $9.45 in EPS & see its CAGR potential assuming different multiples
25x P/E: $236.25๐ต โฆ ~15.9% CAGR
24x P/E: $226.80๐ต โฆ ~14.4% CAGR
23x P/E: $217.35๐ต โฆ ~12.9% CAGR
22x P/E: $207.90๐ต โฆ ~11.3% CAGR
21x P/E: $198.45๐ต โฆ ~9.8% CAGR
As you can see, we have to assume ~22x earnings for $ICE to have double-digit CAGR potential
At 24x - 25x, $ICE can CAGR near the mid-teens
$ICE is a high-quality business with a wide-moat & generates ~65% of total revenue from their exchanges revenue โ the other ~35% from fixed income & data services revenue & mortgage technology
Though $ICE has traded for an average ~22x multiple over the past 5 years, I believe itโs justified for it to trade for 24x - 26x given its predictability & moat, among other things
$ICE is also still founder led โ Jeff Sprecher (Founder & CEO) continues to be a brilliant leader with strategic foresight & a strong track record of executing complex integrations
Today at $153๐ต $ICE appears to be a good consideration for investment with a decent margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ. tweet
A quality valuation analysis on $ICE ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 20.98x
โข5-Year Mean: 22.29x
โขNTM FCF Yield: 5.06%
โข5-Year Mean: 4.85%
As you can see, $ICE appears to be trading slightly near fair value
Going forward, investors can expect to receive ~6% MORE in EPS & ~4% MORE in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $ICE is a quality business
BALANCE SHEET๐
โขCash & Equivalents: $850M
โขLong-Term Debt: $17.36B
$ICE has an OK balance sheet, an A- S&P Credit Rating & 6.03x FFO Interest Coverage
RETURN ON CAPITAL๐
โข2020: 7.8%
โข2021: 8.6%
โข2022: 8.3%
โข2023: 7.5%
โข2024: 8.5%
โขLTM: 9.3%
RETURN ON EQUITY๐
โข2020: 11.4%
โข2021: 19.2%
โข2022: 6.6%
โข2023: 10.0%
โข2024: 10.5%
โขLTM: 11.5%
$ICE has decent return metrics as the company relies heavily on acquisitions
REVENUESโ
โข2015: $3.34B
โข2025E: $9.89B
โขCAGR: 11.46%
FREE CASH FLOWโ
โข2015: $1.12B
โข2025E: $3.97B
โขCAGR: 13.49%
NORMALIZED EPSโ
โข2015: $2.43
โข2025E: $6.90
โขCAGR: 11.00%
SHARE BUYBACKSโ
โข2015 Shares Outstanding: 559.00M
โขLTM Shares Outstanding: 576.00M
MARGINSโ
โขLTM Gross Margins: 100.0%
โขLTM Operating Margins: 49.6%
โขLTM Gross Margins: 32.4%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~6% MORE in EPS & ~4% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $ICE has to grow earnings at a 10.49% 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 more than the (10.49%) required growth rate:
2025E: $6.90 (14% YoY) *FY Dec
2026E: $7.50 (9% YoY)
2027E: $8.36 (11% YoY)
2028E: $9.45 (13% YoY)
$ICE has a great track record of meeting analyst estimates ~2 years out, but letโs assume $ICE ends 2028 with $9.45 in EPS & see its CAGR potential assuming different multiples
25x P/E: $236.25๐ต โฆ ~15.9% CAGR
24x P/E: $226.80๐ต โฆ ~14.4% CAGR
23x P/E: $217.35๐ต โฆ ~12.9% CAGR
22x P/E: $207.90๐ต โฆ ~11.3% CAGR
21x P/E: $198.45๐ต โฆ ~9.8% CAGR
As you can see, we have to assume ~22x earnings for $ICE to have double-digit CAGR potential
At 24x - 25x, $ICE can CAGR near the mid-teens
$ICE is a high-quality business with a wide-moat & generates ~65% of total revenue from their exchanges revenue โ the other ~35% from fixed income & data services revenue & mortgage technology
Though $ICE has traded for an average ~22x multiple over the past 5 years, I believe itโs justified for it to trade for 24x - 26x given its predictability & moat, among other things
$ICE is also still founder led โ Jeff Sprecher (Founder & CEO) continues to be a brilliant leader with strategic foresight & a strong track record of executing complex integrations
Today at $153๐ต $ICE appears to be a good consideration for investment with a decent margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ. tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: A quality valuation analysis on $ICE ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 20.98x
โข5-Year Mean: 22.29x
โขNTM FCF Yield: 5.06%
โข5-Year Mean: 4.85%
As you can see, $ICE appears to be trading slightly near fair value
Going forward, investors can expect to receive ~6% MORE in EPS & ~4% MORE in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $ICE is a quality business
BALANCE SHEET๐
โขCash & Equivalents: $850M
โขLong-Term Debt: $17.36B
$ICE has an OK balance sheet, an A- S&P Credit Rating & 6.03x FFO Interest Coverage
