AkhenOsiris
@SaaSletter Is the biggest problem defining what constitutes AI? The stories are all over the map.

"AI didn't meaningfully help out our org"

"AI has saved us x% in y costs"

"Our AI revenue is now z"

How is AI impacting your team's productivity? In our latest research, preliminary estimates of AI impact reveal notable productivity gains of 20-30% and an estimated revenue impact of 16%. Learn more: bit.ly/3RtgBga - ICONIQ Growth
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AkhenOsiris
RT @DanielBZhao: Data centers & AI get a Beige book mention

> Utility contacts reported increasing power demand in commercial and industrial segments, largely attributed to new and expanding data center projects focused on the growing use of artificial intelligence technology.
-Atlanta
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Aswath Damodaran (Youtube)
The Corporate Life Cycle: Implications for Managing and Investing
For much of the last decade, I have been incorporating the idea that companies age, just like human beings do, and with just as much reluctance, into my corporate finance, valuation and investment philosophies classes. In short, it has become my one unifying construct that I can use to explain or at least talk about almost every phenomenon in business. Drawing on those lessons, and my many blog posts on the corporate life cycle, I have written a book on the topic, soon to be published by Penguin Random House. The book starts with a description of the life cycle, and the determinants of its length and shape, and then has four separate sections (each with 3-5 chapters) on implications for corporate finance, valuation, investing and management. I hope you enjoy the book as much as I enjoyed writing it.
Publication date: Late August, 2024
Links to book (for pre-order):
Amazon: https://www.amazon.com/Corporate-Lifecycle-Investment-Management-Implications/dp/0593545060
Barnes & Noble: https://www.barnesandnoble.com/w/the-corporate-life-cycle-aswath-damodaran/1143170651?ean=9780593545065
Bookshop.org: https://bookshop.org/p/books/the-corporate-lifecycle-business-investment-and-management-implications-aswath-damodaran/19850366?ean=9780593545065
Apple: https://books.apple.com/us/audiobook/the-corporate-life-cycle-business-investment/id1680865376
There will be an Indian edition that should come out at about the same time, which will be available on Indian online sites as well.

⁠Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: ~2 & 1/2 months ago I shared my “sober valuation analysis 🧘🏽‍♂️” on $QLYS stating:

“Albeit, for investors that prefer to consider the downside first (as myself) the current assumptions don’t leave us with a margin of safety

I’d become interested in $QLYS closer to 28x earnings or at $145💵 (~12.5% below todays price)

I understand I may be asking for too much on the valuation — however I don’t view it that way considering competition in the sector & $QLYS slowdown in growth which could lead to a re-rating in its multiple”

Since then, $QLYS dropped ~18% & is currently trading at $134.73💵, slightly below my $145💵 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 🧘🏽‍♂️

•NTM P/E Ratio: 32.03x
•5-Year Mean: 37.39x

•NTM FCF Yield: 3.58%
•5-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 🧠***

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

BALANCE SHEET✅
•Cash & Short-Term Inv: $425.56M
•Long-Term Debt: $0

$QLYS has an excellent balance sheet

RETURN ON CAPITAL✅
•2019: 16.5%
•2020: 20.9%
•2021: 23.7%
•2022: 39.4%
•2023: 41.1%

RETURN ON EQUITY✅
•2019: 18.6%
•2020: 23.1%
•2021: 16.9%
•2022: 29.8%
•2023: 46.1%

$QLYS has strong return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $107.96M
•2023: $554.46M
•CAGR: 17.77%

FREE CASH FLOW✅
•2013: $11.43M
•2023: $235.82M
•CAGR: 35.34%

NORMALIZED EPS✅
•2013: $0.20
•2023: $5.27
•CAGR: 38.70%

SHARE BUYBACKS❌ / ✅
•2013 Shares Outstanding: 35.97M
•LTM Shares Outstanding: 37.60M

However, from 2018 - 2023, $QLYS reduced its shares outstanding ~10.2%, increasing its EPS by ~11.3% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 80.6%
•LTM Operating Margins: 29.4%
•LTM Net Income Margins: 27.3%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~17% MORE in EPS & about the same in FCF per share

Using Benjamin Graham’s 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 let’s assume $QLYS ends 2026 with $6.67 in EPS & see its CAGR potential assuming different multiples

35x P/E: $233.45💵 … ~13.5% CAGR

32.5x P/E: $216.77💵 … ~10.4% CAGR

30x P/E: $200.10💵 … ~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 isn’t unreasonable given $QLYS historical valuation & financial efficiency — 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 don’t leave us with a margin of safety

I’d become interested in $QLYS closer to 28x earnings or at $145💵 (~12.5% below todays price)

I understand I may be asking for too much on the valuation — however I don’t view it that way considering competition in the sector & $QLYS slowdown in growth which could lead to a re-rating [...]

⁠Dimitry Nakhla | Babylon Capital®
Amazon ($AMZN) currently trades at 19x Operating Cash Flow (OCF)

Interestingly, this is the 4th time since 2012 that $AMZN has reached this valuation, with previous instances in 2015, 2016, 2022, & 2023 (see photos below)

What's notable is the CAGR (Compound Annual Growth Rate) that $AMZN achieved during each of these periods. Let's take a closer look:

Jan 2015: 30.92% ✅
Jul 2016: 26.91% ✅
Dec 2022: 61.55% ✅
Feb 2023: 59.48% ✅

I've previously suggested that market participants are underestimating Amazon's ($AMZN) FCF growth potential, & I still believe that's the case

With its strong fundamentals, $AMZN appears to be a worthwhile investment consideration at today's levels, offering a compelling opportunity for long-term growth

#stocks #investing

Charts / Source: FAST Graphs
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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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AkhenOsiris
$CRWD Downgraded to Sell from Buy at Redburn, target $275 from $380

The stock's valuation is "demanding" and any disappointment to sales or annual recurring revenue could bring a sharp de-rating, the analyst tells investors in a research note. The firm sees downside risk to current buy-side expectations. CrowdStrike's consensus growth expectations do not reflect early indicators of a slowdown, contends Redburn.
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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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