post_id
string | comment_id
string | comment
string | comment_score
float64 | comment_author
string | comment_created_utc
float64 | post_title
string | post_text
string | post_score
float64 | post_author
string | post_created_utc
float64 | company
string | subreddit
string | post_url
string |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1lidh6b
|
mzb5hb0
|
Theres a warning on nicotine products too. I dont see MO, PM, BTI performing bad.
| 10 |
Steel_BEAR69
| 1,750,677,003 |
$KO, $PEP and the new Texas health labels
|
Today I saw that Texas are making companies like $KO and $PEP put health warnings on their beverage and sweets, as well as Mars' M&Ms (which is rather irrelevant, since Mars is private).
Basically, they've been given until 2027 to remove 40 substances - including bleached flour and artificial dyes.
What hit me was that High Fructose Corn Syrup did not make the warnings list. This wasn't because it was healthy - HCFS was formerly banned by the EU and UK but came off the list in 2017 (probs because of healthy lobbying by Big Sugar (21.3m euros at the last count, not because the EU 'finally saw the light).
But what also hit me is the warnings in Texas WILL be followed by the same in 49 other states (in my view), because states don't want to be seen as encouraging people to eat like s\*\*t, and they are worried about RFKJ and his mad campaign to make everyone better again.
So then what about the shares in $KO and $PEP? With this stuff AS WELL as worries in the Middle East, it is a definitely worrying trend for me. Or am I simply worrying for worry's sake, bearing in mind the stock's still up 10% YTD and people will always go to their crappy products for comfort food in times like this.
| 10 |
Nearby_Valuable_5467
| 1,750,675,833 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1lidh6b/ko_pep_and_the_new_texas_health_labels/
|
1lidh6b
|
mzcpyai
|
California has been doing this for years. You think people actually read those warnings? You see anybody drop a can of Coke because of some warning they prob don't understand?
| 9 |
Ok_Eye4858
| 1,750,695,820 |
$KO, $PEP and the new Texas health labels
|
Today I saw that Texas are making companies like $KO and $PEP put health warnings on their beverage and sweets, as well as Mars' M&Ms (which is rather irrelevant, since Mars is private).
Basically, they've been given until 2027 to remove 40 substances - including bleached flour and artificial dyes.
What hit me was that High Fructose Corn Syrup did not make the warnings list. This wasn't because it was healthy - HCFS was formerly banned by the EU and UK but came off the list in 2017 (probs because of healthy lobbying by Big Sugar (21.3m euros at the last count, not because the EU 'finally saw the light).
But what also hit me is the warnings in Texas WILL be followed by the same in 49 other states (in my view), because states don't want to be seen as encouraging people to eat like s\*\*t, and they are worried about RFKJ and his mad campaign to make everyone better again.
So then what about the shares in $KO and $PEP? With this stuff AS WELL as worries in the Middle East, it is a definitely worrying trend for me. Or am I simply worrying for worry's sake, bearing in mind the stock's still up 10% YTD and people will always go to their crappy products for comfort food in times like this.
| 10 |
Nearby_Valuable_5467
| 1,750,675,833 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1lidh6b/ko_pep_and_the_new_texas_health_labels/
|
1jiqe9p
|
mjh3pfs
|
We all knew Trump would back down from his tariff nonsense. He's spineless and cares a lot about what Wall Street thinks of him.
| 8 |
BellyFullOfMochi
| 1,742,822,985 |
These are the stocks on my watchlist (03/24) - Minor Market Bounce due to (some) held back tariffs
|
This is a daily watchlist for short-term trading: I might trade all/none of the stocks listed, and even stocks not listed! I am targeting potentially good candidates for short-term trading; I have no opinion on them as investments. The potential of the stock moving today is what makes it interesting, everything else is secondary.
News: [US Treasuries Fall on Signs That Trump Will Dilute April Tariffs](https://www.bloomberg.com/news/articles/2025-03-24/us-treasuries-fall-on-signs-that-trump-will-dilute-april-tariffs)
This has resulted in a market bounce and overall means that markets will likely NOT be as impacted by tariffs as they were expecting.
The tariff game Trump is playing reminds me of that scene from the office: "You have no idea the physical toll three vasectomies have on a person! Snip Snap! Snip Snap! Snip Snap!" -Michael Scott.
Anyway back to the watchlist.
[**TSLA (Tesla)**](https://finviz.com/quote.ashx?t=TSLA&p=d)\- Seen a significant bounce in TSLA due to the news of the lessened (supposedly) future tariffs—interested in seeing if we can break above $260 at open; otherwise, not interested and likely still will be negatively biased. This might actually be reacting a little positively due to BYD's blowout earnings. BYD reported $107B annual revenue for the year and are close to TSLA's profit! Mainly concerned in the long run about margin compression due to pricing cuts, increased competition in the EV space, macro headwinds, and of course, Elon making fork sculptures in the White House but no one appreciating them.
[**MSTR (MicroStrategy)**](https://finviz.com/quote.ashx?t=MSTR&p=d)\- MicroStrategy buys 6,911 more of the underlying, now holds over 506k, currently at 2x premium. Nothing too interesting to note beyond the typical upwards move from whenever MSTR announces a buy of the underlying. We've bounced slightly off the lows, but worth noting that the underlying is also rose from news that Trump might use his gold holdings to buy more. I always keep in mind MSTR's heavy dependence on underlying performance, regulatory scrutiny, and volatility, of course. Related tickers to watch on this are RIOT and COIN/HOOD.
[**LUNR (Intuitive Machines)**](https://finviz.com/quote.ashx?t=LUNR&p=d)\- Reported strong Q4 and FY24 results. Q4 revenue of $54.7M (+80% YoY) and FY24 revenue of $228.0M (nearly 3x YoY).
Backlog reached $328.3M (+22% YoY), with **projected positive run-rate Adj. EBITDA by year-end**. Overall backlog seemed to be the second most important factor, signifies that there is future revenue and they are far more financially stable than anticipated and even profitable by year end! I have a very small position long. Going to bail if we break below $7 but overall I think there are many tailwinds that can help LUNR. **L**UNR's main risks are execution risk tied to lunar missions (beginning of this month saw the stock fall close to 50% in a single day), contract delays, reliance on government funding, and high R&D intensity with limited margin buffer/no defined return. Also watching RKLB on this.
[**AZEK (The AZEK Company)**](https://finviz.com/quote.ashx?t=AZEK&p=d)\- James Hardie to acquire AZEK in a cash/stock deal valued at $8.75B (including debt). AZEK holders to receive $26.45 cash + 1.034 JHX shares, totaling \~$53/share (as of premarket prices)**.** These hybrid stock/cash acquisitions can fluctuate in price because of how the acquirer pays with their own stock. Typical M&A risks apply such as integration risk, housing market softness, FX exposure (James Hardie also trades in Australia IIRC), regulatory risk, etc.
**Earnings:** [**OKLO**](https://finviz.com/quote.ashx?t=OKLO&p=d)
| 36 |
WinningWatchlist
| 1,742,822,143 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1jiqe9p/these_are_the_stocks_on_my_watchlist_0324_minor/
|
1hemiqk
|
m24v262
|
It looks like [Donald Trump Jr joining as an advisor](https://www.unusualmachines.com/#b2iLibScrollTo) has impacted the stock price. Their followers probably think the company will benefit from the upcoming presidency
| 29 |
alecjperkins213
| 1,734,244,862 |
Unusual machines post IPO financials, please explain how there’s value here…
|
Here is the [financial report](https://api.mziq.com/mzfilemanager/v2/d/dc42d320-9904-4869-bdff-a5da8e276025/5b5b951c-e05f-0d67-75ae-38e3fe4d21e0?origin=1) for unusual machines Q1 2024, which is all I can see available on their site which seems odd.
But to the point, can anyone after reading through these numbers and the included information possibly see how this company is valuable in that it’s stock has gone up close to 300% over the year?? To me it looks like they are swimming deeper and deeper in the red and with no real tangible reasoning to reverse that trend?
A 1.1M net loss in Q1 and only 3M cash on hand? No foreseeable increase in earning/cost ratio? Only $1000 in property and equipment assets? The bulk of their assets are “intangible or goodwill assets” at 18M…
I don’t really understand what I’m looking at here and why it does make sense if that’s the case. Please someone enlighten me!
| 19 |
Yogurt_South
| 1,734,243,228 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1hemiqk/unusual_machines_post_ipo_financials_please/
|
1hemiqk
|
m258i5h
|
Some more stats making this even more mind blowing.
3 employees total with a $93 million market cap?!
ROE of -50%
Past 12 months- $3.5 million revenue for a net loss of (-5.3 million)
$1.75 million cash, $3.35 million debt
Profit margin of (-150%)
Altman Z score of .81
I must be missing something or how can this be up 300% in this same time period?!
| 12 |
Yogurt_South
| 1,734,253,665 |
Unusual machines post IPO financials, please explain how there’s value here…
|
Here is the [financial report](https://api.mziq.com/mzfilemanager/v2/d/dc42d320-9904-4869-bdff-a5da8e276025/5b5b951c-e05f-0d67-75ae-38e3fe4d21e0?origin=1) for unusual machines Q1 2024, which is all I can see available on their site which seems odd.
But to the point, can anyone after reading through these numbers and the included information possibly see how this company is valuable in that it’s stock has gone up close to 300% over the year?? To me it looks like they are swimming deeper and deeper in the red and with no real tangible reasoning to reverse that trend?
A 1.1M net loss in Q1 and only 3M cash on hand? No foreseeable increase in earning/cost ratio? Only $1000 in property and equipment assets? The bulk of their assets are “intangible or goodwill assets” at 18M…
I don’t really understand what I’m looking at here and why it does make sense if that’s the case. Please someone enlighten me!
| 19 |
Yogurt_South
| 1,734,243,228 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1hemiqk/unusual_machines_post_ipo_financials_please/
|
1hb2ean
|
m1ds7w6
|
I've been following your watchlist since a while. It's a list for short term trading, but can you please clarify whether you're bullish or bearish on these names? What is short term for you - 3 months?
Specifically, my question is about ORCL and BA. I'm also thinking about these, to hold for 2-3 years.
| 12 |
Straight_Turnip7056
| 1,733,849,620 |
These are the stocks on my watchlist (12/10)
|
Hi! I am an ex-prop shop equity trader.
This is a daily watchlist for short-term trading: I might trade all/none of the stocks listed, and even stocks not listed! I only hold some/all MAG 7 stocks and market indices long-term. If you use Old Reddit, click “Show Images” at the top to expand the charts. Any positions stated aren’t recommendations, I’m following subreddit rules to disclose positions. I use IBKR TWS for my platform and charts.
I am targeting potentially good candidates for short-term trading; I have no opinion on them as investments. The potential of the stock moving today is what makes it interesting, everything else is secondary.
PLEASE ask specific questions and PLEASE don’t ask about earnings because I usually don’t take positions beforehand. Questions like “Thoughts on \_\_\_\_\_?” or “Why isn’t \_\_\_ on the watchlist?” or something answered already will be ignored unless you add detail and your opinion.
If you post a question and delete it after I answer it, I will block you- doing that hurts discussion. I am not answering questions if I’m still long or short a stock beyond what I update. Please avoid asking questions that can easily be Googled; our time is valuable.
**I have decided to stop posting my biases due to trolls.**
News: [Google Invests In Venture To Build Energy Parks For Data Centers](https://www.bloomberg.com/news/articles/2024-12-10/google-invests-in-venture-to-build-energy-parks-for-data-centers)
[**TSLA**](https://finviz.com/quote.ashx?t=TSLA&p=d) \- Broke the $400 level yesterday, TSLA Model Q is supposedly coming in first half of 2025.
[**NAMS**](https://finviz.com/quote.ashx?t=NAMS&p=d) \- Reveals Phase 3 Trial results for LDL Cholesterol reduction drug.
[**BA**](https://finviz.com/quote.ashx?t=BA&p=d) \- Stated it restarted 737 Max production last week.
[**AI**](https://finviz.com/quote.ashx?t=AI&p=d) \- EPS of -.06 vs -.13, revenue of $94.3M vs $91M expected. Stated it expects revenue growth to reaccelerate, but had mixed guidance.
[**ORCL**](https://finviz.com/quote.ashx?t=ORCL&p=d) \- Missed Estimates due to cloud competition and high expectations (overall mixed guidance)- EPS of 1.47 vs 1.48 expected, revenue of 14.06B vs 14.11B expected.
GOOG- Reveals new quantum chip.
Earnings: GME
| 50 |
WinningWatchlist
| 1,733,839,277 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1hb2ean/these_are_the_stocks_on_my_watchlist_1210/
|
1gm6ue1
|
lw0iaqz
|
Down 20k on lucid shares. Holding till it hits zero or the moon. No in between
| 49 |
30kSellingshampoo
| 1,731,033,775 |
Lucid Q3 results came in above estimates. Beating estimated EPS, revenue, and YOY EBITDA.
|
* EPS Actual is $-0.28 vs $-0.31 expected
* Revenue: $200M vs $196.3M expected
* Adjusted EBITDA $-613.1M better than $-634.4M of Q3 2023
* $5.16 billion in cash (excluding the \~1.75 billion raised in the recent public share offering)
* Current funds secure its capital into 2026
* Produced 1,805 vehicles in Q3; on track for annual production of approximately 9,000 vehicles
* Delivered 2,781 vehicles in Q3; up 90.9% compared to Q3 2023
* Lucid Gravity order starts today with production on track to begin later this year
* Rawlinson believes that the total addressable market for Gravity is six times that of Lucid Air
[https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results](https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results)
| 72 |
Progress_8
| 1,731,029,095 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1gm6ue1/lucid_q3_results_came_in_above_estimates_beating/
|
1gm6ue1
|
lw15lo5
|
This isn’t 2020, who the hell keeps investing in this company
You make a loss selling cars and now have to deal with a pro gas guzzler president, elected thanks to the market leader in North American EVs
| 12 |
Jerome_BRRR_Powell
| 1,731,042,516 |
Lucid Q3 results came in above estimates. Beating estimated EPS, revenue, and YOY EBITDA.
|
* EPS Actual is $-0.28 vs $-0.31 expected
* Revenue: $200M vs $196.3M expected
* Adjusted EBITDA $-613.1M better than $-634.4M of Q3 2023
* $5.16 billion in cash (excluding the \~1.75 billion raised in the recent public share offering)
* Current funds secure its capital into 2026
* Produced 1,805 vehicles in Q3; on track for annual production of approximately 9,000 vehicles
* Delivered 2,781 vehicles in Q3; up 90.9% compared to Q3 2023
* Lucid Gravity order starts today with production on track to begin later this year
* Rawlinson believes that the total addressable market for Gravity is six times that of Lucid Air
[https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results](https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results)
| 72 |
Progress_8
| 1,731,029,095 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1gm6ue1/lucid_q3_results_came_in_above_estimates_beating/
|
1gm6ue1
|
lw0dgfl
|
With Tesla lowering prices every quarter and squeezing competition out. Lucid has no shot of turning a profit. I think it’s a matter of when not if they go bankrupt
| 46 |
Drago_09
| 1,731,032,127 |
Lucid Q3 results came in above estimates. Beating estimated EPS, revenue, and YOY EBITDA.
|
* EPS Actual is $-0.28 vs $-0.31 expected
* Revenue: $200M vs $196.3M expected
* Adjusted EBITDA $-613.1M better than $-634.4M of Q3 2023
* $5.16 billion in cash (excluding the \~1.75 billion raised in the recent public share offering)
* Current funds secure its capital into 2026
* Produced 1,805 vehicles in Q3; on track for annual production of approximately 9,000 vehicles
* Delivered 2,781 vehicles in Q3; up 90.9% compared to Q3 2023
* Lucid Gravity order starts today with production on track to begin later this year
* Rawlinson believes that the total addressable market for Gravity is six times that of Lucid Air
[https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results](https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results)
| 72 |
Progress_8
| 1,731,029,095 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1gm6ue1/lucid_q3_results_came_in_above_estimates_beating/
|
1gm6ue1
|
lw1fj4v
|
Lucid's fundamentals are stronger than most realize. [Their liquidity position of $4.28 billion](https://beyondspx.com/article/lucid-group-pioneering-the-future-of-electric-mobility) gives them serious runway. The 90.9% YoY delivery growth shows real momentum.
The Gravity SUV launch is huge - SUVs dominate the luxury market. Their tech is legit too. The Air's 520-mile range blows away the competition. No other EV comes close.
But the cash burn needs to improve. That negative $613M EBITDA isn't sustainable long-term. They need to scale production fast to get unit costs down.
The PIF backing helps. Deep pockets matter in this capital-intensive industry. Most EV startups fail because they run out of cash before reaching scale. Lucid's got the resources to push through.