RETURN ON CAPITAL๐
โข2020: 7.8%
โข2021: 8.6%
โข2022: 8.3%
โข2023: 7.5%
โข2024: 8.5%
โขLTM: 9.3%
RETURN ON EQUITY๐
โข2020: 11.4%
โข2021: 19.2%
โข2022: 6.6%
โข2023: 10.0%
โข2024: 10.5%
โขLTM: 11.5%
$ICE has decent return metrics as the company relies heavily on acquisitions
REVENUESโ
โข2015: $3.34B
โข2025E: $9.89B
โขCAGR: 11.46%
FREE CASH FLOWโ
โข2015: $1.12B
โข2025E: $3.97B
โขCAGR: 13.49%
NORMALIZED EPSโ
โข2015: $2.43
โข2025E: $6.90
โขCAGR: 11.00%
SHARE BUYBACKSโ
โข2015 Shares Outstanding: 559.00M
โขLTM Shares Outstanding: 576.00M
MARGINSโ
โขLTM Gross Margins: 100.0%
โขLTM Operating Margins: 49.6%
โขLTM Gross Margins: 32.4%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~6% MORE in EPS & ~4% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $ICE has to grow earnings at a 10.49% 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 more than the (10.49%) required growth rate:
2025E: $6.90 (14% YoY) *FY Dec
2026E: $7.50 (9% YoY)
2027E: $8.36 (11% YoY)
2028E: $9.45 (13% YoY)
$ICE has a great track record of meeting analyst estimates ~2 years out, but letโs assume $ICE ends 2028 with $9.45 in EPS & see its CAGR potential assuming different multiples
25x P/E: $236.25๐ต โฆ ~15.9% CAGR
24x P/E: $226.80๐ต โฆ ~14.4% CAGR
23x P/E: $217.35๐ต โฆ ~12.9% CAGR
22x P/E: $207.90๐ต โฆ ~11.3% CAGR
21x P/E: $198.45๐ต โฆ ~9.8% CAGR
As you can see, we have to assume ~22x earnings for $ICE to have double-digit CAGR potential
At 24x - 25x, $ICE can CAGR near the mid-teens
$ICE is a high-quality business with a wide-moat & generates ~65% of total revenue from their exchanges revenue โ the other ~35% from fixed income & data services revenue & mortgage technology
Though $ICE has traded for an average ~22x multiple over the past 5 years, I believe itโs justified for it to trade for 24x - 26x given its predictability & moat, among other things
$ICE is also still founder led โ Jeff Sprecher (Founder & CEO) continues to be a brilliant leader with strategic foresight & a strong track record of executing complex integrations
Today at $153๐ต $ICE appears to be a good consideration for investment with a decent margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ. tweet
RT @DimitryNakhla: A quality valuation analysis on $ICE ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 20.98x
โข5-Year Mean: 22.29x
โขNTM FCF Yield: 5.06%
โข5-Year Mean: 4.85%
As you can see, $ICE appears to be trading slightly near fair value
Going forward, investors can expect to receive ~6% MORE in EPS & ~4% MORE in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $ICE is a quality business
BALANCE SHEET๐
โขCash & Equivalents: $850M
โขLong-Term Debt: $17.36B
$ICE has an OK balance sheet, an A- S&P Credit Rating & 6.03x FFO Interest Coverage
RETURN ON CAPITAL๐
โข2020: 7.8%
โข2021: 8.6%
โข2022: 8.3%
โข2023: 7.5%
โข2024: 8.5%
โขLTM: 9.3%
RETURN ON EQUITY๐
โข2020: 11.4%
โข2021: 19.2%
โข2022: 6.6%
โข2023: 10.0%
โข2024: 10.5%
โขLTM: 11.5%
$ICE has decent return metrics as the company relies heavily on acquisitions
REVENUESโ
โข2015: $3.34B
โข2025E: $9.89B
โขCAGR: 11.46%
FREE CASH FLOWโ
โข2015: $1.12B
โข2025E: $3.97B
โขCAGR: 13.49%
NORMALIZED EPSโ
โข2015: $2.43
โข2025E: $6.90
โขCAGR: 11.00%
SHARE BUYBACKSโ
โข2015 Shares Outstanding: 559.00M
โขLTM Shares Outstanding: 576.00M
MARGINSโ
โขLTM Gross Margins: 100.0%
โขLTM Operating Margins: 49.6%
โขLTM Gross Margins: 32.4%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~6% MORE in EPS & ~4% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $ICE has to grow earnings at a 10.49% 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 more than the (10.49%) required growth rate:
2025E: $6.90 (14% YoY) *FY Dec
2026E: $7.50 (9% YoY)
2027E: $8.36 (11% YoY)
2028E: $9.45 (13% YoY)
$ICE has a great track record of meeting analyst estimates ~2 years out, but letโs assume $ICE ends 2028 with $9.45 in EPS & see its CAGR potential assuming different multiples
25x P/E: $236.25๐ต โฆ ~15.9% CAGR
24x P/E: $226.80๐ต โฆ ~14.4% CAGR
23x P/E: $217.35๐ต โฆ ~12.9% CAGR
22x P/E: $207.90๐ต โฆ ~11.3% CAGR
21x P/E: $198.45๐ต โฆ ~9.8% CAGR
As you can see, we have to assume ~22x earnings for $ICE to have double-digit CAGR potential
At 24x - 25x, $ICE can CAGR near the mid-teens
$ICE is a high-quality business with a wide-moat & generates ~65% of total revenue from their exchanges revenue โ the other ~35% from fixed income & data services revenue & mortgage technology
