Offshore
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โ Dimitry Nakhla | Babylon Capitalยฎ
2 weeks ago I shared my โsober valuation analysis ๐ง๐ฝโโ๏ธโ on $LULU
Since then, $LULU popped +16% after reporting better than expected quarterly result
As I stated in my analysis:
โ$LULU can demand a >20x multiple IF it beats growth estimates over the next few years, signaling that the sell-off due to competitive pressures may be overdone
I donโt believe itโs unreasonable to rely on ~22x (especially given $LULU return metrics, balance sheet, & strong history of growth โ $LULU has grown its revenues ANNUALLY since 2007 ๐คฏ)
Today at $300๐ต $LULU appears to be a worthwhile consideration for investment โ albeit with several competitive risks (and how $LULU responds) that should be monitored closelyโ
#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."
A sober valuation analysis on $LULU ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 21.14x
โข10-Year Mean: 35.94x
โขNTM FCF Yield: 3.80%
โข10-Year Mean: 2.16%
As you can see, $LULU appears to be trading below fair value
Going forward, investors can receive ~70% MORE in earnings per share & ~75% MORE in FCF per share ๐ง ***
Before we get into valuation, letโs take a look at why $LULU is a good business
BALANCE SHEETโ
โขCash & Short-Term Inv: $2.24B
โขTotal Debt: $1.40B
$LULU has an excellent balance sheet
RETURN ON CAPITALโ
โข2020: 32.5%
โข2021: 23.8%
โข2022: 37.4%
โข2023: 40.4%
โข2024: 39.0%
RETURN ON EQUITYโ
โข2020: 38.0%
โข2021: 26.1%
โข2022: 36.8%
โข2023: 29.0%
โข2024: 42.0%
$LULU has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $1.59B
โข2024: $9.62B
โขCAGR: 19.72%
FREE CASH FLOWโ
โข2014: $171.93M
โข2024: $1.64B
โขCAGR: 25.33%
NORMALIZED EPSโ
โข2014: $1.91
โข2024: $12.77
โขCAGR: 20.92%
SHARE BUYBACKSโ
โข2014 Shares Outstanding: 146.04M
โขLTM Shares Outstanding: 127.06M
By reducing its shares outstanding ~13%, $LULU increased its EPS by ~15% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 58.3%
โขLTM Operating Margins: 22.9%
โขLTM Net Income Margins: 16.1%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~70% MORE in EPS & ~75% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $LULU has to grow earnings at a 10.57% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2026 EPS growth over next few years to be slightly above the (10.57%) required growth rate:
2025E: $14.16 (10.9% YoY) *FY Jan
2026E: $15.86 (12.0% YoY)
$LULU has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $LULU ends 2026 with $15.86 in EPS & see its CAGR potential assuming different multiples:
25x P/E: $396.50๐ต โฆ ~19.2% CAGR
24x P/E: $380.64๐ต โฆ ~16.2% CAGR
23x P/E: $364.78๐ต โฆ ~13.1% CAGR
22x P/E: $348.92๐ต โฆ ~10.0% CAGR
As you can see, $[...]
2 weeks ago I shared my โsober valuation analysis ๐ง๐ฝโโ๏ธโ on $LULU
Since then, $LULU popped +16% after reporting better than expected quarterly result
As I stated in my analysis:
โ$LULU can demand a >20x multiple IF it beats growth estimates over the next few years, signaling that the sell-off due to competitive pressures may be overdone
I donโt believe itโs unreasonable to rely on ~22x (especially given $LULU return metrics, balance sheet, & strong history of growth โ $LULU has grown its revenues ANNUALLY since 2007 ๐คฏ)
Today at $300๐ต $LULU appears to be a worthwhile consideration for investment โ albeit with several competitive risks (and how $LULU responds) that should be monitored closelyโ
#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."
