AkhenOsiris
Does downgrading sw due to valuation make sense in front of a rate cutting regime? Even for a bloated CRWD
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AkhenOsiris
RT @kouroshshafi: $SHOP Shopify pay and buy with prime (update )
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AkhenOsiris
To 0 he said!

SunPower shares plunged 42% Friday after Guggenheim Securities cut the solar equipment firm’s price target to zero and said the stock may soon be delisted. trib.al/26Ipxm2 - Bloomberg
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AkhenOsiris
$AMZN and e-commerce

MS lays out their AI opportunities within e-commerce. The expense side excites me more since optimization/cost reduction can really improve profitability in a meaningful way & higher terminal margins should lead to multiple rerating - Elliot
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AkhenOsiris
"Buy-the-hack" is a popular strategy, "buy-the-bad software update" even harder
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AkhenOsiris
RT @MuppetTrading: Imagine being sell-sider wanting to publish $CRWD defend note but cannot hit send because the systems aren't working.
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⁠Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: 10 Quality Stocks 2018-2023 EPS CAGR | >10% EPS Growth (Estimates) In 2025 & 2026 | LTM ROIC 💵

🎨 Sherwin-Williams $SHW
•EPS CAGR: 10.86%
•2025E: $12.72 (11.5% YoY)
•2026E: $14.26 (12.1% YoY)
•ROIC: 21.6%

💳 Visa $V
•EPS CAGR: 13.72%
•2025E: $11.19 (12.4% YoY)
•2026E: $12.66 (13.1% YoY)
•ROIC: 34.7%

🧬 Thermo Fisher $TMO
•EPS CAGR: 14.14%
•2025E: $24.34 (12.1% YoY)
•2026E: $27.16 (11.6% YoY)
•ROIC: 8.9%

🔬 Danaher $DHR
•EPS CAGR: 10.89%
•2025E: $8.75 (14.8% YoY)
•2026E: $9.70 (10.9% YoY)
•ROIC: 7.2%

🏊🏻‍♀️ Pool Corp $POOL
•EPS CAGR: 18.58%
•2025E: $14.40 (10.3% YoY)
•2026E: $15.90 (10.4% YoY)
•ROIC: 26.2%

🚛 Old Dominion Freight $ODFL
•EPS CAGR: 18.00%
•2025E: $7.14 (18.7% YoY)
•2026E: $7.88 (10.5% YoY)
•ROIC: 33.9%

💵 PayPal $PYPL
•EPS CAGR: 16.07%
•2025E: $4.56 (10.6% YoY)
•2026E: $5.02 (10.0% YoY)
•ROIC: 15.7%

💸 Mastercard $MA
•EPS CAGR: 13.56%
•2025E: $16.59 (16.3% YoY)
•2026E: $19.36 (16.7% YoY)
•ROIC: 64.1%

🖱️ Alphabet $GOOG $GOOGL
•EPS CAGR: 21.50%
•2025E: $8.55 (13.6% YoY)
•2026E: $9.77 (14.2% YoY)
•ROIC: 30.2%

🐶 Zoetis $ZTS
•EPS CAGR: 11.19%
•2025E: $6.38 (10.6% YoY)
•2026E: $7.02 (10.0% YoY)
•ROIC: 26.2%

#stocks #investing
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⁠Dimitry Nakhla | Babylon Capital®
A sober valuation analysis on $META 🧘🏽‍♂️

•NTM P/E Ratio: 23.17x
•10-Year Mean: 26.61x

•NTM FCF Yield: 3.77%
•10-Year Mean: 3.30%

As you can see, $META appears to be slightly undervalued

Going forward, investors can expect to receive ~14% MORE in earnings per share & ~14% MORE in FCF per share🧠***

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

BALANCE SHEET✅
•Cash & Equivalents: $58.12B
•Long-Term Debt: $18.39B

$META has an excellent balance sheet, an AA- S&P Credit Rating & 147x FFO Interest Coverage Ratio

RETURN ON CAPITAL✅
•2019: 26.0%
•2020: 23.5%
•2021: 33.7%
•2022: 22.0%
•2023: 26.3%
•LTM: 30.1%

RETURN ON EQUITY✅
•2019: 20.0%
•2020: 25.4%
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%
•LTM: 33.4%

$META has great return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2018: $55.84B
•2023: $134.90B
•CAGR: 19.29%