Not worried about the losses right now. Tesla lost money for years before becoming profitable. What matters is execution and Lucid's delivering on their targets.
| 6 |
Phoenixchess
| 1,731,047,352 |
Lucid Q3 results came in above estimates. Beating estimated EPS, revenue, and YOY EBITDA.
|
* EPS Actual is $-0.28 vs $-0.31 expected
* Revenue: $200M vs $196.3M expected
* Adjusted EBITDA $-613.1M better than $-634.4M of Q3 2023
* $5.16 billion in cash (excluding the \~1.75 billion raised in the recent public share offering)
* Current funds secure its capital into 2026
* Produced 1,805 vehicles in Q3; on track for annual production of approximately 9,000 vehicles
* Delivered 2,781 vehicles in Q3; up 90.9% compared to Q3 2023
* Lucid Gravity order starts today with production on track to begin later this year
* Rawlinson believes that the total addressable market for Gravity is six times that of Lucid Air
[https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results](https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results)
| 72 |
Progress_8
| 1,731,029,095 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1gm6ue1/lucid_q3_results_came_in_above_estimates_beating/
|
1gm6ue1
|
lw0fxj2
|
I own lucid shares. Gotta
hold it 20 years
| 6 |
Delicious-Topic-69
| 1,731,032,975 |
Lucid Q3 results came in above estimates. Beating estimated EPS, revenue, and YOY EBITDA.
|
* EPS Actual is $-0.28 vs $-0.31 expected
* Revenue: $200M vs $196.3M expected
* Adjusted EBITDA $-613.1M better than $-634.4M of Q3 2023
* $5.16 billion in cash (excluding the \~1.75 billion raised in the recent public share offering)
* Current funds secure its capital into 2026
* Produced 1,805 vehicles in Q3; on track for annual production of approximately 9,000 vehicles
* Delivered 2,781 vehicles in Q3; up 90.9% compared to Q3 2023
* Lucid Gravity order starts today with production on track to begin later this year
* Rawlinson believes that the total addressable market for Gravity is six times that of Lucid Air
[https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results](https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-third-quarter-2024-financial-results)
| 72 |
Progress_8
| 1,731,029,095 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1gm6ue1/lucid_q3_results_came_in_above_estimates_beating/
|
1ghwatj
|
lv1r16o
|
What’s Monday going to look like? Buy in or wait a little longer to buy?
| 9 |
stars1313
| 1,730,569,079 |
SoFi's current sentiments going into a very exciting week.
|
* This time is different; the sentiments for SoFi shifted to an all-time high with the stock price holding well (the curse is broken) after the best quarter performance in SoFi's history. Analysts' price Target Upgrades and an overall increase in Buy ratings over this past month despite a 40.46% increase in stock price in one month.
* CME FedWatch puts a 98.9% chance of a 25bp interest rate cut on Nov. 7th after the important PCE report and Job report this past week. SoFi's core lending business is poised to gain from rising demand for personal, student, and home loans with the lowering of Fed interest rates.
* There are 113K Options in the money as of Nov. 1st, yesterday equated to 11.3M shares. Which would significantly help lift the stock price for this coming week.
* The election this coming Tuesday would be significant for SoFi stockholders as the CEO stated which administration would be better for SoFi's business. Currently, there is an event contract for both candidates with different prices based on the odds (I am not going to be political and not going to post that amount but you can search it for your very own curiosity)
| 85 |
Progress_8
| 1,730,553,683 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1ghwatj/sofis_current_sentiments_going_into_a_very/
|
1ghwatj
|
lv0l2am
|
Banking typically follows the economy. You think they are cutting rates due to its strength?
| 25 |
BaggerVance_
| 1,730,555,107 |
SoFi's current sentiments going into a very exciting week.
|
* This time is different; the sentiments for SoFi shifted to an all-time high with the stock price holding well (the curse is broken) after the best quarter performance in SoFi's history. Analysts' price Target Upgrades and an overall increase in Buy ratings over this past month despite a 40.46% increase in stock price in one month.
* CME FedWatch puts a 98.9% chance of a 25bp interest rate cut on Nov. 7th after the important PCE report and Job report this past week. SoFi's core lending business is poised to gain from rising demand for personal, student, and home loans with the lowering of Fed interest rates.
* There are 113K Options in the money as of Nov. 1st, yesterday equated to 11.3M shares. Which would significantly help lift the stock price for this coming week.
* The election this coming Tuesday would be significant for SoFi stockholders as the CEO stated which administration would be better for SoFi's business. Currently, there is an event contract for both candidates with different prices based on the odds (I am not going to be political and not going to post that amount but you can search it for your very own curiosity)
| 85 |
Progress_8
| 1,730,553,683 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1ghwatj/sofis_current_sentiments_going_into_a_very/
|
1ghwatj
|
lv0j8b7
|
Yeah, it is a very exciting time bomb about to go off. 🧸🩳
| 12 |
OracleofStonks
| 1,730,554,398 |
SoFi's current sentiments going into a very exciting week.
|
* This time is different; the sentiments for SoFi shifted to an all-time high with the stock price holding well (the curse is broken) after the best quarter performance in SoFi's history. Analysts' price Target Upgrades and an overall increase in Buy ratings over this past month despite a 40.46% increase in stock price in one month.
* CME FedWatch puts a 98.9% chance of a 25bp interest rate cut on Nov. 7th after the important PCE report and Job report this past week. SoFi's core lending business is poised to gain from rising demand for personal, student, and home loans with the lowering of Fed interest rates.
* There are 113K Options in the money as of Nov. 1st, yesterday equated to 11.3M shares. Which would significantly help lift the stock price for this coming week.
* The election this coming Tuesday would be significant for SoFi stockholders as the CEO stated which administration would be better for SoFi's business. Currently, there is an event contract for both candidates with different prices based on the odds (I am not going to be political and not going to post that amount but you can search it for your very own curiosity)
| 85 |
Progress_8
| 1,730,553,683 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1ghwatj/sofis_current_sentiments_going_into_a_very/
|
1ghwatj
|
lv1tc2g
|
Very bullish on SOFI. The V recovery after ER was incredible and now formed extremely strong resistance at $11. Hard to see downside til next quarter with rates getting cut for near certainty.
| 15 |
DryPriority1552
| 1,730,569,792 |
SoFi's current sentiments going into a very exciting week.
|
* This time is different; the sentiments for SoFi shifted to an all-time high with the stock price holding well (the curse is broken) after the best quarter performance in SoFi's history. Analysts' price Target Upgrades and an overall increase in Buy ratings over this past month despite a 40.46% increase in stock price in one month.
* CME FedWatch puts a 98.9% chance of a 25bp interest rate cut on Nov. 7th after the important PCE report and Job report this past week. SoFi's core lending business is poised to gain from rising demand for personal, student, and home loans with the lowering of Fed interest rates.
* There are 113K Options in the money as of Nov. 1st, yesterday equated to 11.3M shares. Which would significantly help lift the stock price for this coming week.
* The election this coming Tuesday would be significant for SoFi stockholders as the CEO stated which administration would be better for SoFi's business. Currently, there is an event contract for both candidates with different prices based on the odds (I am not going to be political and not going to post that amount but you can search it for your very own curiosity)
| 85 |
Progress_8
| 1,730,553,683 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1ghwatj/sofis_current_sentiments_going_into_a_very/
|
1ghwatj
|
lv2oms6
|
SoFi CEO functioned like a sleeping dragon with concerns about regulation and rules of a bank so as not to exaggerate things (much more conservative compared to Tesla but likely has some to do with SoFi being a Fintech Bank). SoFi holds a lot of potential and won't show it until they are sure the bears can't criticize it. There are lots more to come. SoFi is now in the awakening dragon phase.
| 9 |
Progress_8
| 1,730,579,853 |
SoFi's current sentiments going into a very exciting week.
|
* This time is different; the sentiments for SoFi shifted to an all-time high with the stock price holding well (the curse is broken) after the best quarter performance in SoFi's history. Analysts' price Target Upgrades and an overall increase in Buy ratings over this past month despite a 40.46% increase in stock price in one month.
* CME FedWatch puts a 98.9% chance of a 25bp interest rate cut on Nov. 7th after the important PCE report and Job report this past week. SoFi's core lending business is poised to gain from rising demand for personal, student, and home loans with the lowering of Fed interest rates.
* There are 113K Options in the money as of Nov. 1st, yesterday equated to 11.3M shares. Which would significantly help lift the stock price for this coming week.
* The election this coming Tuesday would be significant for SoFi stockholders as the CEO stated which administration would be better for SoFi's business. Currently, there is an event contract for both candidates with different prices based on the odds (I am not going to be political and not going to post that amount but you can search it for your very own curiosity)
| 85 |
Progress_8
| 1,730,553,683 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1ghwatj/sofis_current_sentiments_going_into_a_very/
|
1ghwatj
|
lv0lcj6
|
I'm excited about SoFi long term but they are way overvalued right now.
| 8 |
averysmallbeing
| 1,730,555,214 |
SoFi's current sentiments going into a very exciting week.
|
* This time is different; the sentiments for SoFi shifted to an all-time high with the stock price holding well (the curse is broken) after the best quarter performance in SoFi's history. Analysts' price Target Upgrades and an overall increase in Buy ratings over this past month despite a 40.46% increase in stock price in one month.
* CME FedWatch puts a 98.9% chance of a 25bp interest rate cut on Nov. 7th after the important PCE report and Job report this past week. SoFi's core lending business is poised to gain from rising demand for personal, student, and home loans with the lowering of Fed interest rates.
* There are 113K Options in the money as of Nov. 1st, yesterday equated to 11.3M shares. Which would significantly help lift the stock price for this coming week.
* The election this coming Tuesday would be significant for SoFi stockholders as the CEO stated which administration would be better for SoFi's business. Currently, there is an event contract for both candidates with different prices based on the odds (I am not going to be political and not going to post that amount but you can search it for your very own curiosity)
| 85 |
Progress_8
| 1,730,553,683 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1ghwatj/sofis_current_sentiments_going_into_a_very/
|
1d9hx3f
|
l7dl0go
|
Would love to read your writeup on the super interesting GME conversation you had.
| 17 |
moonspeakdj
| 1,717,684,108 |
These are the stocks on my watchlist (6/6) (for real this time)
|
Hi! I am an ex-prop trader that trades equities.
This is a daily watchlist for trading.
I might trade all of the stocks on here, or none of them, on any given day. I might trade stocks that don't appear on here! I hold no positions in any stocks long-term but Amazon/Mag7/general broad market indices. (unless otherwise noted in these tickers). If you’re on old reddit, click “show images” at the top to see all the charts quickly.
I usually make these watchlists premarket, (or from 6:30 to 7 as time permits), but can be delayed if I'm trading the open. These aren't mean to be taken as gospel or any recommendation to buy/sell.
Many stocks I post are <$500M market cap. Most are NOT good long-term investments but are good candidates to day trade. If you have questions to ask, PLEASE ask specific ones. Questions like “Thoughts on \_\_\_\_\_? will be ignored unless you add detail to the question.
**News:** [**U.S. Clears Way for Antitrust Inquiries of Nvidia, Microsoft and OpenAI**](https://www.nytimes.com/2024/06/05/technology/nvidia-microsoft-openai-antitrust-doj-ftc.html)
**NVAX-** Company said it would be able to deliver a regulator-recommended vaccine against a strain of COVID-19 by September.
**NVDA-** Watching the 1250 level. Might move down today on news of antitrust inquires from the Justice Dept. and FTC.
**LULU-** Company raises full-year earnings guidance, $2.54 vs $2.38 EPS. Also authorized a $1B stock buyback.
**GME-** Interested in the $33 level today. Still short calls, will likely hedge if we get up higher and break that level. Had a super interesting conversation with a trader friend that I’ll write up when I have more time.
**FIVE-** Discount retailer, cut its sales forecast for the year. $.60 vs $.63 cents expected, net sales missed $812M vs $834.3M.
**Earnings today :** DOCU, IOT,MTN
**IPO today:** LIF (Location tracker for your kids)
| 43 |
WinningWatchlist
| 1,717,679,778 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1d9hx3f/these_are_the_stocks_on_my_watchlist_66_for_real/
|
1d9hx3f
|
l7ekz2t
|
JOIN THE CHOOCHOO TRAIN TO GME MOON. BACK TO BACK +20%
| 5 |
Dealer_Existing
| 1,717,696,071 |
These are the stocks on my watchlist (6/6) (for real this time)
|
Hi! I am an ex-prop trader that trades equities.
This is a daily watchlist for trading.
I might trade all of the stocks on here, or none of them, on any given day. I might trade stocks that don't appear on here! I hold no positions in any stocks long-term but Amazon/Mag7/general broad market indices. (unless otherwise noted in these tickers). If you’re on old reddit, click “show images” at the top to see all the charts quickly.
I usually make these watchlists premarket, (or from 6:30 to 7 as time permits), but can be delayed if I'm trading the open. These aren't mean to be taken as gospel or any recommendation to buy/sell.
Many stocks I post are <$500M market cap. Most are NOT good long-term investments but are good candidates to day trade. If you have questions to ask, PLEASE ask specific ones. Questions like “Thoughts on \_\_\_\_\_? will be ignored unless you add detail to the question.
**News:** [**U.S. Clears Way for Antitrust Inquiries of Nvidia, Microsoft and OpenAI**](https://www.nytimes.com/2024/06/05/technology/nvidia-microsoft-openai-antitrust-doj-ftc.html)
**NVAX-** Company said it would be able to deliver a regulator-recommended vaccine against a strain of COVID-19 by September.
**NVDA-** Watching the 1250 level. Might move down today on news of antitrust inquires from the Justice Dept. and FTC.
**LULU-** Company raises full-year earnings guidance, $2.54 vs $2.38 EPS. Also authorized a $1B stock buyback.
**GME-** Interested in the $33 level today. Still short calls, will likely hedge if we get up higher and break that level. Had a super interesting conversation with a trader friend that I’ll write up when I have more time.
**FIVE-** Discount retailer, cut its sales forecast for the year. $.60 vs $.63 cents expected, net sales missed $812M vs $834.3M.
**Earnings today :** DOCU, IOT,MTN
**IPO today:** LIF (Location tracker for your kids)
| 43 |
WinningWatchlist
| 1,717,679,778 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1d9hx3f/these_are_the_stocks_on_my_watchlist_66_for_real/
|
1b5st7x
|
kt7gup9
|
You also have to factor in the other SP 500 ETFs. IVV, VOO, and SPLG have almost $1 trillion under management.
Then you have numerous Index mutual funds. FXAIX has $373 billion SWPPX has $60 billion. VFIAX has $792 billion.
And it’s worth noting that IWM has $67 billion and VTWO has just $8.3 billion.
| 17 |
Encode_MVP
| 1,709,502,401 |
SMCI - My BEAR case
|
I have been hearing a lot of buzz around SMCI lately and there is a lot of chatter about it being put into the S&P at the next rebalance (snapshot date is this upcoming Friday, 08 March 2024 and implement date is the following Friday after close I believe.)
​
I am going to make my bear case for this stock by not looking at fundamentals at all and only using basic rebalance principles. Since the vast majority of Americans have their money passively flowing into these broad indices and not caring about the specific underlying stocks anyways, I think it is only fitting to remove fundamental company analysis entirely.
​
As it stands, SMCI is trading at $905.48 and has a market cap of $50.65 billion USD.
Currently, SMCI is trading in the Russell 2000 (RUT). It is the highest cap stock in the RUT by about 3x. This disparity is why I believe that joining the S&P 500 is a death sentence to the stock price, and the downwards pressure and volatility will happen extremely quickly once it is added. I will explain why.
The majority of investors nowadays invest their money passively through retirement accounts/401k's or just are told that their money is safer if you put it into ETFs. This results in a MASSIVE amount of inflow into a basket of stocks without much/any DD discerning the individual stocks in the basket. As for market cap weighted indices/ETFs, the percentage of that index is based on the market cap of the stock.
If I put $1,000 into the RUT, as it currently stands, $1.62 of that will be towards SMCI, while the next highest stock, MSTR, will receive $0.51. As SMCI increases in market cap, even more of the inflow into the RUT will get pumped passively into SMCI. This is a self-perpetuating cycle of inflow into the highest capped stock(s) in the index.
Now onto the S&P 500. I am going to compare SMCI to 3M, which has a market cap of $50.77 billion and is currently sitting in the S&P 500. 3M is weighted to 0.12% of the entire S&P, meaning it receives approximately 0.12% of the inflow. If SMCI enters into the S&P, I expect it to receive about the same, 0.12% inflow. Now looking at the daily volume of SPY (S&P ETF) vs IWM (RUT ETF), there is about 5.5x the flow of SPY vs. IWM, meaning SPY gets 5.5x more money going through it daily.