A sober valuation analysis on $LULU ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 21.14x
โข10-Year Mean: 35.94x
โขNTM FCF Yield: 3.80%
โข10-Year Mean: 2.16%
As you can see, $LULU appears to be trading below fair value
Going forward, investors can receive ~70% MORE in earnings per share & ~75% MORE in FCF per share ๐ง ***
Before we get into valuation, letโs take a look at why $LULU is a good business
BALANCE SHEETโ
โขCash & Short-Term Inv: $2.24B
โขTotal Debt: $1.40B
$LULU has an excellent balance sheet
RETURN ON CAPITALโ
โข2020: 32.5%
โข2021: 23.8%
โข2022: 37.4%
โข2023: 40.4%
โข2024: 39.0%
RETURN ON EQUITYโ
โข2020: 38.0%
โข2021: 26.1%
โข2022: 36.8%
โข2023: 29.0%
โข2024: 42.0%
$LULU has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $1.59B
โข2024: $9.62B
โขCAGR: 19.72%
FREE CASH FLOWโ
โข2014: $171.93M
โข2024: $1.64B
โขCAGR: 25.33%
NORMALIZED EPSโ
โข2014: $1.91
โข2024: $12.77
โขCAGR: 20.92%
SHARE BUYBACKSโ
โข2014 Shares Outstanding: 146.04M
โขLTM Shares Outstanding: 127.06M
By reducing its shares outstanding ~13%, $LULU increased its EPS by ~15% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 58.3%
โขLTM Operating Margins: 22.9%
โขLTM Net Income Margins: 16.1%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~70% MORE in EPS & ~75% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $LULU has to grow earnings at a 10.57% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2026 EPS growth over next few years to be slightly above the (10.57%) required growth rate:
2025E: $14.16 (10.9% YoY) *FY Jan
2026E: $15.86 (12.0% YoY)
$LULU has a decent track record of meeting analyst estimates ~2 years out, so letโs assume $LULU ends 2026 with $15.86 in EPS & see its CAGR potential assuming different multiples:
25x P/E: $396.50๐ต โฆ ~19.2% CAGR
24x P/E: $380.64๐ต โฆ ~16.2% CAGR
23x P/E: $364.78๐ต โฆ ~13.1% CAGR
22x P/E: $348.92๐ต โฆ ~10.0% CAGR
As you can see, $[...]
Offshore
โ Dimitry Nakhla | Babylon Capitalยฎ 2 weeks ago I shared my โsober valuation analysis ๐ง๐ฝโโ๏ธโ on $LULU Since then, $LULU popped +16% after reporting better than expected quarterly result As I stated in my analysis: โ$LULU can demand a >20x multiple IF itโฆ
LULU appears to have attractive return potential IF it can demand a >22x multiple
However, itโs important to keep in mind that itโs difficult to maintain a strong competitive advantage (over long periods of time) in the athletic apparel space & recent growth concerns amid increased competition is why $LULU stock is trading near the lowest end of its historical multiple range
$LULU can demand a >20x multiple IF it beats growth estimates over the next few years, signaling that the sell-off due to competitive pressures may be overdone
I donโt believe itโs unreasonable to rely on ~22x (especially given $LULU return metrics, balance sheet, & strong history of growth โ $LULU has grown its revenues ANNUALLY since 2007 ๐คฏ)
Today at $300๐ต $LULU appears to be a worthwhile consideration for investment โ albeit with several competitive risks (and how $LULU responds) that should be monitored closely
#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 ๐๐๐๐ฎ๐ซ๐๐๐ฒ. "- Dimitry Nakhla | Babylon Capitalยฎ
tweet
However, itโs important to keep in mind that itโs difficult to maintain a strong competitive advantage (over long periods of time) in the athletic apparel space & recent growth concerns amid increased competition is why $LULU stock is trading near the lowest end of its historical multiple range
$LULU can demand a >20x multiple IF it beats growth estimates over the next few years, signaling that the sell-off due to competitive pressures may be overdone
I donโt believe itโs unreasonable to rely on ~22x (especially given $LULU return metrics, balance sheet, & strong history of growth โ $LULU has grown its revenues ANNUALLY since 2007 ๐คฏ)
Today at $300๐ต $LULU appears to be a worthwhile consideration for investment โ albeit with several competitive risks (and how $LULU responds) that should be monitored closely
#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 ๐๐๐๐ฎ๐ซ๐๐๐ฒ. "- Dimitry Nakhla | Babylon Capitalยฎ
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Offshore
