Offshore
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โ Dimitry Nakhla | Babylon Capitalยฎ
A sober valuation analysis on $META ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 23.17x
โข10-Year Mean: 26.61x
โขNTM FCF Yield: 3.77%
โข10-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 share๐ง ***
Before we get into valuation, letโs take a look at why $META is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $58.12B
โขLong-Term Debt: $18.39B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 147x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2019: 26.0%
โข2020: 23.5%
โข2021: 33.7%
โข2022: 22.0%
โข2023: 26.3%
โขLTM: 30.1%
RETURN ON EQUITYโ
โข2019: 20.0%
โข2020: 25.4%
โข2021: 31.1%
โข2022: 18.5%
โข2023: 28.0%
โขLTM: 33.4%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2018: $55.84B
โข2023: $134.90B
โขCAGR: 19.29%
FREE CASH FLOWโ
โข2018: $15.36B
โข2023: $43.85B
โขCAGR: 23.34%
NORMALIZED EPSโ
โข2018: $7.57
โข2023: $14.87
โขCAGR: 14.45%
SHARE BUYBACKSโ
โข2018 Shares Outstanding: 2.92B
โขLTM Shares Outstanding: 2.64B
By reducing its shares outstanding ~9.5%, $META increased its EPS by ~10.5% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 81.5%
โขLTM Operating Margins: 39.5%
โขLTM Net Income Margins: 32.1%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~14% MORE in EPS & ~14% MORE in FCF per share
Using Benjamin Grahamโs 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 letโs assume $META ends 2026 with $26.32 in EPS & see its CAGR potential assuming different multiples
24x P/E: $631.68๐ต โฆ ~12.5% CAGR
23x P/E: $605.36๐ต โฆ ~10.5% CAGR
22x P/E: $579.04๐ต โฆ ~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 itโs 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 $476๐ต $META appears to be a good consideration for investment
$META appears to be an excellent deal closer to $450๐ต where it has ~11% CAGR potential assuming 2026E and a 22x multiple (an added layer of margin of safety)
#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, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
tweet
A sober valuation analysis on $META ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 23.17x
โข10-Year Mean: 26.61x
โขNTM FCF Yield: 3.77%
โข10-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 share๐ง ***
Before we get into valuation, letโs take a look at why $META is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $58.12B
โขLong-Term Debt: $18.39B
$META has an excellent balance sheet, an AA- S&P Credit Rating & 147x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2019: 26.0%
โข2020: 23.5%
โข2021: 33.7%
โข2022: 22.0%
โข2023: 26.3%
โขLTM: 30.1%
RETURN ON EQUITYโ
โข2019: 20.0%
โข2020: 25.4%
โข2021: 31.1%
โข2022: 18.5%
โข2023: 28.0%
โขLTM: 33.4%
$META has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2018: $55.84B
โข2023: $134.90B
โขCAGR: 19.29%
FREE CASH FLOWโ
โข2018: $15.36B
โข2023: $43.85B
โขCAGR: 23.34%
NORMALIZED EPSโ
โข2018: $7.57
โข2023: $14.87
โขCAGR: 14.45%
SHARE BUYBACKSโ
โข2018 Shares Outstanding: 2.92B
โขLTM Shares Outstanding: 2.64B
By reducing its shares outstanding ~9.5%, $META increased its EPS by ~10.5% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 81.5%
โขLTM Operating Margins: 39.5%
โขLTM Net Income Margins: 32.1%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~14% MORE in EPS & ~14% MORE in FCF per share
Using Benjamin Grahamโs 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 letโs assume $META ends 2026 with $26.32 in EPS & see its CAGR potential assuming different multiples
24x P/E: $631.68๐ต โฆ ~12.5% CAGR
23x P/E: $605.36๐ต โฆ ~10.5% CAGR
22x P/E: $579.04๐ต โฆ ~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 itโs 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 $476๐ต $META appears to be a good consideration for investment