Doing some quick math off this, SMCI is currently sitting at an inflow of 1.62%(IWM) and will turn into 0.12%(SPY). Turning the units of SPY into IWM, we multiply the 0.12 by 5.5, so 0.12%(SPY)\*5.5(SPY)/(IWM) nets us 0.65%(IWM).
The ratio of inflow into SMCI immediately after it enters the S&P will be 0.65/1.62\*100 = 40% of what it is currently getting while outperforming in the RUT.
This tells me that the inflow into SMCI is going to take a 60% decline overnight as soon as it gets put into the S&P. Obviously there are other factors and the RUT is not the only ETF or fund trading SMCI right now, but the underlying argument still stands that the inflow is going to be GREATLY reduced instantaneously, likely causing a massive shock to the stock price.
This same calculation can be used on other over or underperforming stocks in their indices if they are set to jump from one index to another.
​
Feel free to argue me on this one if you disagree with me!
| 27 |
TheUltimator5
| 1,709,501,816 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1b5st7x/smci_my_bear_case/
|
1axkz6l
|
krosodh
|
I was going to be snarky and say, ‘I haven’t been this excited since General Electric spun off GEHC.’ But honestly GEHC hasn’t done badly. Maybe 3MHC isn’t such a bad idea.
‘Solventum,’ though. Ugh. Just call it 3MHC. We all know who you are.
| 46 |
ThanklessWaterHeater
| 1,708,646,641 |
3M Spinoff Company in the works set for April 1st.
|
3M Co.’s health care spinoff, Solventum Corp., will launch April 1.
More details emerged Wednesday with a public securities filing from the Maplewood-based manufacturer about the new company made up of what is currently 3M's health care businesses. Solventum will have more than 20,000 employees. As of now, Solventum will be based at 3M's headquarters in Maplewood.
3M (NYSE: MMM) notes in the filing that separating the two companies brings benefits, such as the ability to tailor their investment decisions to drive growth, allowing management to focus on strengthening core businesses, improving operational agility and better accessing capital by creating distinct investment profiles that appeal to different investors.
LINK: https://l.smartnews.com/p-jGucE/MapD5d
| 115 |
superbilliam
| 1,708,643,747 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1axkz6l/3m_spinoff_company_in_the_works_set_for_april_1st/
|
1axkz6l
|
kroq2ux
|
When I read the news, I initially thought they are looking for ways getting rid of their PFAS portfolio.
| 22 |
Grouchy_Violinist364
| 1,708,645,655 |
3M Spinoff Company in the works set for April 1st.
|
3M Co.’s health care spinoff, Solventum Corp., will launch April 1.
More details emerged Wednesday with a public securities filing from the Maplewood-based manufacturer about the new company made up of what is currently 3M's health care businesses. Solventum will have more than 20,000 employees. As of now, Solventum will be based at 3M's headquarters in Maplewood.
3M (NYSE: MMM) notes in the filing that separating the two companies brings benefits, such as the ability to tailor their investment decisions to drive growth, allowing management to focus on strengthening core businesses, improving operational agility and better accessing capital by creating distinct investment profiles that appeal to different investors.
LINK: https://l.smartnews.com/p-jGucE/MapD5d
| 115 |
superbilliam
| 1,708,643,747 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1axkz6l/3m_spinoff_company_in_the_works_set_for_april_1st/
|
1axkz6l
|
krp2qhh
|
Please let them say it has something to do with AI, so we can keep this bubble growing!
| 6 |
darthnugget
| 1,708,650,445 |
3M Spinoff Company in the works set for April 1st.
|
3M Co.’s health care spinoff, Solventum Corp., will launch April 1.
More details emerged Wednesday with a public securities filing from the Maplewood-based manufacturer about the new company made up of what is currently 3M's health care businesses. Solventum will have more than 20,000 employees. As of now, Solventum will be based at 3M's headquarters in Maplewood.
3M (NYSE: MMM) notes in the filing that separating the two companies brings benefits, such as the ability to tailor their investment decisions to drive growth, allowing management to focus on strengthening core businesses, improving operational agility and better accessing capital by creating distinct investment profiles that appeal to different investors.
LINK: https://l.smartnews.com/p-jGucE/MapD5d
| 115 |
superbilliam
| 1,708,643,747 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1axkz6l/3m_spinoff_company_in_the_works_set_for_april_1st/
|
1axkz6l
|
krpah96
|
any word yet how existing 3M stock will be split up between the 2 entities?
| 5 |
alias241
| 1,708,653,382 |
3M Spinoff Company in the works set for April 1st.
|
3M Co.’s health care spinoff, Solventum Corp., will launch April 1.
More details emerged Wednesday with a public securities filing from the Maplewood-based manufacturer about the new company made up of what is currently 3M's health care businesses. Solventum will have more than 20,000 employees. As of now, Solventum will be based at 3M's headquarters in Maplewood.
3M (NYSE: MMM) notes in the filing that separating the two companies brings benefits, such as the ability to tailor their investment decisions to drive growth, allowing management to focus on strengthening core businesses, improving operational agility and better accessing capital by creating distinct investment profiles that appeal to different investors.
LINK: https://l.smartnews.com/p-jGucE/MapD5d
| 115 |
superbilliam
| 1,708,643,747 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/1axkz6l/3m_spinoff_company_in_the_works_set_for_april_1st/
|
17fkx76
|
k6ak2bk
|
Forgot about NEE and RTX betting EPS with 7% up on both sides
| 8 |
kuvrterker
| 1,698,176,397 |
Summary of Oct 24 morning earnings
|
* SPOT Spotify ⬆️ up almost 9% as it reports a quarterly profit and hits 226M subscribers
* KO Coca-Cola ⬆️ up 3% after topping estimates and raising guidance
* VZ Verizon ⬆️ up 9% after earnings & subscriber growth top estimates
* GE ⬆️ up a 7% after profit beat & 'rapid growth' in aviation business
* MMM 3M ⬆️ up almost 6% after earnings beat, raising profit forecast
| 27 |
FaatmanSlim
| 1,698,175,348 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/17fkx76/summary_of_oct_24_morning_earnings/
|
17fkx76
|
k6b4zfl
|
but 5% interest rates are supposed to mean all businesses stop making money and can’t grow /s
| 7 |
waltwhitman83
| 1,698,183,810 |
Summary of Oct 24 morning earnings
|
* SPOT Spotify ⬆️ up almost 9% as it reports a quarterly profit and hits 226M subscribers
* KO Coca-Cola ⬆️ up 3% after topping estimates and raising guidance
* VZ Verizon ⬆️ up 9% after earnings & subscriber growth top estimates
* GE ⬆️ up a 7% after profit beat & 'rapid growth' in aviation business
* MMM 3M ⬆️ up almost 6% after earnings beat, raising profit forecast
| 27 |
FaatmanSlim
| 1,698,175,348 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/17fkx76/summary_of_oct_24_morning_earnings/
|
16pb52s
|
k1wdpew
|
Whatever you buy, buy half now and half in 3 months
| 10 |
Acrobatic-Poet-1913
| 1,695,500,040 |
What stocks do you like?
|
What stocks would you get?
I got a 25k bonus in the start of September. Right now I am maxing out my 401k and my Roth. I usually just buy Voo, Vti, little bit of Vt, Dividend stocks and etfs Like O, Vym, 3m, Ko, Vz, JnJ, Xom. I also have some Eth and 2 bitcoins lol.
So I'm curious if I should keep doing what I'm doing or also add in some individual stocks. I kind of like Nvidia, Amazon, Nucor, Ford, Delta, Sofi etc.
What would you get? What's your favorite stock? And any particular reason?
For context I am 35 and plan to hold for 20 to 40 years. I am not opposed to other investments like crypto or other stuff.
| 73 |
Severe-Spirit4547
| 1,695,391,327 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/16pb52s/what_stocks_do_you_like/
|
16pb52s
|
k1pueex
|
Depends on how many risk you're willing to take with single stocks. Personally I think Alphabet and ASML are well-positioned and fairly valued (not under, not over). But if you're willing to risk a bit more for a higher return, small-caps are way more interesting than large caps at the moment.
| 23 |
Cashencarlo
| 1,695,393,136 |
What stocks do you like?
|
What stocks would you get?
I got a 25k bonus in the start of September. Right now I am maxing out my 401k and my Roth. I usually just buy Voo, Vti, little bit of Vt, Dividend stocks and etfs Like O, Vym, 3m, Ko, Vz, JnJ, Xom. I also have some Eth and 2 bitcoins lol.
So I'm curious if I should keep doing what I'm doing or also add in some individual stocks. I kind of like Nvidia, Amazon, Nucor, Ford, Delta, Sofi etc.
What would you get? What's your favorite stock? And any particular reason?
For context I am 35 and plan to hold for 20 to 40 years. I am not opposed to other investments like crypto or other stuff.
| 73 |
Severe-Spirit4547
| 1,695,391,327 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/16pb52s/what_stocks_do_you_like/
|
16pb52s
|
k1q0fr3
|
Going to sound boring. But I’m supper bullish on apple and loading up. Im going against the trend of apple being the mega cap with the least growth opportunity and bleakest outlook. I totally disagree.
| 17 |
Existing-Arachnid347
| 1,695,395,338 |
What stocks do you like?
|
What stocks would you get?
I got a 25k bonus in the start of September. Right now I am maxing out my 401k and my Roth. I usually just buy Voo, Vti, little bit of Vt, Dividend stocks and etfs Like O, Vym, 3m, Ko, Vz, JnJ, Xom. I also have some Eth and 2 bitcoins lol.
So I'm curious if I should keep doing what I'm doing or also add in some individual stocks. I kind of like Nvidia, Amazon, Nucor, Ford, Delta, Sofi etc.
What would you get? What's your favorite stock? And any particular reason?
For context I am 35 and plan to hold for 20 to 40 years. I am not opposed to other investments like crypto or other stuff.
| 73 |
Severe-Spirit4547
| 1,695,391,327 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/16pb52s/what_stocks_do_you_like/
|
16pb52s
|
k1qcjeg
|
These are my stocks: AMK, DOCN, JD, EXPE, LRN, MTCH, PX.
I look for a combination of good financials and a growth story. In particular:
Asset management is a great business (AMK, PX). As the equity market itself expands, fees increase. As their advisors take on more clients, fees increase. And as the company acquires more advisors, fees increase. And all of these are multiplicative.
LRN and MTCH are dominant in their industry, which will have strong growth.
JD has a moat with its logistics and benefits from the growing middle class.
EXPE is good as it is, plus it has Vrbo. (Saying that out loud, might be my weakest thesis.)
DOCN is my favorite outside long shot. I got it cheap, and I've sold a lot of puts to try to get more for even cheaper. My thought here is the asymmetric play because they are a great target for an acquisition at their current market cap.
My stocks are almost the opposite of yours, style-wise. I have a lot of small cap growth, and you have a lot of large cap value.
I'm gonna annoy someone with this, but stay away from SOFI...
| 5 |
srand42
| 1,695,399,632 |
What stocks do you like?
|
What stocks would you get?
I got a 25k bonus in the start of September. Right now I am maxing out my 401k and my Roth. I usually just buy Voo, Vti, little bit of Vt, Dividend stocks and etfs Like O, Vym, 3m, Ko, Vz, JnJ, Xom. I also have some Eth and 2 bitcoins lol.
So I'm curious if I should keep doing what I'm doing or also add in some individual stocks. I kind of like Nvidia, Amazon, Nucor, Ford, Delta, Sofi etc.
What would you get? What's your favorite stock? And any particular reason?
For context I am 35 and plan to hold for 20 to 40 years. I am not opposed to other investments like crypto or other stuff.
| 73 |
Severe-Spirit4547
| 1,695,391,327 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/16pb52s/what_stocks_do_you_like/
|
16pb52s
|
k1psbg6
|
AMD, Pfizer for next 2-5 years. ETFs for longer than that.
| 8 |
dansdansy
| 1,695,392,362 |
What stocks do you like?
|
What stocks would you get?
I got a 25k bonus in the start of September. Right now I am maxing out my 401k and my Roth. I usually just buy Voo, Vti, little bit of Vt, Dividend stocks and etfs Like O, Vym, 3m, Ko, Vz, JnJ, Xom. I also have some Eth and 2 bitcoins lol.
So I'm curious if I should keep doing what I'm doing or also add in some individual stocks. I kind of like Nvidia, Amazon, Nucor, Ford, Delta, Sofi etc.
What would you get? What's your favorite stock? And any particular reason?
For context I am 35 and plan to hold for 20 to 40 years. I am not opposed to other investments like crypto or other stuff.
| 73 |
Severe-Spirit4547
| 1,695,391,327 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/16pb52s/what_stocks_do_you_like/
|
16odnok
|
k1k0bjn
|
3M products are all excellent. The products they make are some of the best. However I can compare the company to the tobacco companies. They have long term liabilities they will be dealing with for a long time. Not sure I would invest.
| 30 |
In28s
| 1,695,299,734 |
3m value trap or perfect buy in
|
So timing the market is impossible but I was going through one of my old watch lists from years ago and saw 3m.
Couple of things they owe lots of expensive debt and money, 3m as a company isn’t going anywhere but the question is will it recover to the $200 price range in the next decade. Very much reminds of me of intel, cisco and ibm, Texas Instruments.
Right now it gives 1.50 dividend per quarter which is pretty high for the type of stock it is, expecting a cut.
Couple of other things 9B in debt at 2027, there also the chemical law suit 10b and the ear plugs one 6b so potentially will the stock drop lower to the 50 range.
The company is an industry gaint, I have a feeling the activist investors might take interest soon, similar to crm which back fired my short position.
| 46 |
Ragepower529
| 1,695,296,588 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/16odnok/3m_value_trap_or_perfect_buy_in/
|
16odnok
|
k1ncax8
|
All the dividend stocks are going to have a real hard time with the bond market crashing. I'd wait another 6-12 months and see how its doing.
| 5 |
Tronbronson
| 1,695,344,162 |
3m value trap or perfect buy in
|
So timing the market is impossible but I was going through one of my old watch lists from years ago and saw 3m.
Couple of things they owe lots of expensive debt and money, 3m as a company isn’t going anywhere but the question is will it recover to the $200 price range in the next decade. Very much reminds of me of intel, cisco and ibm, Texas Instruments.
Right now it gives 1.50 dividend per quarter which is pretty high for the type of stock it is, expecting a cut.
Couple of other things 9B in debt at 2027, there also the chemical law suit 10b and the ear plugs one 6b so potentially will the stock drop lower to the 50 range.
The company is an industry gaint, I have a feeling the activist investors might take interest soon, similar to crm which back fired my short position.
| 46 |
Ragepower529
| 1,695,296,588 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/16odnok/3m_value_trap_or_perfect_buy_in/
|
16odnok
|
k1jylhr
|
You mention Intel, which is up 35% since october, and IBM, which is up 26% since october. CSCO - up 38% since October. The only one of your list that didn't beat the market is TXN.
Yeah these stocks have not done great in the long run... but it's pretty obvious, to me at least, that what matters is not "whether you buy" but "when you buy and/or how often you buy."
Will 3m recover to 200 in the next 10 years? There's no way to possibly know. Will 3m have periods where it drops 30% on news, market vol, or bad earnings and then recovers 43% in the subsequent months? Christ, that's *probably* much more likely.
| 12 |
eolithic_frustum
| 1,695,298,915 |
3m value trap or perfect buy in
|
So timing the market is impossible but I was going through one of my old watch lists from years ago and saw 3m.
Couple of things they owe lots of expensive debt and money, 3m as a company isn’t going anywhere but the question is will it recover to the $200 price range in the next decade. Very much reminds of me of intel, cisco and ibm, Texas Instruments.
Right now it gives 1.50 dividend per quarter which is pretty high for the type of stock it is, expecting a cut.
Couple of other things 9B in debt at 2027, there also the chemical law suit 10b and the ear plugs one 6b so potentially will the stock drop lower to the 50 range.
The company is an industry gaint, I have a feeling the activist investors might take interest soon, similar to crm which back fired my short position.
| 46 |
Ragepower529
| 1,695,296,588 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/16odnok/3m_value_trap_or_perfect_buy_in/
|
15nckuy
|
jvmlmu7
|
Own Sony and still think it’s undervalued. The reaction yesterday to the ER was absurd.
| 14 |
pdubbs87
| 1,691,695,407 |
Sony Q1 revenue up 33% YoY to ~$20.7B, PS5 sales up 38% YoY to 3.3M, raises sales forecasts for the full year + more good news for Sony
|
Here’s how Sony did in the June quarter versus Refinitiv consensus estimates:
* **Revenue:** 3 trillion Japanese yen ($20.7 billion) versus 2.46 trillion yen expected. That represents a 33% year-on-year rise.