Though $ICE has traded for an average ~22x multiple over the past 5 years, I believe itโs justified for it to trade for 24x - 26x given its predictability & moat, among other things
$ICE is also still founder led โ Jeff Sprecher (Founder & CEO) continues to be a brilliant leader with strategic foresight & a strong track record of executing complex integrations
Today at $153๐ต $ICE appears to be a good consideration for investment with a decent margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ. tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
A quality valuation analysis on $AMZN ๐ง๐ฝโโ๏ธ
โขNTM P/OCF Ratio: 13.09x
โข5-Year Mean: 22.10x
โขNTM FCF Yield: 1.37%
โข5-Year Mean: 2.57%
As you can see, $AMZN appears to be slightly undervalued using P/OCF
Going forward, investors can expect to receive ~68% MORE in operating cash flow & ~47% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $AMZN is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $94.19B
โขLong-Term Debt: $57.94B
$AMZN has an excellent balance sheet, an AA S&P Credit Rating & 60x FFO Interest Coverage Ratio
RETURN ON CAPITAL๐ / โ
โข2020: 11.6%
โข2021: 8.9%
โข2022: 4.2%
โข2023: 10.1%
โข2024: 15.5%
โขLTM: 14.8%
RETURN ON EQUITYโ
โข2020: 27.4%
โข2021: 28.8%
โข2022: (1.9%)
โข2023: 17.5%
โข2024: 24.3%
โขLTM: 24.3%
$AMZN has good return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2020: $386.06B
โข2025E: $714.47B
โขCAGR: 13.10%
FREE CASH FLOW๐*
โข2020: $31.02B
โข2025E: $21.17B
โขCAGR: (7%)
*$76.15B 2027 FCF estimate (elevated near-term CapEx temporarily suppressing FCF, setting the stage for a strong rebound)
NORMALIZED EPSโ
โข2020: $2.09
โข2025E: $7.07
โขCAGR: 27.60%
SHARE BUYBACKSโ
โข2020 Shares Outstanding: 10.20B
โขLTM Shares Outstanding: 10.80B
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 50.0%
โขLTM Operating Margins: 11.4%
โขLTM Net Income Margins: 11.1%
*Important for $AMZN to continue expanding margins & increase profitability
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~68% MORE in OCF & ~47% LESS in FCF per share
Weโre using P/OCF instead of P/E as historical data reveals a stronger correlation between AMZN's share price and Operating Cash Flow (OCF)
Today, analysts anticipate aggressive OCF (per share) growth between 2025 - 2027:
2025E: $13.01 (20% YoY) *FY Dec
2026E: $17.03 (31% YoY)
2027E: $20.90 (23% YoY)
$AMZN has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $AMZN ends 2027 with $20.90 in OCF per share & see its CAGR potential assuming different multiples (photos attached below also include these CAGR estimates):
17x P/OCF: $355๐ต โฆ ~24% CAGR
16x P/OCF: $334๐ต โฆ ~21% CAGR
15x P/OCF: $313๐ต โฆ ~17% CAGR
14x P/OCF: $292๐ต โฆ ~14% CAGR
As you can see, $AMZN appears to have strong double-digit CAGR potential if we assume ~15x P/OCF, a multiple thatโs justified given its growth rate & below its historical average
Keep in mind ~15x P/OCF has historically marked the floor and lower boundary for $AMZN
AWS & Amazon Ads will continue to drive growth & profitability. In $AMZN LTM:
โ๏ธAWS revenue: $121.93B
๐Ads revenue: $64.61B
Combined, these segments generated $186.54 net revenue โฆ with ~37% Operating Income Margin
Today at $227๐ต $AMZN appears to be a good consideration for investment
#stocks #investing
Data: TIKR
Graphs: FAST Graphs
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ. tweet
A quality valuation analysis on $AMZN ๐ง๐ฝโโ๏ธ
โขNTM P/OCF Ratio: 13.09x
โข5-Year Mean: 22.10x
โขNTM FCF Yield: 1.37%
โข5-Year Mean: 2.57%
As you can see, $AMZN appears to be slightly undervalued using P/OCF
Going forward, investors can expect to receive ~68% MORE in operating cash flow & ~47% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $AMZN is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $94.19B
โขLong-Term Debt: $57.94B
$AMZN has an excellent balance sheet, an AA S&P Credit Rating & 60x FFO Interest Coverage Ratio
RETURN ON CAPITAL๐ / โ
โข2020: 11.6%
โข2021: 8.9%
โข2022: 4.2%
โข2023: 10.1%
โข2024: 15.5%
โขLTM: 14.8%
RETURN ON EQUITYโ
โข2020: 27.4%
โข2021: 28.8%
โข2022: (1.9%)
โข2023: 17.5%
โข2024: 24.3%
โขLTM: 24.3%
$AMZN has good return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2020: $386.06B
โข2025E: $714.47B
โขCAGR: 13.10%
FREE CASH FLOW๐*
โข2020: $31.02B
โข2025E: $21.17B
โขCAGR: (7%)