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โ Dimitry Nakhla | Babylon Capitalยฎ
RT @HangmanTrades: I donโt respect many traders on X 90% are fake screenshots, discord pumpers, delete tweets. This guy is one of the 3 or 4 Iโve found who are legit
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RT @HangmanTrades: I donโt respect many traders on X 90% are fake screenshots, discord pumpers, delete tweets. This guy is one of the 3 or 4 Iโve found who are legit
2 weeks ago I shared my โsober valuation analysis ๐ง๐ฝโโ๏ธโ on $LULU
Since then, $LULU popped +16% after reporting better than expected quarterly result
As I stated in my analysis:
โ$LULU can demand a >20x multiple IF it beats growth estimates over the next few years, signaling that the sell-off due to competitive pressures may be overdone
I donโt believe itโs unreasonable to rely on ~22x (especially given $LULU return metrics, balance sheet, & strong history of growth โ $LULU has grown its revenues ANNUALLY since 2007 ๐คฏ)
Today at $300๐ต $LULU appears to be a worthwhile consideration for investment โ albeit with several competitive risks (and how $LULU responds) that should be monitored closelyโ
#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
Offshore
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โ Dimitry Nakhla | Babylon Capitalยฎ
A sober valuation analysis on $PYPL ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 15.37x
โข5-Year Mean: 31.06x
โขNTM FCF Yield: 10.09%
โข5-Year Mean: 5.08%
As you can see, $PYPL appears to be trading below fair value
Going forward, investors can receive ~102% MORE in earnings per share & ~98% MORE in FCF per share ๐ง ***
Before we get into valuation, letโs take a look at why $PYPL is a good business
BALANCE SHEETโ
โขCash & Short-Term Inv: $14.06B
โขLong-Term Debt: $9.68B
$PYPL has an excellent balance sheet, an A- S&P Credit Rating, & 16.16x FFO Interest Coverage
RETURN ON CAPITALโ
โข2019: 12.4%
โข2020: 11.5%
โข2021: 13.6%
โข2022: 12.7%
โข2023: 14.8%
โขLTM: 15.7%
RETURN ON EQUITYโ
โข2019: 15.2%
โข2020: 22.7%
โข2021: 20.0%
โข2022: 11.5%
โข2023: 20.5%
โขLTM: 21.4%
$PYPL has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2018: $15.45B
โข2023: $29.77B
โขCAGR: 14.01%
FREE CASH FLOWโ*
โข2018: $4.66B
โข2023: $4.22B
โขDecrease: (9.44%)
*FCF in 2017 was $1.86B, so FCF rose ~150% in 2018 start date (โnormalizingโ the decline above)
NORMALIZED EPSโ
โข2018: $2.42
โข2023: $5.10
โขCAGR: 16.07%
SHARE BUYBACKSโ
โข2015 Shares Outstanding: 1.23B
โขLTM Shares Outstanding: 1.09B
By reducing its shares outstanding by 11.3%, $PYPL increased its EPS by 12.7% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 39.6%
โขLTM Operating Margins: 16.7%
โขLTM Net Income Margins: 14.3%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~102% MORE in EPS & ~98% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $PYPL has to grow earnings at a 7.69% 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 below the (7.69%) required growth rate:
2024E: $4.12 (-19.1% YoY) *FY Dec
2025E: $4.56 (10.6% YoY)
2026E: $5.00 (9.7% YoY)
$PYPL has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $PYPL ends 2026 with $5.00 in EPS & see its CAGR potential assuming different multiples
18x P/E: $90.00๐ต โฆ ~17.00% CAGR
17x P/E: $85.00๐ต โฆ ~14.4% CAGR
16x P/E: $80.00๐ต โฆ ~11.7% CAGR
As you can see, $PYPL appears to have attractive return potential if we assume >16 earnings & aggressive return potential if we assume >18x earnings
The ๐ isn't a mean reversion in $PYPL's multiple, but a modest increase (still below its historical average) - a reasonable and safe assumption
Thereโs still a ton of negative sentiment around $PYPL and this sentiment can be flipped in just a few quarters if management continues to make progress towards its goals
I believe they will โ however, investors concerned with the โturnaround risksโ associated with $PYPL can still benefit by allocating a smaller % to $PYPL
Today at $66๐ต $PYPL appears to be a strong consideration for investment (albeit, with some turnaround risks & competitive risks)
#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.