* **Operating profit:** 253 billion Japanese yen versus 251.24 billion yen expected. That marks a 31% year-on-year fall.
Sony raised its **revenue forecast for the full year by 6% to 12.2 trillion yen**, thanks to strength in its PlayStation gaming unit.
Sony made a **7% upward revision to its sales forecast for games and network services to 4.2 trillion yen**.
Sony is so far winning the latest round of the console wars — by a substantial margin.
**Sony PlayStation FY23 Q1 Earnings**
* Net Sales: $4.91B +28% YoY Operating Income: $313.3m -7% YoY
* Shipped 3.3m PS5 (+0.9m YoY); 41.7m LTD
* Shipped 56.5m software, of which 6.6m 1P (+8.4m YoY, 1P sales flat)
**Xbox Q4**
* Xbox hardware -13%
* Content/services +5%
* Total gaming revenue +1%
**PlayStation Q1**
* PS hardware +35%
* Network Services +17%
* Total gaming revenue +33%
In other news, **Crunchyroll passed 12 million paying subscribers**
* Feb 2017: 1 million subs
* Oct 2018: 2 million subs
* July 2020: 3 million subs
* Feb 2021: 4 million subs
* Aug 2021: 5 million subs
* Feb 2023: 10 million subs
* May 2023: 11 million subs
* July 2023: 12 million subs
NCLT greenlights **Zee-Sony merger, paves way for $10 bn media giant creation** \- The order by NCLT's Mumbai bench will pave the way for the creation of the biggest in the country.
| 50 |
msaleem
| 1,691,674,155 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/15nckuy/sony_q1_revenue_up_33_yoy_to_207b_ps5_sales_up_38/
|
15nckuy
|
jvliem8
|
It is unfortunate that their other divisions are weighing their gaming division down.
| 9 |
WagonWheelsRX8
| 1,691,681,316 |
Sony Q1 revenue up 33% YoY to ~$20.7B, PS5 sales up 38% YoY to 3.3M, raises sales forecasts for the full year + more good news for Sony
|
Here’s how Sony did in the June quarter versus Refinitiv consensus estimates:
* **Revenue:** 3 trillion Japanese yen ($20.7 billion) versus 2.46 trillion yen expected. That represents a 33% year-on-year rise.
* **Operating profit:** 253 billion Japanese yen versus 251.24 billion yen expected. That marks a 31% year-on-year fall.
Sony raised its **revenue forecast for the full year by 6% to 12.2 trillion yen**, thanks to strength in its PlayStation gaming unit.
Sony made a **7% upward revision to its sales forecast for games and network services to 4.2 trillion yen**.
Sony is so far winning the latest round of the console wars — by a substantial margin.
**Sony PlayStation FY23 Q1 Earnings**
* Net Sales: $4.91B +28% YoY Operating Income: $313.3m -7% YoY
* Shipped 3.3m PS5 (+0.9m YoY); 41.7m LTD
* Shipped 56.5m software, of which 6.6m 1P (+8.4m YoY, 1P sales flat)
**Xbox Q4**
* Xbox hardware -13%
* Content/services +5%
* Total gaming revenue +1%
**PlayStation Q1**
* PS hardware +35%
* Network Services +17%
* Total gaming revenue +33%
In other news, **Crunchyroll passed 12 million paying subscribers**
* Feb 2017: 1 million subs
* Oct 2018: 2 million subs
* July 2020: 3 million subs
* Feb 2021: 4 million subs
* Aug 2021: 5 million subs
* Feb 2023: 10 million subs
* May 2023: 11 million subs
* July 2023: 12 million subs
NCLT greenlights **Zee-Sony merger, paves way for $10 bn media giant creation** \- The order by NCLT's Mumbai bench will pave the way for the creation of the biggest in the country.
| 50 |
msaleem
| 1,691,674,155 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/15nckuy/sony_q1_revenue_up_33_yoy_to_207b_ps5_sales_up_38/
|
15ezvef
|
jubvvo2
|
I like how each sector was listed with an ETF equivalent.
| 6 |
shortyafter
| 1,690,889,903 |
The 2023 stock market rally got a lot healthier in June and July
| ERROR: type should be string, got "https://finance.yahoo.com/news/the-2023-stock-market-rally-got-a-lot-healthier-in-june-and-july-210139678.html\n\nJuly has come and gone for investors, bringing with it a continuation and a new twist on the blistering stock market gains seen in the first half of this year.\n\nThe Tech sector (XLK), along with some of last year's biggest losers like Communication Services (XLC) and Consumer Discretionary (XLY), powered the market's rally through May.\n\nJuly has come and gone for investors, bringing with it a continuation and a new twist on the blistering stock market gains seen in the first half of this year.\n\nThe Tech sector (XLK), along with some of last year's biggest losers like Communication Services (XLC) and Consumer Discretionary (XLY), powered the market's rally through May.\n[Money doesn't grow on trees]\n\nBut over the last two months, one of the biggest concerns among market bears — that the rally had become too concentrated — has been addressed with all 11 sectors in the S&P 500 (^GSPC) logging gains between June and July.\n\nAnd while the aforementioned stars of this year's rally are still playing a leading role, a surge in oil prices has brought Energy (XLE) into the fold with cyclical sectors like Materials (XLB) and Industrials (XLI) also sitting on gains north of 14% since June as optimism about the economy abounds.\n\nThis has left all sectors with the exception of Health Care (XLV) and Utilities (XLU) sitting on year-to-date gains through July.\n\nCombine this broad strength with the bullish year-to-date seasonality stats we've been compiling and the final five months of the year have some powerful tailwinds. Notably, however, Tuesday brings us into August, which has been the weakest month of the year over the last 25 years.\n\n[**Broadening of the market.**](https://s.yimg.com/ny/api/res/1.2/Cj8RJI9cSQHXtbHDpHlEqQ--/YXBwaWQ9aGlnaGxhbmRlcjt3PTcwNQ--/https://s.yimg.com/os/creatr-uploaded-images/2023-07/134ad610-2fe2-11ee-bf6f-1ffefac75b64)\n\nIn the table above, we can see that the three leading sectors until May were those that house the so-called Magnificent Seven stocks, as well as the growthier names that tend to be less cyclical.\n\nThe Tech sector is home to much of the artificial intelligence trade, including Microsoft (MSFT) and Nvidia (NVDA). Apple (AAPL), which is up some 50% so far this year, is also a member of the Tech sector.\n\nAlphabet (GOOGL, GOOG), along with Meta Technologies (META), is a member of the Communication Services sector.\n\nAnd even with the rally broadening in recent months, we can see Tech is still doing a lot of the heavy lifting. It may not be a surprise, then, to learn that both Apple and Meta have been positive each month this year. (For Meta, the streak of monthly wins extends all the way back to November 2022.)\n\nThrough May, Amazon (AMZN) and other e-commerce plays were primarily responsible for boosting gains in the Consumer Discretionary sector.\n\nIn the two months since, brick and mortar stalwarts like Kohl's (KSS) and Nordstrom (JWN) have joined the rally, with each up over 50% since the end of May.\n\nCyclical names — whose fortunes vary more alongside the state of the economy — dominate the components of the Dow Jones Industrial Average (^DJI).\n\nAnd inside the index we can also see the game of catch-up taking place.\n\nThe latest returns from June to July are reflected on the x-axis in the chart below, while prior gains through May are expressed vertically on the y-axis.\n\nIndustrial giant Caterpillar (CAT) is alone at the right edge of the chart — up 29% the last two months after sinking 14% earlier this year. Caterpillar will report earnings on Tuesday.\n\n3M (MMM) and Boeing (BA) are also among top recent returns, while rounding out the top five are banking giant JPMorgan (JPM) and retail leader Home Depot (HD).\n\nAlso noteworthy are the few laggards that haven't mustered much the entire year and are camping out in the lower left of the chart.\n\nConsumer Staples (XLP) company Walgreens (WBA) happens to be dead last on the year-to-date list, down 20%. Telecom company Verizon (VZ) and pharmaceutical giant Merck (MRK) are also toward the bottom." | 31 |
putsRnotDaWae
| 1,690,857,488 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/15ezvef/the_2023_stock_market_rally_got_a_lot_healthier/
|
159gla5
|
jtf7o1z
|
Thanks for the summary. I like this. It was easy to read.
| 84 |
Atriev
| 1,690,311,950 |
Summary of earnings from Jul 25 morning
|
* ↔️ **Verizon (VZ)** beat expectations on strong subscriber growth, stock is flat +0.47%
* 🔻 **General Motors (GM)** revenue and earnings soar, but unveils cost cutting measures, stock is down -4%
* ⬆️ **3M (MMM)** beat earnings expectations, raises profit outlook / forecast, stock up +5%
* ⬆️ **General Eletric (GE)** crushes earnings and raises outlook, stock up +6%
* 🔻 **Spotify (SPOT)** has revenue miss and weak guidance despite price hike, stock down -14%
* 🔻**Alaska Airlines (ALK)** posts record quarterly revenue but weak revenue forecast, stock down -10% pulling other airline stocks down with it.
I have no positions in any of the above individual stocks.
| 214 |
FaatmanSlim
| 1,690,309,543 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/159gla5/summary_of_earnings_from_jul_25_morning/
|
159gla5
|
jtfei8m
|
Great work, very concise and much appreciated. This is a very palatable way to read information.
| 13 |
DribbleGodCheeser
| 1,690,314,517 |
Summary of earnings from Jul 25 morning
|
* ↔️ **Verizon (VZ)** beat expectations on strong subscriber growth, stock is flat +0.47%
* 🔻 **General Motors (GM)** revenue and earnings soar, but unveils cost cutting measures, stock is down -4%
* ⬆️ **3M (MMM)** beat earnings expectations, raises profit outlook / forecast, stock up +5%
* ⬆️ **General Eletric (GE)** crushes earnings and raises outlook, stock up +6%
* 🔻 **Spotify (SPOT)** has revenue miss and weak guidance despite price hike, stock down -14%
* 🔻**Alaska Airlines (ALK)** posts record quarterly revenue but weak revenue forecast, stock down -10% pulling other airline stocks down with it.
I have no positions in any of the above individual stocks.
| 214 |
FaatmanSlim
| 1,690,309,543 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/159gla5/summary_of_earnings_from_jul_25_morning/
|
13sbdgz
|
jlowwj8
|
I sold T when they cut the dividend years ago. I have never looked back. 3M I bought in Aug 22 and sold early part of the year. Free cash flow kept declining and I decided it wasn’t worth the risk.
| 30 |
Revfunky
| 1,685,104,413 |
Sell at&t and 3M?
|
Hello everyone.
I bought into T and 3M around the begging of COVID and stupidly didn't sell even with the looming problems of both companies.
My problem is I want to downsize my portfolio and inject that cash into vusa or split it between my other holdings.
Does anyone actually have any faith left in these companies or is it time to let go? I've tried to average down as much as I can but I don't see much light at the end of the tunnel for them.
| 38 |
AlexRazyy
| 1,685,102,764 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13sbdgz/sell_att_and_3m/
|
13sbdgz
|
jlq1shv
|
Bag holding both. I just keep holding for now...
| 7 |
Penecho987
| 1,685,121,376 |
Sell at&t and 3M?
|
Hello everyone.
I bought into T and 3M around the begging of COVID and stupidly didn't sell even with the looming problems of both companies.
My problem is I want to downsize my portfolio and inject that cash into vusa or split it between my other holdings.
Does anyone actually have any faith left in these companies or is it time to let go? I've tried to average down as much as I can but I don't see much light at the end of the tunnel for them.
| 38 |
AlexRazyy
| 1,685,102,764 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13sbdgz/sell_att_and_3m/
|
13sbdgz
|
jlq556n
|
I’m bullish on 3M, but it may move sideways for a couple of years until the litigation ends.
| 5 |
gottahavetegriry
| 1,685,122,741 |
Sell at&t and 3M?
|
Hello everyone.
I bought into T and 3M around the begging of COVID and stupidly didn't sell even with the looming problems of both companies.
My problem is I want to downsize my portfolio and inject that cash into vusa or split it between my other holdings.
Does anyone actually have any faith left in these companies or is it time to let go? I've tried to average down as much as I can but I don't see much light at the end of the tunnel for them.
| 38 |
AlexRazyy
| 1,685,102,764 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13sbdgz/sell_att_and_3m/
|
13sbdgz
|
jlovbod
|
for t wait for bounce up before dividend ex-date. don’t sell now when it is at the bottom. be a little brighter than the rest.
| 12 |
ij70
| 1,685,103,615 |
Sell at&t and 3M?
|
Hello everyone.
I bought into T and 3M around the begging of COVID and stupidly didn't sell even with the looming problems of both companies.
My problem is I want to downsize my portfolio and inject that cash into vusa or split it between my other holdings.
Does anyone actually have any faith left in these companies or is it time to let go? I've tried to average down as much as I can but I don't see much light at the end of the tunnel for them.
| 38 |
AlexRazyy
| 1,685,102,764 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13sbdgz/sell_att_and_3m/
|
13sbdgz
|
jloy8cx
|
3M is a tough one. Never-ending lawsuits. A great company that may go bankrupt because of all the lawsuits. And they keep losing them , they have some shitty lawyers.
| 20 |
john8a7a
| 1,685,105,066 |
Sell at&t and 3M?
|
Hello everyone.
I bought into T and 3M around the begging of COVID and stupidly didn't sell even with the looming problems of both companies.
My problem is I want to downsize my portfolio and inject that cash into vusa or split it between my other holdings.
Does anyone actually have any faith left in these companies or is it time to let go? I've tried to average down as much as I can but I don't see much light at the end of the tunnel for them.
| 38 |
AlexRazyy
| 1,685,102,764 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13sbdgz/sell_att_and_3m/
|
13sbdgz
|
jloyzk7
|
Depends how large your positions are. I have about $1000 in the 2 combined so I’m not losing sleep
| 7 |
el333
| 1,685,105,433 |
Sell at&t and 3M?
|
Hello everyone.
I bought into T and 3M around the begging of COVID and stupidly didn't sell even with the looming problems of both companies.
My problem is I want to downsize my portfolio and inject that cash into vusa or split it between my other holdings.
Does anyone actually have any faith left in these companies or is it time to let go? I've tried to average down as much as I can but I don't see much light at the end of the tunnel for them.
| 38 |
AlexRazyy
| 1,685,102,764 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13sbdgz/sell_att_and_3m/
|
13sbdgz
|
jlow5o2
|
I'd rather buy a stock going up than a stock going down
| 9 |
azwel
| 1,685,104,039 |
Sell at&t and 3M?
|
Hello everyone.
I bought into T and 3M around the begging of COVID and stupidly didn't sell even with the looming problems of both companies.
My problem is I want to downsize my portfolio and inject that cash into vusa or split it between my other holdings.
Does anyone actually have any faith left in these companies or is it time to let go? I've tried to average down as much as I can but I don't see much light at the end of the tunnel for them.
| 38 |
AlexRazyy
| 1,685,102,764 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13sbdgz/sell_att_and_3m/
|
13kvyir
|
jknjcug
|
.....you're not gonna post your model.....?
edit: also, your WACC calc looks *suuuuuuuuuuper* fucked up
| 9 |
Jeff__Skilling
| 1,684,427,256 |
Disney (DIS) DCF UPDATED.
|
# Introduction:
I did a DCF during Bob Chapek's reign and now during Bob Iger's reign, I think DIS is a lemon not because of how badly the company is ran but rather the industry that DIS is in. In this new DCF, I gave my opinion on certain arms of the business and even made assumptions that DIS will pivot fast enough into greener pastures. But even that didn't save the value of this company. Not to mention, this company utterly sucks at reporting their financials so a fair bit of simplifying assumptions had to be made. I've linked my old DCF if you'd like to read it but I'll tear apart why my old DCF was wrong in the end. Old DCF: ([SOURCE](https://www.reddit.com/r/stocks/comments/zvn7if/disneydis_dcf_analysis_need_advice_and_criticisms/?utm_source=share&utm_medium=web2x&context=3))
# REVENUE:
DMED (%REV)
The emphasis on DMED will eventually fade away, linear network seems to be phasing out in popularity as it’s mainly being held up by Gen X and Baby Boomers ([SOURCE](https://morningconsult.com/2023/03/28/linear-tv-viewership-gen-z-millennials/)), The average life expectancy is 72 years ([SOURCE](http://datatopics.worldbank.org/world-development-indicators)). So DIS will pivot away from Linear Network, as evident by management's heavy emphasis on DIS+ especially during conference calls. “About 50% of this demographic is expected to cut the cord by 2025” ([SOURCE](https://www.brid.tv/what-is-linear-tv/)). So I’m assuming it has a half life of about 3 years. But, given Linear Network contributes 25% of Revenue in FY22 it may not drop to a very large extent so I’m assuming it plateaus at about 23%.