*$76.15B 2027 FCF estimate (elevated near-term CapEx temporarily suppressing FCF, setting the stage for a strong rebound)
NORMALIZED EPSโ
โข2020: $2.09
โข2025E: $7.07
โขCAGR: 27.60%
SHARE BUYBACKSโ
โข2020 Shares Outstanding: 10.20B
โขLTM Shares Outstanding: 10.80B
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 50.0%
โขLTM Operating Margins: 11.4%
โขLTM Net Income Margins: 11.1%
*Important for $AMZN to continue expanding margins & increase profitability
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~68% MORE in OCF & ~47% LESS in FCF per share
Weโre using P/OCF instead of P/E as historical data reveals a stronger correlation between AMZN's share price and Operating Cash Flow (OCF)
Today, analysts anticipate aggressive OCF (per share) growth between 2025 - 2027:
2025E: $13.01 (20% YoY) *FY Dec
2026E: $17.03 (31% YoY)
2027E: $20.90 (23% YoY)
$AMZN has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $AMZN ends 2027 with $20.90 in OCF per share & see its CAGR potential assuming different multiples (photos attached below also include these CAGR estimates):
17x P/OCF: $355๐ต โฆ ~24% CAGR
16x P/OCF: $334๐ต โฆ ~21% CAGR
15x P/OCF: $313๐ต โฆ ~17% CAGR
14x P/OCF: $292๐ต โฆ ~14% CAGR
As you can see, $AMZN appears to have strong double-digit CAGR potential if we assume ~15x P/OCF, a multiple thatโs justified given its growth rate & below its historical average
Keep in mind ~15x P/OCF has historically marked the floor and lower boundary for $AMZN
AWS & Amazon Ads will continue to drive growth & profitability. In $AMZN LTM:
โ๏ธAWS revenue: $121.93B
๐Ads revenue: $64.61B
Combined, these segments generated $186.54 net revenue โฆ with ~37% Operating Income Margin
Today at $227๐ต $AMZN appears to be a good consideration for investment
#stocks #investing
Data: TIKR
Graphs: FAST Graphs
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ. tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
A quality valuation analysis on $META ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 19.89x
โข3-Year Mean: 22.75x
โขNTM FCF Yield: 1.50%
โข3-Year Mean: 3.20%
As you can see, $META appears to be trading below fair value on an earnings multiple
Going forward, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $META is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $44.45B
โขLong-Term Debt: $28.34B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 112x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2021: 33.7%
โข2022: 22.0%
โข2023: 25.7%
โข2024: 29.4%
โขLTM: 32.9%
RETURN ON EQUITYโ
โข2021: 31.1%
โข2022: 18.5%
โข2023: 28.0%
โข2024: 37.1%
โขLTM: 32.6%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2020: $85.97B
โข2025E: $199.46B
โขCAGR: 18.33%
FREE CASH FLOWโ *
โข2020: $23.58B
โข2025E: $41.47B
โขCAGR: 11.95%
โข2028E: $74B*
NORMALIZED EPSโ
โข2020: $10.09
โข2025E: $25.99
โขCAGR: 20.83%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 2.88B
โขLTM Shares Outstanding: 2.59B
By reducing its shares outstanding ~10%, $META increased its EPS by ~11% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 82.0%
โขLTM Operating Margins: 42.6%
โขLTM Net Income Margins: 30.9%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $META has to grow earnings at a 9.95% 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 than the (9.95%) required growth rate:
2025E: $25.99 (9% YoY) *FY Dec
2026E: $30.31 (17% YoY)
2027E: $33.55 (11% YoY)
2028E: $35.02 (4% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $META ends 2028 with $35.02 in EPS & see its CAGR potential assuming different multiples
24x P/E: $840๐ต โฆ ~12.2% CAGR
23x P/E: $805๐ต โฆ ~10.6% CAGR
22x P/E: $770๐ต โฆ ~9.1% CAGR
21x P/E: $735๐ต โฆ ~7.5% CAGR
20x P/E: $700๐ต โฆ ~5.8% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple near its 3-year mean and a multiple thatโs potentially justified given its growth rate, balance sheet, visionary leadership & AI-related investments
As Iโve mentioned before: โโฆ the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish oneโ โ (which can lead to a sustainable re-rating over the next few years)
Today at $594๐ต $META appears to be slightly undervalued, those buying today have a small margin of safety and will not need to rely on margin expansion
I consider $META a great buy ~$535๐ต, offering ~11% CAGR assuming a conservative 21x 2028 EPS est
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ[...]