$META appears to be an excellent deal closer to $450๐ต where it has ~11% CAGR potential assuming 2026E and a 22x multiple (an added layer of margin of safety)
#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, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
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Offshore
Photo
โ Dimitry Nakhla | Babylon Capitalยฎ
A sober valuation analysis on $ASML ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 32.97x
โข10-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 ๐ง ***
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: $5.38B
โขLong-Term Debt: $4.94B
$ASML has a strong balance sheet & 32x FFO Interest Coverage
RETURN ON CAPITALโ
โข2019: 17.5%
โข2020: 21.6%
โข2021: 43.8%
โข2022: 48.0%
โข2023: 48.7%
โขLTM: 39.7%
RETURN ON EQUITYโ
โข2019: 21.4%
โข2020: 26.9%
โข2021: 49.0%
โข2022: 59.4%
โข2023: 70.4%
โขLTM: 48.6%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2013: $7.22B
โข2023: $30.42B
โขCAGR: 15.46%
FREE CASH FLOW*
โขSimilar to $TSM, $ASML FCF is very sporadic due to heavy capital expenditures & isnโt necessarily the most reliable way to analyze the companyโs value
NORMALIZED EPSโ
โข2013: $3.17
โข2023: $21.65
โขCAGR: 21.18%
SHARE BUYBACKSโ
โข2018 Shares Outstanding: 0.43B
โขLTM Shares Outstanding: 0.39B
By reducing its shares outstanding ~9.3%, $ASML increased its EPS by ~10.2% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 51.4%
โขLTM Operating Margins: 30.7%
โขLTM Net Income Margins: 26.5%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~5% LESS in EPS
Using Benjamin Grahamโs 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 letโs assume $ASML ends 2026 with $37.57 in EPS & see its CAGR potential assuming different multiples
32x P/E: $1202.24๐ต โฆ ~13.2% CAGR
31x P/E: $1164.67๐ต โฆ ~11.8% CAGR
30x P/E: $1127.10๐ต โฆ ~10.4% CAGR
29x P/E: $1089.53๐ต โฆ ~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, weโll be relying on fairly aggressive growth estimates in 2025 & these kinds of estimates should always be taken with caution
Today at $895๐ต $ASML appears to be a good consideration for investment, although without much of a margin of safety
Therefore, itโs wise to piece into the position (especially as semiconductor related stocks are volatile), e.g. 1/3 at $895๐ต, 1/3 at $800๐ต, & 1/3 at $700๐ต
This way, you ensure some margin of safety while also positioning yourself to โwin-winโ if the stock moves up or down in the short-term ๐ต
#stocks #investing
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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
A sober valuation analysis on $ASML ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 32.97x
โข10-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 ๐ง ***
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: $5.38B
โขLong-Term Debt: $4.94B
$ASML has a strong balance sheet & 32x FFO Interest Coverage
RETURN ON CAPITALโ
โข2019: 17.5%
โข2020: 21.6%
โข2021: 43.8%
โข2022: 48.0%
โข2023: 48.7%
โขLTM: 39.7%
RETURN ON EQUITYโ
โข2019: 21.4%
โข2020: 26.9%
โข2021: 49.0%
โข2022: 59.4%
โข2023: 70.4%
โขLTM: 48.6%
$ASML has excellent return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2013: $7.22B
โข2023: $30.42B
โขCAGR: 15.46%
FREE CASH FLOW*
โขSimilar to $TSM, $ASML FCF is very sporadic due to heavy capital expenditures & isnโt necessarily the most reliable way to analyze the companyโs value
NORMALIZED EPSโ
โข2013: $3.17
โข2023: $21.65
โขCAGR: 21.18%
SHARE BUYBACKSโ
โข2018 Shares Outstanding: 0.43B
โขLTM Shares Outstanding: 0.39B
By reducing its shares outstanding ~9.3%, $ASML increased its EPS by ~10.2% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 51.4%
โขLTM Operating Margins: 30.7%
โขLTM Net Income Margins: 26.5%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~5% LESS in EPS