DMED (Y/Y)
Given how volatile to changes DMED is for the duration of my forecast, I used a historic number when forecasting DMED. Believing that 2022’s Linear TV trend will continue.
DPEP (%REV)
DPEP will plateau at a level slightly below pre disney+ levels of 2017 and 2018, as Disney+ begins taking up larger portions of the revenue.
DPEP (Y/Y)
The largest 4 theme parks in the US and UK had an average CAGR of 4.93% for the last 10 years. (SOURCE). However, with the advent of more entertainment and more addictive kind e.g. Tiktok or VR, I’d say this trend is unlikely to continue for the next 10 years. The growth tend downwards.
DTC (%REV)
DTC will begin taking up a larger portion of its revenue as it takes over some of the role played by linear network and as DTC has a much wider reach than Linear Network e.g. Able to reach mobile phones instead of being fixed on television, very valuable in countries where television is expensive (See success of NFLX in APAC). DTC makes portions of Linear Network obsolete.
DTC (Y/Y)
Management has stated its goal is to make DTC profitable by end 2024, I project that it will reach this goal. I’ve done the calculation and DTC will maintain this pace in accordance with the pace that NFLX is growing at as well, given that the streaming industry is an oligopoly one.
REVENUE MODEL: \[[SOURCE](https://imgur.com/a/8Sx5AH3)\]
#
#
COST:
COST OF SERVICES
Most of disney services have variable costs e.g. Theme Parks having to expand more to take on higher capacity or DTC having to pay more for bandwidth as more customers subscribe, and DIS has to constantly maintain production in order to remain attractive for existing subscribers.
COST OF PRODUCTS
As DIS gets more popular, they produce more merchandise in bulk which could lead to economies of scale. So the cost of products falls over time.
SG&A
Utilities are a variable cost, whereas rent is a fixed cost so increasing capacity has higher marginal benefit. I’d argue that SG&A falls slightly over time as DIS approaches its capacity limits.
COST MODEL: \[[SOURCE](https://imgur.com/a/2lUUVLI)\]
# COST OF CAPITAL:
**COST OF DEBT**
RFR (3M Average) = 3.53%
Risk Spread = 1.62% (SOURCE, Bond Rating A-)
COD = 5.15%
Marginal Tax Rate = 21%
AT-COD = 4.0685%
**COST OF EQUITY**
Market Beta = 1.04 (SOURCE)
Market Price(3M Average) = $97.11
Shares O/S = 1823M
MV Equity = 177032M
4105.02 = \[4.58% x 4105.02\] x (1+5%) / (1+R) + (\[4.58% x 4105.02\] x (1+5%)) x (1+3.417%) / R - 3.417% / (1+R) \^2
R = 8.635%
RFR (US) = 3.417%
ERP = 5.218%
COE = 8.96%
**WEIGHTAGE**
(SOURCE) Thereafter taken to be 10 Years.
PV Operating Lease Liability = 3626M
For debt there was no debt breakdown so I took BV Debt as the best estimate of Liability.
Total Liability = 51995M
%Equity = 77.3%
%Liability = 22.7%
WACC = 7.85%
# Conclusion:
I've valued DIS at $69.38. With so much of their revenue in an outdated system, it's like a time bomb waiting to go off. What's worse is that most of DIS' cost are variable cost which means that they increase as o/p increases so margins are more or less fixed in place. It's hard for me to see how DIS could potentially dig themselves out of this. The plus side is that they are generating positive cash flow so hope is definitely there.
Now, my old DCF is inaccurate because I did not capitalize content acquisition costs so that did not accurately reflect the nature of content acquisition. In perpetuity, I'm assuming that D&A > CapEX which is impossible as you can't depreciate more than the par value of a PP&E. I've just done the math but for my terminal year to hold I need to earn a ROE of 522%, beyond ridiculous. Terminal Year Y/Y is at 8% which is significantly beyond TGR.
NEW DCF: \[[SOURCE](https://imgur.com/a/RUGDnwf)\]
| 48 |
Hanzoisbad
| 1,684,408,445 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13kvyir/disney_dis_dcf_updated/
|
13kvyir
|
jkmk0w4
|
great write up but, as you're aware, using the BV of debt undermines your final valuation.
| 10 |
speedyg54
| 1,684,412,662 |
Disney (DIS) DCF UPDATED.
|
# Introduction:
I did a DCF during Bob Chapek's reign and now during Bob Iger's reign, I think DIS is a lemon not because of how badly the company is ran but rather the industry that DIS is in. In this new DCF, I gave my opinion on certain arms of the business and even made assumptions that DIS will pivot fast enough into greener pastures. But even that didn't save the value of this company. Not to mention, this company utterly sucks at reporting their financials so a fair bit of simplifying assumptions had to be made. I've linked my old DCF if you'd like to read it but I'll tear apart why my old DCF was wrong in the end. Old DCF: ([SOURCE](https://www.reddit.com/r/stocks/comments/zvn7if/disneydis_dcf_analysis_need_advice_and_criticisms/?utm_source=share&utm_medium=web2x&context=3))
# REVENUE:
DMED (%REV)
The emphasis on DMED will eventually fade away, linear network seems to be phasing out in popularity as it’s mainly being held up by Gen X and Baby Boomers ([SOURCE](https://morningconsult.com/2023/03/28/linear-tv-viewership-gen-z-millennials/)), The average life expectancy is 72 years ([SOURCE](http://datatopics.worldbank.org/world-development-indicators)). So DIS will pivot away from Linear Network, as evident by management's heavy emphasis on DIS+ especially during conference calls. “About 50% of this demographic is expected to cut the cord by 2025” ([SOURCE](https://www.brid.tv/what-is-linear-tv/)). So I’m assuming it has a half life of about 3 years. But, given Linear Network contributes 25% of Revenue in FY22 it may not drop to a very large extent so I’m assuming it plateaus at about 23%.
DMED (Y/Y)
Given how volatile to changes DMED is for the duration of my forecast, I used a historic number when forecasting DMED. Believing that 2022’s Linear TV trend will continue.
DPEP (%REV)
DPEP will plateau at a level slightly below pre disney+ levels of 2017 and 2018, as Disney+ begins taking up larger portions of the revenue.
DPEP (Y/Y)
The largest 4 theme parks in the US and UK had an average CAGR of 4.93% for the last 10 years. (SOURCE). However, with the advent of more entertainment and more addictive kind e.g. Tiktok or VR, I’d say this trend is unlikely to continue for the next 10 years. The growth tend downwards.
DTC (%REV)
DTC will begin taking up a larger portion of its revenue as it takes over some of the role played by linear network and as DTC has a much wider reach than Linear Network e.g. Able to reach mobile phones instead of being fixed on television, very valuable in countries where television is expensive (See success of NFLX in APAC). DTC makes portions of Linear Network obsolete.
DTC (Y/Y)
Management has stated its goal is to make DTC profitable by end 2024, I project that it will reach this goal. I’ve done the calculation and DTC will maintain this pace in accordance with the pace that NFLX is growing at as well, given that the streaming industry is an oligopoly one.
REVENUE MODEL: \[[SOURCE](https://imgur.com/a/8Sx5AH3)\]
#
#
COST:
COST OF SERVICES
Most of disney services have variable costs e.g. Theme Parks having to expand more to take on higher capacity or DTC having to pay more for bandwidth as more customers subscribe, and DIS has to constantly maintain production in order to remain attractive for existing subscribers.
COST OF PRODUCTS
As DIS gets more popular, they produce more merchandise in bulk which could lead to economies of scale. So the cost of products falls over time.
SG&A
Utilities are a variable cost, whereas rent is a fixed cost so increasing capacity has higher marginal benefit. I’d argue that SG&A falls slightly over time as DIS approaches its capacity limits.
COST MODEL: \[[SOURCE](https://imgur.com/a/2lUUVLI)\]
# COST OF CAPITAL:
**COST OF DEBT**
RFR (3M Average) = 3.53%
Risk Spread = 1.62% (SOURCE, Bond Rating A-)
COD = 5.15%
Marginal Tax Rate = 21%
AT-COD = 4.0685%
**COST OF EQUITY**
Market Beta = 1.04 (SOURCE)
Market Price(3M Average) = $97.11
Shares O/S = 1823M
MV Equity = 177032M
4105.02 = \[4.58% x 4105.02\] x (1+5%) / (1+R) + (\[4.58% x 4105.02\] x (1+5%)) x (1+3.417%) / R - 3.417% / (1+R) \^2
R = 8.635%
RFR (US) = 3.417%
ERP = 5.218%
COE = 8.96%
**WEIGHTAGE**
(SOURCE) Thereafter taken to be 10 Years.
PV Operating Lease Liability = 3626M
For debt there was no debt breakdown so I took BV Debt as the best estimate of Liability.
Total Liability = 51995M
%Equity = 77.3%
%Liability = 22.7%
WACC = 7.85%
# Conclusion:
I've valued DIS at $69.38. With so much of their revenue in an outdated system, it's like a time bomb waiting to go off. What's worse is that most of DIS' cost are variable cost which means that they increase as o/p increases so margins are more or less fixed in place. It's hard for me to see how DIS could potentially dig themselves out of this. The plus side is that they are generating positive cash flow so hope is definitely there.
Now, my old DCF is inaccurate because I did not capitalize content acquisition costs so that did not accurately reflect the nature of content acquisition. In perpetuity, I'm assuming that D&A > CapEX which is impossible as you can't depreciate more than the par value of a PP&E. I've just done the math but for my terminal year to hold I need to earn a ROE of 522%, beyond ridiculous. Terminal Year Y/Y is at 8% which is significantly beyond TGR.
NEW DCF: \[[SOURCE](https://imgur.com/a/RUGDnwf)\]
| 48 |
Hanzoisbad
| 1,684,408,445 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/13kvyir/disney_dis_dcf_updated/
|
138q0z6
|
jiyxdmq
|
You can’t possibly simultaneously watch TikTok while watching a NFLX series, your attention can only be paid in one direction.
Gen Z: watching a series while playing a game while watching tiktok and youtube
You sure about that?
| 9 |
stiveooo
| 1,683,298,500 |
Netflix (NFLX) DCF Analysis.
|
# INTRODUCTION:
NFLX has come a long way since being rejected by blockbuster, its secret formula being the first to embrace change. It embraced DVD at a time where VHS was still the dominant mode of display. It embraced Streaming when the world started catching onto DVD. NFLX's edge was that it always pivoted quickly to the next big thing. But NFLX’s massive progress may soon grind to a halt. From lackluster solutions to strong competitors and pure market saturation, NFLX has a tough road ahead.
**INVESTMENT THESIS 1:**
*Overblown Growth Solutions*
When NFLX lost subscribers for the first time in 10 years, people freaked out and started selling off NFLX. But it seems that when NFLX announced its plans and after 1 successful quarter with some results from Ad-Tier NFLX bounced back up almost doubling from when it first dropped due to the shock.
Ad-Tier has some parallels to pirated sites. Both stream contents with Ads injected into the mix, either before the video plays or on the side of the screen. The main difference is that one is free and the other costs $6.99/month.
There are only so many people in the world that wants a YouTube equivalent as their streaming platform. The people who purchase Ad-Tier are usually “seasonal” fans, those that purchase cheaply so that they can watch their favorite series and unsubscribe afterwards. These subscribers have no longevity to them and temporarily bump up NFLX’s numbers.
Paid-sharing, getting people to get off shared accounts and getting their own accounts. Depending on how NFLX goes about it paid sharing could be a game changer for NFLX. There is already an existing customer base from those that are sharing account, they show a liking for NFLX but whether these customers will convert is dependent on certain factors Effectiveness of Paid-Sharing, ‘FOMO’ factor and Piracy.
Effectiveness of Paid-Sharing,
Is the net cast wide enough to catch all the paid-sharing users? What are the ways we go about catching Paid-Sharing?
‘FOMO’ factor,
Just how much are customers missing out will determine how they weigh the cost of monthly subscription and the ability to participate in the latest series.
Piracy,
Is it easy to find alternatives that can provide what NFLX provides for free?
**INVESTMENT THESIS 2:**
*Strong Competitors & Lack of C.A.*
The usual suspects obviously include DIS, Hulu and AMZN prime. But, what about the less obvious ones?
TikTok & Instagram reels. There’s only so much entertainment needed in one’s life. You can’t possibly simultaneously watch TikTok while watching a NFLX series, your attention can only be paid in one direction. ([SOURCE](https://www.marketingdive.com/news/tiktok-netflix-gen-z-video-broadcast-app/634594/#:~:text=TikTok%20has%20jumped%20over%20Netflix,the%20sixth%20most%20popular%20service))
Or AMZN with an all-inclusive ride on their AMZN prime with AMZN prime offering other benefits on their online retail store. They are “Offer-Stacking” creating an unbeatable offer that NFLX can’t counter.
DIS has a large vault of already created storyline that they have archived yet to be released onto Disney+ and the familiarity of DIS’ brand name enhanced by their theme park creates a very strong branding fit for the entire family that NFLX can’t parallel. ([SOURCE](https://www.statista.com/statistics/294111/leading-organizations-in-licensed-merchandise-worldwide/))
NFLX has no differentiator other than it was the earliest entrant and is now the largest entrant. There are certain exclusive content on NFLX that may make it appealing, but these kinds of advantages are superficial and over the long run, these exclusive content may offer their rights to stream to competitors or may be pirated.
**INVESTMENT THESIS 3:**
*Market Saturation*
NFLX can only grow so much.
UCAN from FY21-22 only added 0.7M subscribers and LATAM added 3M. LATAM’s market was already said to be 75% penetrated by NFLX ([SOURCE](https://labsnews.com/en/articles/technology/netflix-streaming-leader-latin-america-future/)).
NFLX should focus on making its subscribers more valuable which management has said it will focus on now, but it has only so far laid out plans to attract new subscribers.
Even if Linear Network loses most of its grounds in the next 10 years, NFLX may not gain much subscribers from Linear Network simply because Linear Network is mainly supported by the exact demographic that would not be on NFLX.
# REVENUE:
***Model***
I’ve used a bottoms-up approach when modelling my revenue and forecasted using historical data and surveys done.
***Revenue/Subscriber***
NFLX applies third degree price discrimination in how it prices subscriptions/month for different regions. Regions where it has already established a presence and where NFLX integrated into their daily life, NFLX charges a higher subscription/month.
But I don’t think every region will eventually tend towards the UCAN cost. Certain regions may see subscription services as a luxury good.
Overall, with the implementation and wide rollout of the Ad Tier I project my average revenue/customer to be higher for every region as the Ad Tier generates higher revenue per subscriber monthly, according to management.
According to 2021 US Bureau of Labor Statistics, an American with Annual income of $78,743 and expenditure of $66,928 spent 0.97% of that amount in entertainment and of that 0.97% only 18% goes towards “Fees and admissions” so about 0.17% of $66,928 went towards NFLX. $654 represented the annual spending on subscription services + others. NFLX takes up 30% of this, most households have more than 1 subscription. So, NFLX is probably tethering at the limit at which it can raise prices.
Comparing the cost per month of subscription between NFLX and its closest competitor DIS, Disney+ cost $4.80 compared to NFLX $15.86.
So, I forecast that the majority of increase in Revenue/Subscriber for the US will come from wider adoption of Ad-Tier subscription which yields a higher amount of Revenue/Subscriber rather than NFLX increasing prices.
European subscription is one of the highest cost to subscribe ([SOURCE](https://beebom.com/how-much-netflix-costs-each-country-worldwide/)) so, I'd say its unlikely EMEA will raise monthly subscription cost but rather EMEA is the region with the highest likelihood to group subscribe to lower subscription cost. So EMEA is more likely to add subscribers than revenue/subscriber.
**OVERALL, I assume that the full effects of FOMO for Ad-Tier will only show up from 2025 onwards.**
***No. of Subscriber***
For Paid Sharing,
NFLX has stated that the potential market could be up to 100+M households. I do also believe that convincing people who were previously sharing accounts of purchasing their own account may take some time to catch on, as they will have large FOMO after being locked out of their old account and missing the latest shows. And since NFLX only intends on fully releasing Paid Sharing from 23Q2 onwards, I believe the substantial addition to subscribers will only show up from 2025 onwards with the FOMO effect in full and Paid Sharing being rolled out entirely.