A quality valuation analysis on $META ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 19.89x
โข3-Year Mean: 22.75x
โขNTM FCF Yield: 1.50%
โข3-Year Mean: 3.20%
As you can see, $META appears to be trading below fair value on an earnings multiple
Going forward, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $META is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $44.45B
โขLong-Term Debt: $28.34B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 112x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2021: 33.7%
โข2022: 22.0%
โข2023: 25.7%
โข2024: 29.4%
โขLTM: 32.9%
RETURN ON EQUITYโ
โข2021: 31.1%
โข2022: 18.5%
โข2023: 28.0%
โข2024: 37.1%
โขLTM: 32.6%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2020: $85.97B
โข2025E: $199.46B
โขCAGR: 18.33%
FREE CASH FLOWโ *
โข2020: $23.58B
โข2025E: $41.47B
โขCAGR: 11.95%
โข2028E: $74B*
NORMALIZED EPSโ
โข2020: $10.09
โข2025E: $25.99
โขCAGR: 20.83%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 2.88B
โขLTM Shares Outstanding: 2.59B
By reducing its shares outstanding ~10%, $META increased its EPS by ~11% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 82.0%
โขLTM Operating Margins: 42.6%
โขLTM Net Income Margins: 30.9%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $META has to grow earnings at a 9.95% 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 than the (9.95%) required growth rate:
2025E: $25.99 (9% YoY) *FY Dec
2026E: $30.31 (17% YoY)
2027E: $33.55 (11% YoY)
2028E: $35.02 (4% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $META ends 2028 with $35.02 in EPS & see its CAGR potential assuming different multiples
24x P/E: $840๐ต โฆ ~12.2% CAGR
23x P/E: $805๐ต โฆ ~10.6% CAGR
22x P/E: $770๐ต โฆ ~9.1% CAGR
21x P/E: $735๐ต โฆ ~7.5% CAGR
20x P/E: $700๐ต โฆ ~5.8% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple near its 3-year mean and a multiple thatโs potentially justified given its growth rate, balance sheet, visionary leadership & AI-related investments
As Iโve mentioned before: โโฆ the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish oneโ โ (which can lead to a sustainable re-rating over the next few years)
Today at $594๐ต $META appears to be slightly undervalued, those buying today have a small margin of safety and will not need to rely on margin expansion
I consider $META a great buy ~$535๐ต, offering ~11% CAGR assuming a conservative 21x 2028 EPS est
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ[...]
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: A quality valuation analysis on $META ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 19.89x
โข3-Year Mean: 22.75x
โขNTM FCF Yield: 1.50%
โข3-Year Mean: 3.20%
As you can see, $META appears to be trading below fair value on an earnings multiple
Going forward, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $META is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $44.45B
โขLong-Term Debt: $28.34B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 112x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2021: 33.7%
โข2022: 22.0%
โข2023: 25.7%
โข2024: 29.4%
โขLTM: 32.9%
RETURN ON EQUITYโ
โข2021: 31.1%
โข2022: 18.5%
โข2023: 28.0%
โข2024: 37.1%
โขLTM: 32.6%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2020: $85.97B
โข2025E: $199.46B
โขCAGR: 18.33%
FREE CASH FLOWโ *
โข2020: $23.58B
โข2025E: $41.47B
โขCAGR: 11.95%
โข2028E: $74B*
NORMALIZED EPSโ
โข2020: $10.09
โข2025E: $25.99
โขCAGR: 20.83%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 2.88B
โขLTM Shares Outstanding: 2.59B
By reducing its shares outstanding ~10%, $META increased its EPS by ~11% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 82.0%
โขLTM Operating Margins: 42.6%
โขLTM Net Income Margins: 30.9%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $META has to grow earnings at a 9.95% 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 than the (9.95%) required growth rate:
2025E: $25.99 (9% YoY) *FY Dec
2026E: $30.31 (17% YoY)
2027E: $33.55 (11% YoY)
2028E: $35.02 (4% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $META ends 2028 with $35.02 in EPS & see its CAGR potential assuming different multiples
24x P/E: $840๐ต โฆ ~12.2% CAGR
23x P/E: $805๐ต โฆ ~10.6% CAGR
22x P/E: $770๐ต โฆ ~9.1% CAGR
21x P/E: $735๐ต โฆ ~7.5% CAGR
20x P/E: $700๐ต โฆ ~5.8% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple near its 3-year mean and a multiple thatโs potentially justified given its growth rate, balance sheet, visionary leadership & AI-related investments
As Iโve mentioned before: โโฆ the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish oneโ โ (which can lead to a sustainable re-rating over the next few years)
Today at $594๐ต $META appears to be slightly undervalued, those buying today have a small margin of safety and will not need to rely on margin expansion
I consider $META a great buy ~$535๐ต, offering ~11% CAGR assuming a conservative 21x 2028 EPS est
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ[...]