FREE CASH FLOW✅
•2018: $15.36B
•2023: $43.85B
•CAGR: 23.34%

NORMALIZED EPS✅
•2018: $7.57
•2023: $14.87
•CAGR: 14.45%

SHARE BUYBACKS✅
•2018 Shares Outstanding: 2.92B
•LTM Shares Outstanding: 2.64B

By reducing its shares outstanding ~9.5%, $META increased its EPS by ~10.5% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 81.5%
•LTM Operating Margins: 39.5%
•LTM Net Income Margins: 32.1%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~14% MORE in EPS & ~14% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at an 11.60% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (11.60%) required growth rate:

2024E: $20.14 (35.4% YoY)
2025E: $23.05 (14.5% YoY)
2026E: $26.32 (14.2% YoY)

$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2026 with $26.32 in EPS & see its CAGR potential assuming different multiples

24x P/E: $631.68💵 … ~12.5% CAGR

23x P/E: $605.36💵 … ~10.5% CAGR

22x P/E: $579.04💵 … ~8.5% CAGR

As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple slightly below what it’s trading for today and a multiple below what may be justified given its mid-teens earnings growth rate

I also believe that Mark Zuckerberg will continue to execute exceptionally well

Additionally, the increased investment in future growth and necessary AI development has the potential to drive better growth prospects, which could serve as a bullish catalyst for the next several years

Today at $476💵 $META appears to be a good consideration for investment

$META appears to be an excellent deal closer to $450💵 where it has ~11% CAGR potential assuming 2026E and a 22x multiple (an added layer of margin of safety)

#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.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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⁠Dimitry Nakhla | Babylon Capital®
A sober valuation analysis on $ASML 🧘🏽‍♂️

•NTM P/E Ratio: 32.97x
•10-Year Mean: 31.08x

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

Going forward, investors can receive ~5% LESS in earnings per share 🧠***

Before we get into valuation, let’s take a look at why $ASML is an excellent business (*Financials in USD*)

BALANCE SHEET✅
•Cash & Short Term Inv: $5.38B
•Long-Term Debt: $4.94B

$ASML has a strong balance sheet & 32x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 17.5%
•2020: 21.6%
•2021: 43.8%
•2022: 48.0%
•2023: 48.7%
•LTM: 39.7%

RETURN ON EQUITY✅
•2019: 21.4%
•2020: 26.9%
•2021: 49.0%
•2022: 59.4%
•2023: 70.4%
•LTM: 48.6%

$ASML has excellent return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $7.22B
•2023: $30.42B
•CAGR: 15.46%

FREE CASH FLOW*
•Similar to $TSM, $ASML FCF is very sporadic due to heavy capital expenditures & isn’t necessarily the most reliable way to analyze the company’s value

NORMALIZED EPS✅
•2013: $3.17
•2023: $21.65
•CAGR: 21.18%

SHARE BUYBACKS✅
•2018 Shares Outstanding: 0.43B
•LTM Shares Outstanding: 0.39B

By reducing its shares outstanding ~9.3%, $ASML increased its EPS by ~10.2% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 51.4%
•LTM Operating Margins: 30.7%
•LTM Net Income Margins: 26.5%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~5% LESS in EPS

Using Benjamin Graham’s 2G rule of thumb, $ASML has to grow earnings at a 16.48% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be slightly more than the (16.49%) required growth rate:

2024E: $20.53 (-5.1% YoY) *FY Dec
2025E: $32.43 (58.0% YoY)
2026E: $37.57 (15.9% YoY)

$ASML has a decent track record of meeting analyst estimates ~2 years out, but let’s assume $ASML ends 2026 with $37.57 in EPS & see its CAGR potential assuming different multiples

32x P/E: $1202.24💵 … ~13.2% CAGR

31x P/E: $1164.67💵 … ~11.8% CAGR

30x P/E: $1127.10💵 … ~10.4% CAGR

29x P/E: $1089.53💵 … ~8.9% CAGR

As you can see, $ASML appears to have attractive return potential if we assume greater or equal to 30x earnings (slightly below the 10-year mean & justified given its quality & growth rate)

However we should be aware that, while $ASML is a wide-moat business, we’ll be relying on fairly aggressive growth estimates in 2025 & these kinds of estimates should always be taken with caution

Today at $895💵 $ASML appears to be a good consideration for investment, although without much of a margin of safety

Therefore, it’s wise to piece into the position (especially as semiconductor related stocks are volatile), e.g. 1/3 at $895💵, 1/3 at $800💵, & 1/3 at $700💵

This way, you ensure some margin of safety while also positioning yourself to “win-win” if the stock moves up or down in the short-term 💵

#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.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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