For fall of Linear Network,
([SOURCE](https://morningconsult.com/2023/03/28/linear-tv-viewership-gen-z-millennials/))
Almost 40% of Linear Network supporters are baby boomers. As the baby boomers age and decrease in numbers Linear Network will start losing its main customers, freeing up market share for NFLX to take as the younger generations start being associated with Streaming services, streaming will become the new norm.
BUT, this cultural change will be one that takes time. It will not show up to a substantial amount in the time period of my forecast. So I opt for more granularity.
**REVENUE MODEL: \[**[INSERT](https://imgur.com/a/9c2expe)\]
# MARGINS:
The difficulty in figuring out margins is that there is no reliable historic data within the past 5 years. Margins were always extremely skewed by extreme conditions.
E.g. from 2019 to 2020 margins jumped from 12% to 18% due to covid accelerating the adoption of NFLX.
OR in 2021 the marginal cost of acquiring content wrt to revenue being generated was the cheapest of the past 7 years at $0.5836 per $1 of revenue generated. Likely because people were embracing NFLX as tech adoption was accelerated prior year, margins peaking only a year later.
So, cost is broken down into 3 categories (Acquisition, Marketing and (Tech & Dev + G&A)). Tech & Dev + G&A are lumped together for more granularity instead of inaccurate forecasts.
***Acquisition***
As NFLX transitions into subscriber retention mode rather than attracting subscribers it inevitably will spend more on making its services more attractive so that existing customers will face a higher “emotional” switching cost, so churn rate is lowered. But acquisition will continue to take the largest portion of cost.
***Marketing***
Eventually the NFLX brand becomes more well-known or integrated into people’s daily life that they spend less on marketing themselves and more on advertising new content. Marketing costs will start to tend downwards. BUT there must always be a baseline amount of marketing cost to advertise new content.
***Tech & Dev + G&A***
Tech & Dev + G&A is likely to remain elevated for the first few years as NFLX starts to roll out Ad-Tier and begin supporting a substantial amount of new subscribers from Ad-Tier. But eventually as the number of new subscribers dwindles down, NFLX gets more efficient and needs fewer employees. It will also implement new tech features e.g. AI tech support to lower the number of employees necessary. So at that point Tech & Dev + G&A will tend downwards.
**COST MODEL: \[**[INSERT](https://imgur.com/a/yX54W9I)**\]**
# COST OF CAPITAL:
***Cost of Debt***
RFR (3M Average) = 3.53%
Risk Spread (3M Average) = 1.71% ([SOURCE](https://fred.stlouisfed.org/series/BAMLC0A4CBBB))
Cost of Debt = 5.24%
***Timing of Debt***
\[[TABLE](https://imgur.com/a/CoSEpe2)\]
Weighted Average Timing of Debt = 1.57 Years.
MV Debt = 19225M
***Cost of Equity***
Market Beta = 1.27 ([SOURCE](https://finance.yahoo.com/quote/NFLX?p=NFLX))
Market Price(3M Average) = $341.52
Shares O/S = 445M
MV Equity = 151976M
4105.02 = \[4.58% x 4105.02\] x (1+5%) / (1+R) + (\[4.58% x 4105.02\] x (1+5%)) x (1+3.417%) / R - 3.417% / (1+R) \^2
R = 8.635%
RFR (US) = 3.417%
ERP = 5.218%
COE = 10.16%
***Weightage***
% Equity = 88.8%
%Debt = 11.2%
***WACC***
Corporate marginal Tax Rate = 21%
WACC = 9.49%
# CONCLUSION:
Ultimately, I’ve valued NFLX at $174.62, I just don’t believe in how astronomical growth could be, with all the changes that NFLX has introduced into the company. I believe that NFLX has set their priorities wrongly and are focusing on the wrong things, Subscriber growth shouldn’t be the focus it should be making our subscribers more profitable. It’s a good sign that they started caring and innovating again. But at the current trajectory I just don’t see it working out.
DCF: \[[INSERT](https://imgur.com/a/pCyLgNV)\]
| 21 |
Hanzoisbad
| 1,683,297,671 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/138q0z6/netflix_nflx_dcf_analysis/
|
12bm0d5
|
jexf6wi
|
No idea how the market will react on the Thursday and Friday reports.if even McDonald's is laying off workers, is it gonna be bad? (not that recent layoffs are gonna be in the report just yet)
| 10 |
thecuteturtle
| 1,680,621,887 |
stocks dip after JOLTS report below 10m jobs, first time since May 2021
|
[source](https://www.bloomberg.com/news/articles/2023-04-03/stock-market-today-dow-s-p-live-updates)
I think it's exaggerated reaction, although it is only a small reaction major indexes are around 0.5% loss, but the trajectory is downward, so we might see larger losses for today, also volatility is rising.
9.9m job openings is still a lot of jobs.
At 3.8% unemployment and [the civilian labor force](https://www.bls.gov/news.release/empsit.t01.htm) is 166m, so that means 6.3m ppl looking for work and 3.9m excess job openings (BLS actually says that only 5.1m want a job meaning 4.8m excess job openings which is even better).
| 26 |
provoko
| 1,680,621,046 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/12bm0d5/stocks_dip_after_jolts_report_below_10m_jobs/
|
117ibgr
|
j9cfvme
|
Good old Zynga. Best known for stealing ideas, barely tweaking it, and creating it under their brand (Mafia Wars). And then they somehow goof their games despite having a solid user base (Mafia Wars). I'm definitely not bitter about how Zynga runs their games. Especially Mafia Wars.
Good write up by the way
| 26 |
BoredPoopless
| 1,676,931,508 |
TakeTwo stock analysis and valuation - How Zynga distorts the financials
|
This post is a summary of my analysis of Take-Two (Ticker symbol: $TTWO). I hope you enjoy reading it and feel free to add your take and agree/disagree with what's mentioned below.
​
The article is divided into the following sections:
* Introduction & Fundamental analysis of the business.
* Historical financial performance
* The Zynga acquisition
* The balance sheet
* Assumptions & valuation
* Valuation based on assumptions different than mine
​
**Introduction & Fundamental analysis of the business**
Take-Two is a video game company that grows primarily through acquisitions. It owns well-positioned, well-known IPs, such as Grand Theft Auto, Red Dead Redemption, NBA 2K, Civilization, Mafia, Max Payne, and many more.
In 2022, the company acquired Zynga, a company that owned a significant number of top mobile games, which fits well into Take-Two's portfolio.
Obviously, one of the big risks that come with every gaming company is, what if the next sequel of a popular game disappoints? What if the next Civilization isn't a big hit, what if the next Grand Theft Auto fails to meet the expectations of the gamers? Although Take-Two isn't immune to this risk, owning a large number of popular games allows them to diversify this risk to a large extent. If we take a look at Activision for example, a giant in the industry, the conclusion would be different as 3 of the franchises (Call of Duty, World of Warcraft, and Candy Crush) bring roughly 3/4 of the total revenue.
​
**Historical financial performance**
Before we move into the financials, it is important to note that the fiscal year of Take-two ends on March 31st. Hence, the fiscal year 2022 starts on April 1st, 2021, and ends on March 31st, 2022.
At the moment of this writing, the last publicly available report is as of December 31st, 2022, so LTM (last twelve months) is referring to the calendar year 2022.
The company's revenue grew 16% CAGR over the last 5 years, and a significant portion of this is coming from acquisitions. As Zynga was acquired in 2022, the full effect of its revenue isn't reflected in the financials yet. Its revenues for the LTM were $4,8 billion.
The gross margin has improved over the last 5 years from 43% to slightly over 50%. However, if we take all the operating expenses into account (Sales & Marketing, General & Administrative, Research & Development as well as Depreciation and amortization), it seems as if something is going wrong.
The operating margin was fluctuating between 8 and 19%, until the Zynga acquisition. Suddenly, the profitability is down to roughly 0%. To better understand this, we need to look into the Zynga acquisition.
​
**The Zynga acquisition**
The consideration for this acquisition was $9,5 billion:
\- 46.3m shares of Take-Two ($5,4 billion)
\- Cash ($4 billion)
\- Equity awards ($0,1 billion)
​
The expected outcome of this acquisition by the management is as follows:
1. Revenue synergies of over $500m
2. Cost synergies of over $100m in the first 2 years
3. 14% revenue growth in the next 3 years
​
When there's an acquisition, the acquiring company doesn't just take over what's on the balance sheet of the acquiree. Instead, there's an entire valuation and purchase price allocation process that takes place.
Let me elaborate: The accounting standards have very strict rules for recognizing (capitalizing) internally generated intangible assets (such as brands, trade names, etc.). The main reason is, if this is allowed, most companies would do that, which means instead of recognizing an expense, the capital used would be on the balance sheet (amortized over time), and the profitability of the business would be overstated, and would not reflect the actual performance.
However, when an acquisition happens, that's when the intangible assets that have been generated in the past are valued and recognized.
Because of this acquisition, Take-Two recognized intangible assets of $5,5 billion, in addition to the goodwill of $6.2 billion.
What this means is, all of these intangible assets (excl. the goodwill) will now be amortized and part of Take-Two's income statement, decreasing its operating profit by $700m per year and is the explanation for the significant decrease in the operating margin. However, this is a non-cash expense. Take-two has already paid for this in the past, so from a cash point of view, it doesn't exist.
Let's take a look at how Take-Two (with and without Zynga) compares to the key competitors:
​
|Company|Gross margin|S&M expenses|G&A expenses|R&D expenses|Total operating expenses|Operating margin|
|:-|:-|:-|:-|:-|:-|:-|
|Take-Two|55%|15%|15%|10%|40%|15%|
|Zynga|64%|34%|7%|20%|61%|3%|
|Take-Two (/w Zynga)|56%|23%|18%|15%|56%|0%|
|Activision|71%|14%|10%|15%|39%|32%|
|Nintendo|55%|7%|7%|6%|20%|35%|
|EA Sports|74%|13%|11%|30%|54%|20%|
The explanation above also helps understand why Take-Two with Zynga has significantly worse margins than the two companies separately.
**The balance sheet**
Looking at the financial position, Take-Two has a fairly stable cash position of over $800m, but it rarely holds a significant amount of excess cash. After the acquisition of Zynga, the intangible assets make up roughly 3/4 of the entire balance sheet.
On the other side of the balance sheet, the company has a low level of debt ($1,7 billion, including leases) and it doesn't seem to be interested in increasing its financial leverage significantly.
​
**Assumptions & Valuation**
​
To value Take-two, there are two main inputs required: Revenue growth over time & Operating margin. Here are my assumptions:
**Revenue growth:** 25% in year 1 (mainly driven by the Zynga acquisition), followed by 8% until year 5 and a decrease to 3.5% by year 10, this represents revenue growth of 114% in the next decade.
**Operating margin:** 16% for the next year, improving to 18% over time as synergies kick in.
**Discount rate (WACC-based)**: 7.78% increasing to 8.02% by year 10 (approaching a beta of 1, vs. the beta of 0.9 today)
Here's the outcome: The company's value is **$14.5b ($86/share).**
**Valuation based on assumptions different than mine**
If you have different assumptions regarding the revenue 10 years from now, as well as the operating margin, I hope the table below helps in valuing Take-two as a whole.
|Revenue / Op. margin|14%|18%|22%|26%|
|:-|:-|:-|:-|:-|
|100% ($9,7b)|$52.0|$79.6|$105.8|$128.0|
|114% ($10,3b)|$56.6|$86.2|$114.2|$137.9|
|150% ($12,1b)|$64.9|$98.9|$131.2|$159.0|
|200% ($14,5b)|$76.2|$116.1|$154.4|$187.6|
As with any other company, there is a wide range of outcomes. Personally, I think the company is doing well and I'd love to own shares sometime in the future, but not at today's price.
If Take-two increases its margins significantly and moves closer to Activision/Nintendo, the company could be undervalued at today's price.
One important topic to mention is GTA6 as it is a game anticipated for quite a long period of time. Although its (lack of) success will have an impact on Take-two as a company, it is important to acknowledge that it is not the only game that's a cash cow, but it does represent a risk/opportunity in the short and medium-term.
| 80 |
k_ristovski
| 1,676,921,918 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/117ibgr/taketwo_stock_analysis_and_valuation_how_zynga/
|
117ibgr
|
j9cr7wx
|
Projecting a constant growth rate is not a good way to value TTWO because it is a hit driven business. Go look at the historical revenue charts surrounding the release of GTA5 and RDR3. There are large discontinuities in the first 2 quarters after each major release and a jump up in the base of recurring Rev + profits after each of these hit games came out. Acquiring Zynga will mute this effect somewhat, but it would not be surprising for annual revenue to double in the year GTA6 releases and the recurring revenue stream should be elevated if it is successful.
| 8 |
TheHiveMindSpeaketh
| 1,676,936,247 |
TakeTwo stock analysis and valuation - How Zynga distorts the financials
|
This post is a summary of my analysis of Take-Two (Ticker symbol: $TTWO). I hope you enjoy reading it and feel free to add your take and agree/disagree with what's mentioned below.
​
The article is divided into the following sections:
* Introduction & Fundamental analysis of the business.
* Historical financial performance
* The Zynga acquisition
* The balance sheet
* Assumptions & valuation
* Valuation based on assumptions different than mine
​
**Introduction & Fundamental analysis of the business**
Take-Two is a video game company that grows primarily through acquisitions. It owns well-positioned, well-known IPs, such as Grand Theft Auto, Red Dead Redemption, NBA 2K, Civilization, Mafia, Max Payne, and many more.
In 2022, the company acquired Zynga, a company that owned a significant number of top mobile games, which fits well into Take-Two's portfolio.
Obviously, one of the big risks that come with every gaming company is, what if the next sequel of a popular game disappoints? What if the next Civilization isn't a big hit, what if the next Grand Theft Auto fails to meet the expectations of the gamers? Although Take-Two isn't immune to this risk, owning a large number of popular games allows them to diversify this risk to a large extent. If we take a look at Activision for example, a giant in the industry, the conclusion would be different as 3 of the franchises (Call of Duty, World of Warcraft, and Candy Crush) bring roughly 3/4 of the total revenue.
​
**Historical financial performance**
Before we move into the financials, it is important to note that the fiscal year of Take-two ends on March 31st. Hence, the fiscal year 2022 starts on April 1st, 2021, and ends on March 31st, 2022.
At the moment of this writing, the last publicly available report is as of December 31st, 2022, so LTM (last twelve months) is referring to the calendar year 2022.
The company's revenue grew 16% CAGR over the last 5 years, and a significant portion of this is coming from acquisitions. As Zynga was acquired in 2022, the full effect of its revenue isn't reflected in the financials yet. Its revenues for the LTM were $4,8 billion.
The gross margin has improved over the last 5 years from 43% to slightly over 50%. However, if we take all the operating expenses into account (Sales & Marketing, General & Administrative, Research & Development as well as Depreciation and amortization), it seems as if something is going wrong.
The operating margin was fluctuating between 8 and 19%, until the Zynga acquisition. Suddenly, the profitability is down to roughly 0%. To better understand this, we need to look into the Zynga acquisition.
​
**The Zynga acquisition**
The consideration for this acquisition was $9,5 billion:
\- 46.3m shares of Take-Two ($5,4 billion)
\- Cash ($4 billion)
\- Equity awards ($0,1 billion)
​
The expected outcome of this acquisition by the management is as follows:
1. Revenue synergies of over $500m
2. Cost synergies of over $100m in the first 2 years
3. 14% revenue growth in the next 3 years
​
When there's an acquisition, the acquiring company doesn't just take over what's on the balance sheet of the acquiree. Instead, there's an entire valuation and purchase price allocation process that takes place.
Let me elaborate: The accounting standards have very strict rules for recognizing (capitalizing) internally generated intangible assets (such as brands, trade names, etc.). The main reason is, if this is allowed, most companies would do that, which means instead of recognizing an expense, the capital used would be on the balance sheet (amortized over time), and the profitability of the business would be overstated, and would not reflect the actual performance.
However, when an acquisition happens, that's when the intangible assets that have been generated in the past are valued and recognized.
Because of this acquisition, Take-Two recognized intangible assets of $5,5 billion, in addition to the goodwill of $6.2 billion.
What this means is, all of these intangible assets (excl. the goodwill) will now be amortized and part of Take-Two's income statement, decreasing its operating profit by $700m per year and is the explanation for the significant decrease in the operating margin. However, this is a non-cash expense. Take-two has already paid for this in the past, so from a cash point of view, it doesn't exist.