RT @DimitryNakhla: A quality valuation analysis on $META ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 19.89x
โข3-Year Mean: 22.75x
โขNTM FCF Yield: 1.50%
โข3-Year Mean: 3.20%
As you can see, $META appears to be trading below fair value on an earnings multiple
Going forward, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $META is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $44.45B
โขLong-Term Debt: $28.34B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 112x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2021: 33.7%
โข2022: 22.0%
โข2023: 25.7%
โข2024: 29.4%
โขLTM: 32.9%
RETURN ON EQUITYโ
โข2021: 31.1%
โข2022: 18.5%
โข2023: 28.0%
โข2024: 37.1%
โขLTM: 32.6%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2020: $85.97B
โข2025E: $199.46B
โขCAGR: 18.33%
FREE CASH FLOWโ *
โข2020: $23.58B
โข2025E: $41.47B
โขCAGR: 11.95%
โข2028E: $74B*
NORMALIZED EPSโ
โข2020: $10.09
โข2025E: $25.99
โขCAGR: 20.83%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 2.88B
โขLTM Shares Outstanding: 2.59B
By reducing its shares outstanding ~10%, $META increased its EPS by ~11% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 82.0%
โขLTM Operating Margins: 42.6%
โขLTM Net Income Margins: 30.9%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $META has to grow earnings at a 9.95% 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 than the (9.95%) required growth rate:
2025E: $25.99 (9% YoY) *FY Dec
2026E: $30.31 (17% YoY)
2027E: $33.55 (11% YoY)
2028E: $35.02 (4% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $META ends 2028 with $35.02 in EPS & see its CAGR potential assuming different multiples
24x P/E: $840๐ต โฆ ~12.2% CAGR
23x P/E: $805๐ต โฆ ~10.6% CAGR
22x P/E: $770๐ต โฆ ~9.1% CAGR
21x P/E: $735๐ต โฆ ~7.5% CAGR
20x P/E: $700๐ต โฆ ~5.8% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple near its 3-year mean and a multiple thatโs potentially justified given its growth rate, balance sheet, visionary leadership & AI-related investments
As Iโve mentioned before: โโฆ the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish oneโ โ (which can lead to a sustainable re-rating over the next few years)
Today at $594๐ต $META appears to be slightly undervalued, those buying today have a small margin of safety and will not need to rely on margin expansion
I consider $META a great buy ~$535๐ต, offering ~11% CAGR assuming a conservative 21x 2028 EPS est
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ[...]
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: A quality valuation analysis on $META ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 19.89x
โข3-Year Mean: 22.75x
โขNTM FCF Yield: 1.50%
โข3-Year Mean: 3.20%
As you can see, $META appears to be trading below fair value on an earnings multiple
Going forward, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $META is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $44.45B
โขLong-Term Debt: $28.34B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 112x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2021: 33.7%
โข2022: 22.0%
โข2023: 25.7%
โข2024: 29.4%
โขLTM: 32.9%
RETURN ON EQUITYโ
โข2021: 31.1%
โข2022: 18.5%
โข2023: 28.0%
โข2024: 37.1%
โขLTM: 32.6%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2020: $85.97B
โข2025E: $199.46B
โขCAGR: 18.33%
FREE CASH FLOWโ *
โข2020: $23.58B
โข2025E: $41.47B
โขCAGR: 11.95%
โข2028E: $74B*
NORMALIZED EPSโ
โข2020: $10.09
โข2025E: $25.99
โขCAGR: 20.83%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 2.88B
โขLTM Shares Outstanding: 2.59B
By reducing its shares outstanding ~10%, $META increased its EPS by ~11% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 82.0%
โขLTM Operating Margins: 42.6%
โขLTM Net Income Margins: 30.9%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $META has to grow earnings at a 9.95% 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 than the (9.95%) required growth rate:
2025E: $25.99 (9% YoY) *FY Dec
2026E: $30.31 (17% YoY)
2027E: $33.55 (11% YoY)
2028E: $35.02 (4% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $META ends 2028 with $35.02 in EPS & see its CAGR potential assuming different multiples
24x P/E: $840๐ต โฆ ~12.2% CAGR
23x P/E: $805๐ต โฆ ~10.6% CAGR
22x P/E: $770๐ต โฆ ~9.1% CAGR
21x P/E: $735๐ต โฆ ~7.5% CAGR
20x P/E: $700๐ต โฆ ~5.8% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple near its 3-year mean and a multiple thatโs potentially justified given its growth rate, balance sheet, visionary leadership & AI-related investments
As Iโve mentioned before: โโฆ the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish oneโ โ (which can lead to a sustainable re-rating over the next few years)
Today at $594๐ต $META appears to be slightly undervalued, those buying today have a small margin of safety and will not need to rely on margin expansion
I consider $META a great buy ~$535๐ต, offering ~11% CAGR assuming a conservative 21x 2028 EPS est
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ[...]