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A sober valuation analysis on $PYPL ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 15.37x
โข5-Year Mean: 31.06x
โขNTM FCF Yield: 10.09%
โข5-Year Mean: 5.08%
As you can see, $PYPL appears to be trading below fair value
Going forward, investors can receive ~102% MORE in earnings per share & ~98% MORE in FCF per share ๐ง ***
Before we get into valuation, letโs take a look at why $PYPL is a good business
BALANCE SHEETโ
โขCash & Short-Term Inv: $14.06B
โขLong-Term Debt: $9.68B
$PYPL has an excellent balance sheet, an A- S&P Credit Rating, & 16.16x FFO Interest Coverage
RETURN ON CAPITALโ
โข2019: 12.4%
โข2020: 11.5%
โข2021: 13.6%
โข2022: 12.7%
โข2023: 14.8%
โขLTM: 15.7%
RETURN ON EQUITYโ
โข2019: 15.2%
โข2020: 22.7%
โข2021: 20.0%
โข2022: 11.5%
โข2023: 20.5%
โขLTM: 21.4%
$PYPL has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2018: $15.45B
โข2023: $29.77B
โขCAGR: 14.01%
FREE CASH FLOWโ*
โข2018: $4.66B
โข2023: $4.22B
โขDecrease: (9.44%)
*FCF in 2017 was $1.86B, so FCF rose ~150% in 2018 start date (โnormalizingโ the decline above)
NORMALIZED EPSโ
โข2018: $2.42
โข2023: $5.10
โขCAGR: 16.07%
SHARE BUYBACKSโ
โข2015 Shares Outstanding: 1.23B
โขLTM Shares Outstanding: 1.09B
By reducing its shares outstanding by 11.3%, $PYPL increased its EPS by 12.7% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 39.6%
โขLTM Operating Margins: 16.7%
โขLTM Net Income Margins: 14.3%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~102% MORE in EPS & ~98% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $PYPL has to grow earnings at a 7.69% 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 below the (7.69%) required growth rate:
2024E: $4.12 (-19.1% YoY) *FY Dec
2025E: $4.56 (10.6% YoY)
2026E: $5.00 (9.7% YoY)
$PYPL has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $PYPL ends 2026 with $5.00 in EPS & see its CAGR potential assuming different multiples
18x P/E: $90.00๐ต โฆ ~17.00% CAGR
17x P/E: $85.00๐ต โฆ ~14.4% CAGR
16x P/E: $80.00๐ต โฆ ~11.7% CAGR
As you can see, $PYPL appears to have attractive return potential if we assume >16 earnings & aggressive return potential if we assume >18x earnings
The ๐ isn't a mean reversion in $PYPL's multiple, but a modest increase (still below its historical average) - a reasonable and safe assumption
Thereโs still a ton of negative sentiment around $PYPL and this sentiment can be flipped in just a few quarters if management continues to make progress towards its goals
I believe they will โ however, investors concerned with the โturnaround risksโ associated with $PYPL can still benefit by allocating a smaller % to $PYPL
Today at $66๐ต $PYPL appears to be a strong consideration for investment (albeit, with some turnaround risks & competitive risks)
#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
Bank of America analysts predict a multi-year boom for the semiconductor industry, fueled by the surging demand for artificial intelligence.
The bank said in a note that observations from Computex, a tech trade show, highlight a global push towards AI across various sectors.
"We see the semiconductor industry is set for multi-year growth, with the tech titans being all in for AI at Computex," states BofA.
They highlight the increasing presence of AI in everything from data centers to edge computing, PCs, and smartphones. BofA believes this will necessitate larger semiconductor dies to handle the growing volume of data and processing power required for AI applications.