Let's take a look at how Take-Two (with and without Zynga) compares to the key competitors:
​
|Company|Gross margin|S&M expenses|G&A expenses|R&D expenses|Total operating expenses|Operating margin|
|:-|:-|:-|:-|:-|:-|:-|
|Take-Two|55%|15%|15%|10%|40%|15%|
|Zynga|64%|34%|7%|20%|61%|3%|
|Take-Two (/w Zynga)|56%|23%|18%|15%|56%|0%|
|Activision|71%|14%|10%|15%|39%|32%|
|Nintendo|55%|7%|7%|6%|20%|35%|
|EA Sports|74%|13%|11%|30%|54%|20%|
The explanation above also helps understand why Take-Two with Zynga has significantly worse margins than the two companies separately.
**The balance sheet**
Looking at the financial position, Take-Two has a fairly stable cash position of over $800m, but it rarely holds a significant amount of excess cash. After the acquisition of Zynga, the intangible assets make up roughly 3/4 of the entire balance sheet.
On the other side of the balance sheet, the company has a low level of debt ($1,7 billion, including leases) and it doesn't seem to be interested in increasing its financial leverage significantly.
​
**Assumptions & Valuation**
​
To value Take-two, there are two main inputs required: Revenue growth over time & Operating margin. Here are my assumptions:
**Revenue growth:** 25% in year 1 (mainly driven by the Zynga acquisition), followed by 8% until year 5 and a decrease to 3.5% by year 10, this represents revenue growth of 114% in the next decade.
**Operating margin:** 16% for the next year, improving to 18% over time as synergies kick in.
**Discount rate (WACC-based)**: 7.78% increasing to 8.02% by year 10 (approaching a beta of 1, vs. the beta of 0.9 today)
Here's the outcome: The company's value is **$14.5b ($86/share).**
**Valuation based on assumptions different than mine**
If you have different assumptions regarding the revenue 10 years from now, as well as the operating margin, I hope the table below helps in valuing Take-two as a whole.
|Revenue / Op. margin|14%|18%|22%|26%|
|:-|:-|:-|:-|:-|
|100% ($9,7b)|$52.0|$79.6|$105.8|$128.0|
|114% ($10,3b)|$56.6|$86.2|$114.2|$137.9|
|150% ($12,1b)|$64.9|$98.9|$131.2|$159.0|
|200% ($14,5b)|$76.2|$116.1|$154.4|$187.6|
As with any other company, there is a wide range of outcomes. Personally, I think the company is doing well and I'd love to own shares sometime in the future, but not at today's price.
If Take-two increases its margins significantly and moves closer to Activision/Nintendo, the company could be undervalued at today's price.
One important topic to mention is GTA6 as it is a game anticipated for quite a long period of time. Although its (lack of) success will have an impact on Take-two as a company, it is important to acknowledge that it is not the only game that's a cash cow, but it does represent a risk/opportunity in the short and medium-term.
| 80 |
k_ristovski
| 1,676,921,918 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/117ibgr/taketwo_stock_analysis_and_valuation_how_zynga/
|
10sfmoz
|
j715gfr
|
This should serve to illustrate that people shouldn’t trust the answers it gives. At a cursory scan, it whiffed on PE criteria.
| 62 |
BetweenCoffeeNSleep
| 1,675,415,780 |
ChatGPT investment portfolio
|
I asked ChatGPT to suggest an investment portfolio based on the criteria described below.
I am curious how well you guys think ChatGPT did. I am planning to invest a small amount of my fun money and see how it goes.
I took the criteria from a book summary video. I can provide a link to it if people are interested.
​
**Criteria:**
1. Conservatively financed, current ratio of at least 150%.
2. Dividend should have been paid in the last year.
3. No earnings deficit in the last 5 years.
4. Annually earnings growth >0% in the last 5 years.
5. Market cap is less then 1.2x all liabilities.
6. P/E < 15.
**Response:**
1. Johnson & Johnson (JNJ)
2. Procter & Gamble (PG)
3. Coca-Cola Co. (KO)
4. Walmart (WMT)
5. PepsiCo (PEP)
6. Microsoft (MSFT)
7. AT&T (T)
8. Verizon Communications (VZ)
9. 3M (MMM)
10. Walmart (WMT)
​
**Exact prompt was as follow:**
suggest an investing portfolio of 5 to 10 companies that best fit the following criteria: 1. Conservatively financed, current ratio of at least 150%. 2. dividend should have been paid in the last year. 3. no earnings deficit in the last 5 years. 4. annually earnings growth >0% in the last 5 years. 5. market cap is less then 1.2x all liabilities. 6. P/E < 15.
​
**Full response:**
Here are a few companies that meet your criteria:
1. Johnson & Johnson (JNJ)
2. Procter & Gamble (PG)
3. Coca-Cola Co. (KO)
4. Walmart (WMT)
5. PepsiCo (PEP)
6. Microsoft (MSFT)
7. AT&T (T)
8. Verizon Communications (VZ)
9. 3M (MMM)
10. Walmart (WMT)
Please note that these are not specific recommendations to buy these stocks and it's important to do your own research and consult a financial advisor before making any investment decisions. These companies were selected based on publicly available information and their meeting of the criteria listed, but other factors such as industry conditions and overall economic trends may also impact their performance.
| 27 |
intothefray22
| 1,675,414,152 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/10sfmoz/chatgpt_investment_portfolio/
|
10sfmoz
|
j72qwhs
|
this is a huge mistake. gpt-3 was trained at the end of 2021. you're running on very out of date info.
| 22 |
dmead
| 1,675,445,499 |
ChatGPT investment portfolio
|
I asked ChatGPT to suggest an investment portfolio based on the criteria described below.
I am curious how well you guys think ChatGPT did. I am planning to invest a small amount of my fun money and see how it goes.
I took the criteria from a book summary video. I can provide a link to it if people are interested.
​
**Criteria:**
1. Conservatively financed, current ratio of at least 150%.
2. Dividend should have been paid in the last year.
3. No earnings deficit in the last 5 years.
4. Annually earnings growth >0% in the last 5 years.
5. Market cap is less then 1.2x all liabilities.
6. P/E < 15.
**Response:**
1. Johnson & Johnson (JNJ)
2. Procter & Gamble (PG)
3. Coca-Cola Co. (KO)
4. Walmart (WMT)
5. PepsiCo (PEP)
6. Microsoft (MSFT)
7. AT&T (T)
8. Verizon Communications (VZ)
9. 3M (MMM)
10. Walmart (WMT)
​
**Exact prompt was as follow:**
suggest an investing portfolio of 5 to 10 companies that best fit the following criteria: 1. Conservatively financed, current ratio of at least 150%. 2. dividend should have been paid in the last year. 3. no earnings deficit in the last 5 years. 4. annually earnings growth >0% in the last 5 years. 5. market cap is less then 1.2x all liabilities. 6. P/E < 15.
​
**Full response:**
Here are a few companies that meet your criteria:
1. Johnson & Johnson (JNJ)
2. Procter & Gamble (PG)
3. Coca-Cola Co. (KO)
4. Walmart (WMT)
5. PepsiCo (PEP)
6. Microsoft (MSFT)
7. AT&T (T)
8. Verizon Communications (VZ)
9. 3M (MMM)
10. Walmart (WMT)
Please note that these are not specific recommendations to buy these stocks and it's important to do your own research and consult a financial advisor before making any investment decisions. These companies were selected based on publicly available information and their meeting of the criteria listed, but other factors such as industry conditions and overall economic trends may also impact their performance.
| 27 |
intothefray22
| 1,675,414,152 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/10sfmoz/chatgpt_investment_portfolio/
|
10k4ddf
|
j5oacqe
|
Looks like a pretty bad earnings report. I was considering adding 3M to my dividend portfolio but between the scandals and lackluster earnings I’m glad I didn’t
| 103 |
Didntlikedefaultname
| 1,674,563,874 |
3M Shares Drop After Q4 EPS Miss As Macro Headwinds Weigh; Downsizes Manufacturing Roles
|
* 3M Co (NYSE:MMM) reported fourth-quarter FY22 sales of $8.08 billion, a decline of 6% year-over-year, beating the consensus of $8.04 billion.
* Organic sales grew 0.4%, which included a 2.6% headwind from the combined impact of China's COVID-related lockdowns and decline in disposable respirator demand.
* Adjusted EPS of $2.28 missed the consensus of $2.36.
* Adjusted operating margin fell by 90 bps to 19.1%. Adjusted free cash flow grew 3% Y/Y to $1.7 billion.
* Chair and CEO Mike Roman said, "The slower-than-expected growth was due to rapid declines in consumer-facing markets - a dynamic that accelerated in December - along with significant slowing in China due to COVID-related disruptions. As demand weakened, we adjusted manufacturing output and controlled costs, which enabled us to improve inventory levels."
* "We expect macroeconomic challenges to persist in 2023," Roman continued. "Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders. Based on what we see in our end markets, we will reduce approximately 2,500 global manufacturing roles - a necessary decision to align with adjusted production volumes."
* In December 2022, 3M shared plans to exit per- and polyfluoroalkyl substance (PFAS) manufacturing by the end of 2025.
* Related: 3M Plans To Exit PFAS Manufacturing By 2025 End; Expects Up To $2.3B In Charges
FY23 Outlook: 3M sees -6 to -2 percent adjusted total sales growth and -3 percent to flat adjusted organic sales growth.
* The company expects adjusted EPS of $8.50 - $9.00 versus 2022 of $9.88 on a comparable basis.
* Price Action: MMM shares are trading lower by 3.04% at $118.89 in the premarket on the last check Tuesday.
| 269 |
danisfermi
| 1,674,563,388 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/10k4ddf/3m_shares_drop_after_q4_eps_miss_as_macro/
|
10k4ddf
|
j5otqj2
|
I bought this company around a year before the lawsuits. Hasn't served me well.
| 29 |
jesperbj
| 1,674,573,105 |
3M Shares Drop After Q4 EPS Miss As Macro Headwinds Weigh; Downsizes Manufacturing Roles
|
* 3M Co (NYSE:MMM) reported fourth-quarter FY22 sales of $8.08 billion, a decline of 6% year-over-year, beating the consensus of $8.04 billion.
* Organic sales grew 0.4%, which included a 2.6% headwind from the combined impact of China's COVID-related lockdowns and decline in disposable respirator demand.
* Adjusted EPS of $2.28 missed the consensus of $2.36.
* Adjusted operating margin fell by 90 bps to 19.1%. Adjusted free cash flow grew 3% Y/Y to $1.7 billion.
* Chair and CEO Mike Roman said, "The slower-than-expected growth was due to rapid declines in consumer-facing markets - a dynamic that accelerated in December - along with significant slowing in China due to COVID-related disruptions. As demand weakened, we adjusted manufacturing output and controlled costs, which enabled us to improve inventory levels."
* "We expect macroeconomic challenges to persist in 2023," Roman continued. "Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders. Based on what we see in our end markets, we will reduce approximately 2,500 global manufacturing roles - a necessary decision to align with adjusted production volumes."
* In December 2022, 3M shared plans to exit per- and polyfluoroalkyl substance (PFAS) manufacturing by the end of 2025.
* Related: 3M Plans To Exit PFAS Manufacturing By 2025 End; Expects Up To $2.3B In Charges
FY23 Outlook: 3M sees -6 to -2 percent adjusted total sales growth and -3 percent to flat adjusted organic sales growth.
* The company expects adjusted EPS of $8.50 - $9.00 versus 2022 of $9.88 on a comparable basis.
* Price Action: MMM shares are trading lower by 3.04% at $118.89 in the premarket on the last check Tuesday.
| 269 |
danisfermi
| 1,674,563,388 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/10k4ddf/3m_shares_drop_after_q4_eps_miss_as_macro/
|
10k4ddf
|
j5opvn2
|
Their management is horrendous. I should have bailed this summer but I held out hopes that they could manage supply issues that were obvious since 2020. At this point I’m in for 10 years instead of 5
| 21 |
SevrenMMA
| 1,674,571,509 |
3M Shares Drop After Q4 EPS Miss As Macro Headwinds Weigh; Downsizes Manufacturing Roles
|
* 3M Co (NYSE:MMM) reported fourth-quarter FY22 sales of $8.08 billion, a decline of 6% year-over-year, beating the consensus of $8.04 billion.
* Organic sales grew 0.4%, which included a 2.6% headwind from the combined impact of China's COVID-related lockdowns and decline in disposable respirator demand.
* Adjusted EPS of $2.28 missed the consensus of $2.36.
* Adjusted operating margin fell by 90 bps to 19.1%. Adjusted free cash flow grew 3% Y/Y to $1.7 billion.
* Chair and CEO Mike Roman said, "The slower-than-expected growth was due to rapid declines in consumer-facing markets - a dynamic that accelerated in December - along with significant slowing in China due to COVID-related disruptions. As demand weakened, we adjusted manufacturing output and controlled costs, which enabled us to improve inventory levels."
* "We expect macroeconomic challenges to persist in 2023," Roman continued. "Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders. Based on what we see in our end markets, we will reduce approximately 2,500 global manufacturing roles - a necessary decision to align with adjusted production volumes."
* In December 2022, 3M shared plans to exit per- and polyfluoroalkyl substance (PFAS) manufacturing by the end of 2025.
* Related: 3M Plans To Exit PFAS Manufacturing By 2025 End; Expects Up To $2.3B In Charges
FY23 Outlook: 3M sees -6 to -2 percent adjusted total sales growth and -3 percent to flat adjusted organic sales growth.
* The company expects adjusted EPS of $8.50 - $9.00 versus 2022 of $9.88 on a comparable basis.
* Price Action: MMM shares are trading lower by 3.04% at $118.89 in the premarket on the last check Tuesday.
| 269 |
danisfermi
| 1,674,563,388 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/10k4ddf/3m_shares_drop_after_q4_eps_miss_as_macro/
|
10k4ddf
|
j5on0ek
|
The drop is a great opportunity to buy more if you are in it for the long term.
| 9 |
gamers542
| 1,674,570,269 |
3M Shares Drop After Q4 EPS Miss As Macro Headwinds Weigh; Downsizes Manufacturing Roles
|
* 3M Co (NYSE:MMM) reported fourth-quarter FY22 sales of $8.08 billion, a decline of 6% year-over-year, beating the consensus of $8.04 billion.
* Organic sales grew 0.4%, which included a 2.6% headwind from the combined impact of China's COVID-related lockdowns and decline in disposable respirator demand.
* Adjusted EPS of $2.28 missed the consensus of $2.36.
* Adjusted operating margin fell by 90 bps to 19.1%. Adjusted free cash flow grew 3% Y/Y to $1.7 billion.
* Chair and CEO Mike Roman said, "The slower-than-expected growth was due to rapid declines in consumer-facing markets - a dynamic that accelerated in December - along with significant slowing in China due to COVID-related disruptions. As demand weakened, we adjusted manufacturing output and controlled costs, which enabled us to improve inventory levels."
* "We expect macroeconomic challenges to persist in 2023," Roman continued. "Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders. Based on what we see in our end markets, we will reduce approximately 2,500 global manufacturing roles - a necessary decision to align with adjusted production volumes."
* In December 2022, 3M shared plans to exit per- and polyfluoroalkyl substance (PFAS) manufacturing by the end of 2025.
* Related: 3M Plans To Exit PFAS Manufacturing By 2025 End; Expects Up To $2.3B In Charges
FY23 Outlook: 3M sees -6 to -2 percent adjusted total sales growth and -3 percent to flat adjusted organic sales growth.
* The company expects adjusted EPS of $8.50 - $9.00 versus 2022 of $9.88 on a comparable basis.
* Price Action: MMM shares are trading lower by 3.04% at $118.89 in the premarket on the last check Tuesday.
| 269 |
danisfermi
| 1,674,563,388 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/10k4ddf/3m_shares_drop_after_q4_eps_miss_as_macro/
|
zqnb45
|
j0yth54
|
What happened with that lawsuit?
The military ear bud thing?
I was sorta waiting till that passed.
| 16 |
Gangmbrtheta
| 1,671,540,304 |
Thoughts on 3M?
|
I have been building out an ira portfolio and adding strong dividend yield stocks with modest to solid upside. I schd and add to it incrementally but I also put some money into individual positions. I am looking at adding 3M. It has a nearly 5% yield and a pretty modest 10P/E. They bring in roughly $35B a year and have a $65B market cap. Earnings historically look pretty strong. But what spooks me is the stock performance since 2018. It looks undervalued to me but clearly the market feels otherwise.
Anyone else watching 3M, own it, or avoid it?
| 13 |
Didntlikedefaultname
| 1,671,539,709 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/zqnb45/thoughts_on_3m/
|
zqnb45
|
j0yvs8u
|
they had at least two scandals. one was the military ear plugs. the latest one was dumping toxic materials, i think in netherlands.
| 12 |
ij70
| 1,671,541,675 |
Thoughts on 3M?
|
I have been building out an ira portfolio and adding strong dividend yield stocks with modest to solid upside. I schd and add to it incrementally but I also put some money into individual positions. I am looking at adding 3M. It has a nearly 5% yield and a pretty modest 10P/E. They bring in roughly $35B a year and have a $65B market cap. Earnings historically look pretty strong. But what spooks me is the stock performance since 2018. It looks undervalued to me but clearly the market feels otherwise.