RT @DimitryNakhla: A quality valuation analysis on $META ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 19.89x
โข3-Year Mean: 22.75x
โขNTM FCF Yield: 1.50%
โข3-Year Mean: 3.20%
As you can see, $META appears to be trading below fair value on an earnings multiple
Going forward, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $META is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $44.45B
โขLong-Term Debt: $28.34B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 112x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2021: 33.7%
โข2022: 22.0%
โข2023: 25.7%
โข2024: 29.4%
โขLTM: 32.9%
RETURN ON EQUITYโ
โข2021: 31.1%
โข2022: 18.5%
โข2023: 28.0%
โข2024: 37.1%
โขLTM: 32.6%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2020: $85.97B
โข2025E: $199.46B
โขCAGR: 18.33%
FREE CASH FLOWโ *
โข2020: $23.58B
โข2025E: $41.47B
โขCAGR: 11.95%
โข2028E: $74B*
NORMALIZED EPSโ
โข2020: $10.09
โข2025E: $25.99
โขCAGR: 20.83%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 2.88B
โขLTM Shares Outstanding: 2.59B
By reducing its shares outstanding ~10%, $META increased its EPS by ~11% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 82.0%
โขLTM Operating Margins: 42.6%
โขLTM Net Income Margins: 30.9%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $META has to grow earnings at a 9.95% 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 than the (9.95%) required growth rate:
2025E: $25.99 (9% YoY) *FY Dec
2026E: $30.31 (17% YoY)
2027E: $33.55 (11% YoY)
2028E: $35.02 (4% YoY)
$META has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $META ends 2028 with $35.02 in EPS & see its CAGR potential assuming different multiples
24x P/E: $840๐ต โฆ ~12.2% CAGR
23x P/E: $805๐ต โฆ ~10.6% CAGR
22x P/E: $770๐ต โฆ ~9.1% CAGR
21x P/E: $735๐ต โฆ ~7.5% CAGR
20x P/E: $700๐ต โฆ ~5.8% CAGR
As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple near its 3-year mean and a multiple thatโs potentially justified given its growth rate, balance sheet, visionary leadership & AI-related investments
As Iโve mentioned before: โโฆ the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish oneโ โ (which can lead to a sustainable re-rating over the next few years)
Today at $594๐ต $META appears to be slightly undervalued, those buying today have a small margin of safety and will not need to rely on margin expansion
I consider $META a great buy ~$535๐ต, offering ~11% CAGR assuming a conservative 21x 2028 EPS est
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ[...]
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
Less than 9 months ago, $ASML traded for ~26x NTM earnings & $687๐ต โ itโs always amazing how quickly sentiment can change.