The rapid pace of innovation underscores this demand. "The relentless compute demand rise can be reflected in AMD's and NVIDIA's fast product development cadence of one year," adds BofA.
tweet
Bank of America analysts predict a multi-year boom for the semiconductor industry, fueled by the surging demand for artificial intelligence.
The bank said in a note that observations from Computex, a tech trade show, highlight a global push towards AI across various sectors.
"We see the semiconductor industry is set for multi-year growth, with the tech titans being all in for AI at Computex," states BofA.
They highlight the increasing presence of AI in everything from data centers to edge computing, PCs, and smartphones. BofA believes this will necessitate larger semiconductor dies to handle the growing volume of data and processing power required for AI applications.
The rapid pace of innovation underscores this demand. "The relentless compute demand rise can be reflected in AMD's and NVIDIA's fast product development cadence of one year," adds BofA.
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AkhenOsiris
Copy/pasta from 300, 400, 500, 600, 700, 800, 900, 1000, 1100
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Copy/pasta from 300, 400, 500, 600, 700, 800, 900, 1000, 1100
Make sure to buy todays 1% dip in nvda, itโs the gift of a lifetime - HeadofMicroCapitaltweet
AkhenOsiris
RT @trader_53: *ALPHABET APPOINTMENT OF ANAT ASHKENAZI AS NEW CFO
Ah, so Lilly loses the CFO to Alphabet $GOOG
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RT @trader_53: *ALPHABET APPOINTMENT OF ANAT ASHKENAZI AS NEW CFO
Ah, so Lilly loses the CFO to Alphabet $GOOG
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โ Dimitry Nakhla | Babylon Capitalยฎ
10 Quality Stocks That Consistently Achieved ROIC >20% ANNUALLY For The Last 10 Years ๐ธ
๐ Copart $CPRT
โขNTM P/E: 34.23x
โข5-Year Mean: 32.22x
๐ฝ Taiwan Semiconductor $TSM
โขNTM P/E: 24.58x
โข5-Year Mean: 21.25x
๐๐ผโโ๏ธ Pool Corp $POOL
โขNTM P/E: 26.42x
โข5-Year Mean: 29.54x
๐ณ Mastercard $MA
โขNTM P/E: 30.45x
โข5-Year Mean: 35.36x
๐ข NVR Inc $NVR
โขNTM P/E: 15.46x
โข5-Year Mean: 14.50x
๐ Old Dominion Freight Line $ODFL
โขNTM P/E: 27.34x
โข5-Year Mean: 28.82x
๐ฐ Automatic Data Processing $ADP
โขNTM P/E: 25.53x
โข5-Year Mean: 28.11x
๐ Apple $AAPL
โขNTM P/E: 28.51x
โข5-Year Mean: 25.80x
๐ฉ Fastenal $FAST
โขNTM P/E: 30.63x
โข5-Year Mean: 29.05x
๐ฉณ Lululemon $LULU
โขNTM P/E: 22.08x
โข5-Year Mean: 42.17x
#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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10 Quality Stocks That Consistently Achieved ROIC >20% ANNUALLY For The Last 10 Years ๐ธ
๐ Copart $CPRT
โขNTM P/E: 34.23x
โข5-Year Mean: 32.22x
๐ฝ Taiwan Semiconductor $TSM
โขNTM P/E: 24.58x
โข5-Year Mean: 21.25x
๐๐ผโโ๏ธ Pool Corp $POOL
โขNTM P/E: 26.42x
โข5-Year Mean: 29.54x
๐ณ Mastercard $MA
โขNTM P/E: 30.45x
โข5-Year Mean: 35.36x
๐ข NVR Inc $NVR
โขNTM P/E: 15.46x
โข5-Year Mean: 14.50x
๐ Old Dominion Freight Line $ODFL
โขNTM P/E: 27.34x
โข5-Year Mean: 28.82x
๐ฐ Automatic Data Processing $ADP
โขNTM P/E: 25.53x
โข5-Year Mean: 28.11x
๐ Apple $AAPL
โขNTM P/E: 28.51x
โข5-Year Mean: 25.80x
๐ฉ Fastenal $FAST
โขNTM P/E: 30.63x
โข5-Year Mean: 29.05x
๐ฉณ Lululemon $LULU
โขNTM P/E: 22.08x
โข5-Year Mean: 42.17x
#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
~2 & 1/2 months ago I shared my โsober valuation analysis ๐ง๐ฝโโ๏ธโ on $QLYS stating:
โAlbeit, for investors that prefer to consider the downside first (as myself) the current assumptions donโt leave us with a margin of safety
Iโd become interested in $QLYS closer to 28x earnings or at $145๐ต (~12.5% below todays price)
I understand I may be asking for too much on the valuation โ however I donโt view it that way considering competition in the sector & $QLYS slowdown in growth which could lead to a re-rating in its multipleโ
Since then, $QLYS dropped ~18% & is currently trading at $134.73๐ต, slightly below my $145๐ต target
While I remain interested in $QLYS, I'm hesitant to add shares at present due to the competitive landscape, sector slowdown, preference to own $FTNT & $PANW over $QLYS, and the availability of other attractive opportunities in the market that have a wider moat
#stocks #investing"
A sober valuation analysis on $QLYS ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 32.03x
โข5-Year Mean: 37.39x
โขNTM FCF Yield: 3.58%
โข5-Year Mean: 3.63%
As you can see, $QLYS appears to be trading slightly below fair value
Going forward, investors can receive ~17% MORE in earnings per share & about the same in FCF per share ๐ง ***
Before we get into valuation, letโs take a look at why $QLYS is a quality business
BALANCE SHEETโ
โขCash & Short-Term Inv: $425.56M
โขLong-Term Debt: $0
$QLYS has an excellent balance sheet
RETURN ON CAPITALโ
โข2019: 16.5%
โข2020: 20.9%
โข2021: 23.7%
โข2022: 39.4%
โข2023: 41.1%
RETURN ON EQUITYโ
โข2019: 18.6%
โข2020: 23.1%
โข2021: 16.9%
โข2022: 29.8%
โข2023: 46.1%
$QLYS has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2013: $107.96M
โข2023: $554.46M
โขCAGR: 17.77%
FREE CASH FLOWโ
โข2013: $11.43M
โข2023: $235.82M
โขCAGR: 35.34%
NORMALIZED EPSโ
โข2013: $0.20
โข2023: $5.27
โขCAGR: 38.70%
SHARE BUYBACKSโ / โ
โข2013 Shares Outstanding: 35.97M
โขLTM Shares Outstanding: 37.60M
However, from 2018 - 2023, $QLYS reduced its shares outstanding ~10.2%, increasing its EPS by ~11.3% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 80.6%
โขLTM Operating Margins: 29.4%
โขLTM Net Income Margins: 27.3%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~17% MORE in EPS & about the same in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $QLYS has to grow earnings at a 16.02% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (16.02%) required growth rate:
2024E: $5.19 (-1.5% YoY) *FY Dec
2025E: $5.71 (10.1% YoY)
2026E: $6.67 (16.8% YoY)
$QLYS has an excellent track record of meeting analyst estimates ~2 years out, so letโs assume $QLYS ends 2026 with $6.67 in EPS & see its CAGR potential assuming different multiples
35x P/E: $233.45๐ต โฆ ~13.5% CAGR
32.5x P/E: $216.77๐ต โฆ ~10.4% CAGR
30x P/E: $200.10๐ต โฆ ~7.3% CAGR
As you can see, $QLYS needs to trade closer to >32.5x earnings for it to have double-digit return potential
This isnโt unreasonable given $QLYS historical valuation & financial efficiency โ moreover, $QLYS has maintained fairly strong support near that 32.5x level
$QLYS appears to be a great business treading for a fair price
Albeit, for investors that prefer to consider the downside first (as myself) the current assumptions donโt leave us with a margin of safety
Iโd become interested in $QLYS closer to 28x earnings or at $145๐ต (~12.5% below todays price)
I understand I may be asking for too much on the valuation โ however I donโt view it that way considering competition in the sector & $QLYS slowdown in growth which could lead to a re-rating in its multiple
[...]