Using Benjamin Grahamโs 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 letโs assume $ASML ends 2026 with $37.57 in EPS & see its CAGR potential assuming different multiples
32x P/E: $1202.24๐ต โฆ ~13.2% CAGR
31x P/E: $1164.67๐ต โฆ ~11.8% CAGR
30x P/E: $1127.10๐ต โฆ ~10.4% CAGR
29x P/E: $1089.53๐ต โฆ ~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, weโll be relying on fairly aggressive growth estimates in 2025 & these kinds of estimates should always be taken with caution
Today at $895๐ต $ASML appears to be a good consideration for investment, although without much of a margin of safety
Therefore, itโs wise to piece into the position (especially as semiconductor related stocks are volatile), e.g. 1/3 at $895๐ต, 1/3 at $800๐ต, & 1/3 at $700๐ต
This way, you ensure some 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, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
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โ Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: A sober valuation analysis on $V ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 26.35x
โข10-Year Mean: 28.08x
โขNTM FCF Yield: 3.97%
โข10-Year Mean: 3.82%
As you can see, $V appears to be trading below fair value
Going forward, investors can receive ~6% MORE in earnings per share & ~4% MORE in FCF per share ๐ง ***
Before we get into valuation, letโs take a look at why $V is a quality business
BALANCE SHEETโ
โขCash & Short-Term Inv: $20.13B
โขLong-Term Debt: $20.78B
$V has a great balance sheet, an AA- S&P Credit Rating, & 32x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2019: 27.5%
โข2020: 21.4%
โข2021: 24.2%
โข2022: 30.7%
โข2023: 33.7%
RETURN ON EQUITYโ
โข2019: 35.2%
โข2020: 30.7%
โข2021: 33.4%
โข2022: 40.9%
โข2023: 46.5%
$V has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2013: $11.78B
โข2023: $32.65B
โขCAGR: 10.73%
FREE CASH FLOWโ
โข2013: $2.55B
โข2023: $19.70B
โขCAGR: 22.68%
NORMALIZED EPSโ
โข2013: $1.90
โข2023: $8.77
โขCAGR: 16.52%
SHARE BUYBACKSโ
โข2013 Shares Outstanding: 2.62B
โขLTM Shares Outstanding: 2.02B
By reducing its shares outstanding 23%, $V increased its EPS by 30% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 97.8%
โขLTM Operating Margins: 67.3%
โขLTM Net Income Margins: 53.0%
***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, $V has to grow earnings at a 13.18% 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 less than the (13.18%) required growth rate:
2024E: $9.96 (13.6% YoY) *FY Sep
2025E: $11.19 (12.4% YoY)
2026E: $12.66 (13.1% YoY)
$V has an excellent track record of meeting analyst estimates ~2 years out, so letโs assume $V ends 2026 with $12.66 in EPS & see its CAGR potential assuming different multiples
29x P/E: $367.14๐ต โฆ ~14.6% CAGR
28x P/E: $354.48๐ต โฆ ~12.9% CAGR
27x P/E: $341.82๐ต โฆ ~11.2% CAGR
26x P/E: $329.16๐ต โฆ ~9.3% CAGR
As you can see, $V appears to have attractive return potential if we assume >27x earnings, a multiple near its 10-year mean & more importantly โ a multiple justified by its growth rate AND quality โ even assuming a 36x multiple, $V is still fairly attractive
I consider $V one of the best businesses in the world & as Warren Buffett says:
โItโs far better to buy a wonderful company at a fair price than a fair company at a wonderful priceโ
$V is even trading at a valuation slightly better than just a fair price
Today at $272.50๐ต $V appears to be a worthwhile consideration for investment
If I were adding shares of $V today, Iโd also leave some extra capital to accumulate even more shares closer to 24x (if it gets there) โ roughly 9% below todayโs price or at ~$248๐ต
#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, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
tweet
RT @DimitryNakhla: A sober valuation analysis on $V ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 26.35x