A quality valuation analysis on $ASML ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 26.34x
โข10-Year Mean: 31.08x
โขNTM FCF Yield: 3.39%
โข10-Year Mean: 3.09%
As you can see, $ASML appears to be trading below fair value
Going forward, investors can receive ~18% MORE in earnings per share & ~10% MORE in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $ASML is an excellent business (*Financials in USD*)
BALANCE SHEETโ
โขCash & Short Term Inv: $9.85B
โขLong-Term Debt: $3.98B
$ASML has a strong balance sheet & 70x FFO Interest Coverage
RETURN ON CAPITALโ
โข2021: 43.8%
โข2022: 48.0%
โข2023: 48.7%
โข2024: 38.3%
โขLTM: 48.2%
RETURN ON EQUITYโ
โข2021: 49.0%
โข2022: 59.4%
โข2023: 70.4%
โข2024: 47.4%
โขLTM: 55.6%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $7.09B
โข2024: $29.28B
โขCAGR: 15.23%
FREE CASH FLOW*
โข $ASML FCF is very sporadic due to heavy capital expenditures & isnโt necessarily the most reliable way to analyze the companyโs value
NORMALIZED EPSโ
โข2014: $3.15
โข2024: $20.03
โขCAGR: 20.31%
SHARE BUYBACKSโ
โข2018 Shares Outstanding: 426.40M
โขLTM Shares Outstanding: 393.30M
By reducing its shares outstanding ~7.7%, $ASML increased its EPS by ~8.3% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 52.0%
โขLTM Operating Margins: 33.8%
โขLTM Net Income Margins: 28.3%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~18% MORE in EPS & 10% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $ASML has to grow earnings at a 13.17% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (13.17%) required growth rate:
2025E: $26.60 (21.6% YoY) *FY Dec
2026E: $30.75 (15.6% YoY)
2027E: $37.29 (20.7% YoY)
$ASML has a decent track record of meeting analyst estimates ~2 years out. HOWEVER, letโs be conservative & assume $ASML ends 2027 with $35.00*** in EPS (~6% below current estimates) & see its CAGR potential assuming different multiples:
29x P/E: $1,015๐ต โฆ ~17.0% CAGR
28x P/E: $980๐ต โฆ ~15.4% CAGR
27x P/E: $945๐ต โฆ ~13.9% CAGR
26x P/E: $910๐ต โฆ ~12.3% CAGR
25x P/E: $875๐ต โฆ ~10.7% CAGR
As you can see, $ASML appears to have attractive return potential EVEN if we assume greater or equal to 25x EPS (below its 10-year mean, current multiple, & justified given its quality, moat & growth rate)
Today at $687๐ต $ASML appears to be a strong consideration for investment, albeit with extreme volatility
Additionally, we have some margin of safety by relying on a lower multiple & lower growth rate
As Iโve stated before, given its volatility, however, itโs wise to piece into $ASML โ this way, you enhance your margin of safety while also positioning yourself to โwin-winโ if the stock moves up or down in the short-term ๐ต
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐[...]
Less than 9 months ago, $ASML traded for ~26x NTM earnings & $687๐ต โ itโs always amazing how quickly sentiment can change.
A quality valuation analysis on $ASML ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 26.34x
โข10-Year Mean: 31.08x
โขNTM FCF Yield: 3.39%
โข10-Year Mean: 3.09%
As you can see, $ASML appears to be trading below fair value
Going forward, investors can receive ~18% MORE in earnings per share & ~10% MORE in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $ASML is an excellent business (*Financials in USD*)
BALANCE SHEETโ
โขCash & Short Term Inv: $9.85B
โขLong-Term Debt: $3.98B
$ASML has a strong balance sheet & 70x FFO Interest Coverage
RETURN ON CAPITALโ
โข2021: 43.8%
โข2022: 48.0%
โข2023: 48.7%
โข2024: 38.3%
โขLTM: 48.2%
RETURN ON EQUITYโ
โข2021: 49.0%
โข2022: 59.4%
โข2023: 70.4%
โข2024: 47.4%
โขLTM: 55.6%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $7.09B
โข2024: $29.28B
โขCAGR: 15.23%
FREE CASH FLOW*
โข $ASML FCF is very sporadic due to heavy capital expenditures & isnโt necessarily the most reliable way to analyze the companyโs value
NORMALIZED EPSโ
โข2014: $3.15
โข2024: $20.03
โขCAGR: 20.31%
SHARE BUYBACKSโ
โข2018 Shares Outstanding: 426.40M
โขLTM Shares Outstanding: 393.30M
By reducing its shares outstanding ~7.7%, $ASML increased its EPS by ~8.3% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 52.0%
โขLTM Operating Margins: 33.8%
โขLTM Net Income Margins: 28.3%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~18% MORE in EPS & 10% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $ASML has to grow earnings at a 13.17% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (13.17%) required growth rate:
2025E: $26.60 (21.6% YoY) *FY Dec
2026E: $30.75 (15.6% YoY)
2027E: $37.29 (20.7% YoY)
$ASML has a decent track record of meeting analyst estimates ~2 years out. HOWEVER, letโs be conservative & assume $ASML ends 2027 with $35.00*** in EPS (~6% below current estimates) & see its CAGR potential assuming different multiples:
29x P/E: $1,015๐ต โฆ ~17.0% CAGR
28x P/E: $980๐ต โฆ ~15.4% CAGR
27x P/E: $945๐ต โฆ ~13.9% CAGR
26x P/E: $910๐ต โฆ ~12.3% CAGR
25x P/E: $875๐ต โฆ ~10.7% CAGR
As you can see, $ASML appears to have attractive return potential EVEN if we assume greater or equal to 25x EPS (below its 10-year mean, current multiple, & justified given its quality, moat & growth rate)
Today at $687๐ต $ASML appears to be a strong consideration for investment, albeit with extreme volatility
Additionally, we have some margin of safety by relying on a lower multiple & lower growth rate
As Iโve stated before, given its volatility, however, itโs wise to piece into $ASML โ this way, you enhance your margin of safety while also positioning yourself to โwin-winโ if the stock moves up or down in the short-term ๐ต
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐[...]