~2 & 1/2 months ago I shared my โsober valuation analysis ๐ง๐ฝโโ๏ธโ on $QLYS stating:
โAlbeit, for investors that prefer to consider the downside first (as myself) the current assumptions donโt leave us with a margin of safety
Iโd become interested in $QLYS closer to 28x earnings or at $145๐ต (~12.5% below todays price)
I understand I may be asking for too much on the valuation โ however I donโt view it that way considering competition in the sector & $QLYS slowdown in growth which could lead to a re-rating in its multipleโ
Since then, $QLYS dropped ~18% & is currently trading at $134.73๐ต, slightly below my $145๐ต target
While I remain interested in $QLYS, I'm hesitant to add shares at present due to the competitive landscape, sector slowdown, preference to own $FTNT & $PANW over $QLYS, and the availability of other attractive opportunities in the market that have a wider moat
#stocks #investing"
A sober valuation analysis on $QLYS ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 32.03x
โข5-Year Mean: 37.39x
โขNTM FCF Yield: 3.58%
โข5-Year Mean: 3.63%
As you can see, $QLYS appears to be trading slightly below fair value
Going forward, investors can receive ~17% MORE in earnings per share & about the same in FCF per share ๐ง ***
Before we get into valuation, letโs take a look at why $QLYS is a quality business
BALANCE SHEETโ
โขCash & Short-Term Inv: $425.56M
โขLong-Term Debt: $0
$QLYS has an excellent balance sheet
RETURN ON CAPITALโ
โข2019: 16.5%
โข2020: 20.9%
โข2021: 23.7%
โข2022: 39.4%
โข2023: 41.1%
RETURN ON EQUITYโ
โข2019: 18.6%
โข2020: 23.1%
โข2021: 16.9%
โข2022: 29.8%
โข2023: 46.1%
$QLYS has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2013: $107.96M
โข2023: $554.46M
โขCAGR: 17.77%
FREE CASH FLOWโ
โข2013: $11.43M
โข2023: $235.82M
โขCAGR: 35.34%
NORMALIZED EPSโ
โข2013: $0.20
โข2023: $5.27
โขCAGR: 38.70%
SHARE BUYBACKSโ / โ
โข2013 Shares Outstanding: 35.97M
โขLTM Shares Outstanding: 37.60M
However, from 2018 - 2023, $QLYS reduced its shares outstanding ~10.2%, increasing its EPS by ~11.3% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 80.6%
โขLTM Operating Margins: 29.4%
โขLTM Net Income Margins: 27.3%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~17% MORE in EPS & about the same in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $QLYS has to grow earnings at a 16.02% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (16.02%) required growth rate:
2024E: $5.19 (-1.5% YoY) *FY Dec
2025E: $5.71 (10.1% YoY)
2026E: $6.67 (16.8% YoY)
$QLYS has an excellent track record of meeting analyst estimates ~2 years out, so letโs assume $QLYS ends 2026 with $6.67 in EPS & see its CAGR potential assuming different multiples
35x P/E: $233.45๐ต โฆ ~13.5% CAGR
32.5x P/E: $216.77๐ต โฆ ~10.4% CAGR
30x P/E: $200.10๐ต โฆ ~7.3% CAGR
As you can see, $QLYS needs to trade closer to >32.5x earnings for it to have double-digit return potential
This isnโt unreasonable given $QLYS historical valuation & financial efficiency โ moreover, $QLYS has maintained fairly strong support near that 32.5x level
$QLYS appears to be a great business treading for a fair price
Albeit, for investors that prefer to consider the downside first (as myself) the current assumptions donโt leave us with a margin of safety
Iโd become interested in $QLYS closer to 28x earnings or at $145๐ต (~12.5% below todays price)
I understand I may be asking for too much on the valuation โ however I donโt view it that way considering competition in the sector & $QLYS slowdown in growth which could lead to a re-rating in its multiple
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