โข10-Year Mean: 28.08x
โขNTM FCF Yield: 3.97%
โข10-Year Mean: 3.82%
As you can see, $V appears to be trading below fair value
Going forward, investors can receive ~6% MORE in earnings per share & ~4% MORE in FCF per share ๐ง ***
Before we get into valuation, letโs take a look at why $V is a quality business
BALANCE SHEETโ
โขCash & Short-Term Inv: $20.13B
โขLong-Term Debt: $20.78B
$V has a great balance sheet, an AA- S&P Credit Rating, & 32x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2019: 27.5%
โข2020: 21.4%
โข2021: 24.2%
โข2022: 30.7%
โข2023: 33.7%
RETURN ON EQUITYโ
โข2019: 35.2%
โข2020: 30.7%
โข2021: 33.4%
โข2022: 40.9%
โข2023: 46.5%
$V has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2013: $11.78B
โข2023: $32.65B
โขCAGR: 10.73%
FREE CASH FLOWโ
โข2013: $2.55B
โข2023: $19.70B
โขCAGR: 22.68%
NORMALIZED EPSโ
โข2013: $1.90
โข2023: $8.77
โขCAGR: 16.52%
SHARE BUYBACKSโ
โข2013 Shares Outstanding: 2.62B
โขLTM Shares Outstanding: 2.02B
By reducing its shares outstanding 23%, $V increased its EPS by 30% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 97.8%
โขLTM Operating Margins: 67.3%
โขLTM Net Income Margins: 53.0%
***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, $V has to grow earnings at a 13.18% 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 less than the (13.18%) required growth rate:
2024E: $9.96 (13.6% YoY) *FY Sep
2025E: $11.19 (12.4% YoY)
2026E: $12.66 (13.1% YoY)
$V has an excellent track record of meeting analyst estimates ~2 years out, so letโs assume $V ends 2026 with $12.66 in EPS & see its CAGR potential assuming different multiples
29x P/E: $367.14๐ต โฆ ~14.6% CAGR
28x P/E: $354.48๐ต โฆ ~12.9% CAGR
27x P/E: $341.82๐ต โฆ ~11.2% CAGR
26x P/E: $329.16๐ต โฆ ~9.3% CAGR
As you can see, $V appears to have attractive return potential if we assume >27x earnings, a multiple near its 10-year mean & more importantly โ a multiple justified by its growth rate AND quality โ even assuming a 36x multiple, $V is still fairly attractive
I consider $V one of the best businesses in the world & as Warren Buffett says:
โItโs far better to buy a wonderful company at a fair price than a fair company at a wonderful priceโ
$V is even trading at a valuation slightly better than just a fair price
Today at $272.50๐ต $V appears to be a worthwhile consideration for investment
If I were adding shares of $V today, Iโd also leave some extra capital to accumulate even more shares closer to 24x (if it gets there) โ roughly 9% below todayโs price or at ~$248๐ต
#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, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
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AkhenOsiris
Fackman tweets and Putin interview responses ๐คข
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Fackman tweets and Putin interview responses ๐คข
Bill Ackman right now - ๎จ Q-Cap ๎จtweet
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โ Brandon Beylo
Something that nobody wants to talk about.
What if Chinese copper demand from housing doesn't matter over the next 5-10 years?
What if they replace that demand with militarization/stockpiling?
What if other countries follow suit?
How high could #copper go?
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Something that nobody wants to talk about.
What if Chinese copper demand from housing doesn't matter over the next 5-10 years?
What if they replace that demand with militarization/stockpiling?
What if other countries follow suit?
How high could #copper go?
War is extremely bullish for #copper.
Take the NATO 155 mm artillery shell, for example.
According to the article, "Every shell contains 0.5 kg of copper, and Ukraine is firing up to 7,000 per day."
Wow.
"They can build a new mine in Ukraine with all that copper scrap.โ tweet