Anyone else watching 3M, own it, or avoid it?
| 13 |
Didntlikedefaultname
| 1,671,539,709 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/zqnb45/thoughts_on_3m/
|
zqnb45
|
j0z4wh7
|
I used to drive through Brookings, South Dakota occasionally. You always knew when the 3m plant was making scotch tape because the entire town would smell like scotch tape. One of my buddies lived there and referred to them as “tape days”
| 11 |
SnooChocolates6859
| 1,671,546,336 |
Thoughts on 3M?
|
I have been building out an ira portfolio and adding strong dividend yield stocks with modest to solid upside. I schd and add to it incrementally but I also put some money into individual positions. I am looking at adding 3M. It has a nearly 5% yield and a pretty modest 10P/E. They bring in roughly $35B a year and have a $65B market cap. Earnings historically look pretty strong. But what spooks me is the stock performance since 2018. It looks undervalued to me but clearly the market feels otherwise.
Anyone else watching 3M, own it, or avoid it?
| 13 |
Didntlikedefaultname
| 1,671,539,709 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/zqnb45/thoughts_on_3m/
|
zqnb45
|
j0yyfmk
|
Great company, great dividends. Some fuck ups happened in the past but they will come and go and mmm will still be around.
| 6 |
rhythmdev
| 1,671,543,141 |
Thoughts on 3M?
|
I have been building out an ira portfolio and adding strong dividend yield stocks with modest to solid upside. I schd and add to it incrementally but I also put some money into individual positions. I am looking at adding 3M. It has a nearly 5% yield and a pretty modest 10P/E. They bring in roughly $35B a year and have a $65B market cap. Earnings historically look pretty strong. But what spooks me is the stock performance since 2018. It looks undervalued to me but clearly the market feels otherwise.
Anyone else watching 3M, own it, or avoid it?
| 13 |
Didntlikedefaultname
| 1,671,539,709 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/zqnb45/thoughts_on_3m/
|
yjvye2
|
iuqg0iy
|
Ford used to offer employee pricing to shareholders with 100 shares but unfortunately ended it this year.
| 139 |
Cardboardcubbie
| 1,667,374,850 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iuqm6ui
|
Carnival cruise will give you a discount if you own 100 shares or at least did as of a couple years ago. Not sure who else has offers like this. I would be incentivized to own shares a few companies if I found out they offered some perks
| 34 |
Beachlean
| 1,667,380,460 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iuqfpf6
|
Would work in the 70s when you held stock for a while.
With trading today, must be a bookkeeping nightmare
| 108 |
one8e4
| 1,667,374,575 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iur7yvb
|
Because people are investing for money compounding, not gift bags. So i rather for them pay dividend, buy their shares, pay a debt, or just reinvest their left over money to themselves. Then you can sell the stock yourself and buy what you want.
| 15 |
senrim
| 1,667,394,702 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iuq43vs
|
What benefit would that have for the company?
| 59 |
lufecaep
| 1,667,365,237 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iurfbvr
|
Because companies don’t care about you as a person. Any expenditure on gifts for shareholders is an expenditure that isn’t potentially increasing share price. Ask yourself as an investor what would you want more, a useless gift or an increased ROI?
| 18 |
trailbooty
| 1,667,398,045 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iur4iw1
|
If you hold one share of Lindt&Sprüngli you get a box of chocolate. But one share is 94k CHF
| 8 |
Tmek25
| 1,667,392,988 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iuqo12c
|
Netflix has no idea you’re a shareholder. They only see your introducing broker. You think they should send your broker a truckload of trinkets to distribute out to individual book entries?
| 8 |
twarr1
| 1,667,382,066 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iuq5ahf
|
Why? Gift boxes aren't gonna entice me to buy stock. If I can afford 100 shares of NFLX I really don't care about saving $100 a year on subscription fees.
| 28 |
IdealNeuroChemistry
| 1,667,366,070 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iuqs31z
|
Is this a troll? Shareholders want to feel special?
| 15 |
MyRedditHandle2021
| 1,667,385,302 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
yjvye2
|
iuq7p26
|
I think some cruise lines like carnival give some kind of perk with a discount on cruises or something. I would bet they still make money if someone does it though so it's really just marketing. To me that makes sense. Netflix discount doesn't, since most would already be subscribed.
| 5 |
SpeakerClassic4418
| 1,667,367,829 |
Why aren’t more companies give retail shareholders perks?
|
I know 3M gives giftboxes, but wonder why wouldn’t Netflix gives subscription discount for say, someone who has 100 shares or more Netflix? Is this more of a tracking / verification issue or more of a SEC regulatory issue? It seems like a no brainer for companies to do this to make their share holder feel special.
Edit: Okay, so I've read a few things about why the heck a company should consider this, so hear me out.
First of all, employees are humans and they have emotions, companies give all sort of perks, t-shirts, special discounts to employees, and they also give shares to employees, to keep them motivated, feel part of a group and community and retained in the company, and hopefully they perform and deliver increase in your share prices. And if they don't, the employee doesn't directly get punished, they could be still earning a high salary, keeping the perks but the investor suffer. META is a clear example of this.
Retail investors are human beings, they have feelings, and when they support a stock they want to feel special, feel part of a community as well, so gestures that make investor, especially those who has a bigger shares or have been holding shares for a long period feels special doesn't need to cost a lot of money, but can positively affect the investor relationship, images for the company, boosting sentiment, and that goes back to the employees who's taking RSUs, so it's a win win.
My thoughts is more of a regulatory concerns, but then I looked up an found GME is basically already doing this so it's not really a concern, more of just a investor relationship strategy, and dealing with retail simply won't scale, but for big big stake holders, inviting them to investor conference and pay for their drinks and meal is probably more common than not.
| 172 |
bwang29
| 1,667,365,029 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/yjvye2/why_arent_more_companies_give_retail_shareholders/
|
y8kzjr
|
it0pmlu
|
We’re pre-imminent, I thought we were already in post-imminent recession right now.
| 976 |
SatisfyingSerenity
| 1,666,231,764 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it0oxup
|
We are already in a recession this past imminent
| 677 |
Rich_Foamy_Flan
| 1,666,231,465 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it13d2h
|
A recession only lasts 18 months according to Google so June 2023 is when it will be over. Your welcome.
| 68 |
ThePennyDropper
| 1,666,238,651 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it0rfle
|
I think we can all agree that 2023 is going to be pretty bad. War, inflation, and all around uncertainty.
| 245 |
spartikle
| 1,666,232,581 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it1cpor
|
Bro did u not see the 100% chance of recession article the other day
| 41 |
FlaccidButLongBanana
| 1,666,244,807 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it23eqq
|
to call it a Recession - we need to complete the mid-term elections first
| 12 |
HashPat1
| 1,666,266,354 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it27eoq
|
We’re already in a recession. All this flair and flash is a show for the mid terms. Let’s raise rates to 25% and rip the band aid off.
| 26 |
jbean01582
| 1,666,268,611 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it1mnpd
|
3 month 10 year spread means recession can start in 6-12 months. 2 year 10 year spread means recession can start anywhere between 9 - 2 years. Market only starts pricing in recession around 6 months in advance, so we're probably a few months away from the big drop (although we've priced in a good amount of the recession already at Sp500=3500).
| 16 |
Malamonga1
| 1,666,253,087 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it1dsy7
|
In 2007-2008 all the banks like Goldman, JP Morgan, Bank of America all publicly stated that they expected a recession in the next 12 months. And the closer we got, the more sure of it they became. And finally they were right and the market imploded 45%. It's similar to today when just recently Bloomberg said a recession is 100% certain. We will see more people come out with the same prediction. You might think that "oh if everyone thinks a recession is gonna happen, then it's probably priced in already" but that's not the case. There is no contrarian play here. It will just get worse.
| 33 |
imlaggingsobad
| 1,666,245,648 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it2a1du
|
It’s inverted but still relatively flat. All the yields are basically above 4%. Once the 2yr yield drops to 2% or something is when to hit the panic button
| 5 |
solscend
| 1,666,269,937 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it1t0j6
|
Idgaf I keep buying. I was up 60k at the peak, now I am down 30k. The only green position I have left is AAPL. But I have time so I keep throwing money into the fire.
| 37 |
pain474
| 1,666,258,801 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it1x8bm
|
This is the most telegraphed and manufactured recession ever
| 9 |
esp211
| 1,666,262,226 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y8kzjr
|
it15wnb
|
We're in a fucking recession ya twats
Literally just go touch grass and see who can afford to eat out like they used to, buy new shit like they used, have friends over like they used to. The entire fucking god damn economy is inverted and twisted as fuck.
And y'all be like maybe there is a possibility of a future projected recession.
| 22 |
RelaxPrime
| 1,666,240,179 |
The 10y-3m spread finally turned negative today suggesting recession is now imminent
|
As many here know the 10y-2y spread has been deeply inverted for some time now, but today another commonly watched spread, the 3m-10y inverted too.
Generally a 10y-2y inversion can be seen as a forward indicator of recession where as a 10y-3m inversion suggests recession is likely imminent. Both being inverted has been a very strong recession indicator historically, but my understanding is that the Fed watches the 10y-3m specifically to gauge the health of the US economy.
I don't think this is signalling anything we don't already know but it does perhaps suggest the bond market now sees the possibility of a soft-landing as very unlikely.
[https://fred.stlouisfed.org/series/T10Y3M](https://fred.stlouisfed.org/series/T10Y3M)
| 1,797 |
kriptonicx
| 1,666,230,722 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y8kzjr/the_10y3m_spread_finally_turned_negative_today/
|
y5hlal
|
isjvsre
|
Big upside. Big downside. If the economy gets worse, people will cancel stuff like Duolingo first.
| 161 |
Sumif
| 1,665,933,798 |
Duolingo stock analysis and valuation - A company that I love
|
This week's casual valuation is Duolingo, a company that's very close to my heart offering a great language learning experience that is universally available. I am a huge proponent of free knowledge and I try to contribute to that as much as I can. All of these posts that I share weekly are free (and will continue to be that way). I strongly believe knowledge should be easily accessible to everyone.
The post will be divided into a few segments:
1. Understanding the business
2. Understanding the historical financial performance
3. Laying down some assumptions to value the company
4. Valuing the company based on assumptions significantly different than mine
**What is Duolingo?**
It's a technology company that wants to develop the best education in the world. At the moment, a more accurate description would be that it is a gamified language-learning platform offering over 40 different languages. What will come next, is to be seen. We could see mathematics, physics, and a lot more diversified content in the future.
As for the language-learning part, they are not alone in this field. There are plenty of ways to learn a new language, starting from YouTube, attending formal classes with tutors, to reading books and other similar apps. So, how is Duolingo different?
It's more personalized and provides a different and more fun user experience that guides the user through this journey. The user is not only engaged but also gets instant feedback. As a user, whether you've got it right or wrong, you are aware of it and can take action.
As a company, it has a significant amount of data that it can use to test and figure out what works and why. Similarly, the data can be used to understand what mistakes are most often made and help the users overcome these mistakes.
So, how does it make money? There are 4 different revenue sources:
\- Subscription (74%) - Those users that would like an ad-free experience can subscribe to their platform and get other features as well. This is by far their largest revenue source
\- Advertising (15%) - Users that cannot afford or aren't willing to pay for the content watch advertisements. They do not pay money, but they do pay with their time. Duolingo is monetizing these users as well which is great. Dropbox has a ton of free users as well, however, they don't earn anything from them as there are no ads. In addition, they need to pay for the storage, so the free users that Dropbox has, are destroying value over time.
\- DET (9%) - It stands for Duolingo English Tests - an English proficiency assessment and it is their fastest growing segment at this moment. This is being more and more accepted by universities, but also can be used as part of a resume/CV for those who would like to show their proficiency. In addition, it costs roughly 1/4 of what their competitors charge.
\- In-app purchases (2%) - related to additional features such as streak freeze/repairs, etc.
​
In each of these segments, Duolingo has growth plans. In the end, it all comes down to:
\- Getting more users
\- Converting more users from free to paid
\- Increasing the lifetime value of the subscribers (by keeping them subscribed for a longer period of time)
\- Expand adoption of DET
\- Extend the platform beyond language learning
​
**Historical financial performance**
So, how well did they do until now?
The # of monthly active users grew from **27.3m** back in 2019 to **49.5m** as of June 30th, 2022.
The # of daily active users grew from **5.2m** to **13.2m** for the same period.
The # of paid users grew from **0.9m** to **3.3m**.
Their penetration rate (Paid users / monthly active users) increased from **3.3%** to **6.7%**!
​
This growth reflects in their financials, as the revenue grew from $71m in 2019 to $306m for the last twelve months ("LTM") ending June 30th, 2022. The LTM revenue is still roughly 10% of their market cap.
Their gross margin grew from 71% to 73% during this period, but isn't sufficient yet to cover all the other operating expenses:
\- Research & Development (was **45%** of revenue back in 2019 --> **40%** LTM)
\- Sales & Marketing (was **21%** of revenue back in 2019 --> **20%** LTM)
\- General & Administrative (was **23%** back in 2019 --> **37%** LTM)
It is clear that the company isn't profitable, but the general & administrative seems too high. That's mainly due to IPO-related expenses. It will decrease as % of revenue in the coming period.
As they are working on diversifying content away from languages, they are pouring a lot of money into R&D. All of the expenses are expected to decrease significantly over time.
​
**The balance sheet**
As it is a technology company, there isn't really much on the balance sheet. Almost 85% of their entire balance sheet ($591m / $701m) represents the cash that they own.
On the other side of the balance sheet, there isn't much to discuss, except the unearned revenue of $128m. This represents the cash that Duolingo has received from users that have paid in advance for using the platform in the future. For example, if someone purchases an annual plan today, Duolingo will get the cash today, but the service will be provided over the next 12 months. Hence, the company does not recognize the revenue today, but over time.
​
**Assumptions about the future & valuation**
My assumptions:
**- Revenue growth** of 25% for the next 5 years, then declining to 10% by year 10 and then to 4% afterward (same as the risk-free rate).
**- Operating margin** of -20% for the next year, improving to -5% in year 5 and ultimately to 25%.
**- A discount rate of 12.92%** (WACC-based), decreasing to 11.31% over time (assuming the company becomes more mature and hence, less risky)
​
There are two classes of share, each one with a different number of voting rights. Since this has an impact on the control of the company coming from owning these shares, I've applied a 15% discount for lack of control.
Based on these assumptions, the fair value is $1,5b **($37.45/share)**
The current market cap is $3,1b ($78.31/share)
​
However, out of the $1,5b, only $72m is due to the present value of the cash flows in the next 10 years! The majority is based on the value that the company generates afterward as a stable, mature, profitable company with more users and diversified content.
​
**What if my assumptions are significantly wrong?**
​
Based on the assumptions above, the revenue will grow by 539% to $2b in 10 years and the operating margin will be 25%.
I am aware that my assumptions could be significantly wrong. So, let's take a look at how the value of the company (per share) will change based on different assumptions regarding the revenue 10 years from now and the operating margin:
​
|Revenue / Op. margin|20%|25%|30%|
|:-|:-|:-|:-|
|350% ($1,4b)|$20.5|$26.0|$31.1|
|539% ($2,0b)|$29.7|$37.5|$44.7|
|650% ($2,3b)|$35.1|$44.1|$52.6|
|1000% ($3,4b)|$51.9|$65.2|$77.0|
​
The table illustrates how much the company needs to grow and how high should the operating margin be so that it is fairly valued today.
Personally, I love everything about the company, except the price. It has a great mission, the management team is doing a good job, it is the best platform out there that I know of, and the users are engaged.
I am definitely excited about its future and I would love to have it in my portfolio one day.
​
What are your thoughts about Duolingo and its valuation?
| 233 |
k_ristovski
| 1,665,928,944 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y5hlal/duolingo_stock_analysis_and_valuation_a_company/
|
y5hlal
|
isk6yjj
|
Makes no profit still after Covid when everyone and their brother was trying to learn a language at home
| 40 |
CA_Mini
| 1,665,938,272 |
Duolingo stock analysis and valuation - A company that I love
|
This week's casual valuation is Duolingo, a company that's very close to my heart offering a great language learning experience that is universally available. I am a huge proponent of free knowledge and I try to contribute to that as much as I can. All of these posts that I share weekly are free (and will continue to be that way). I strongly believe knowledge should be easily accessible to everyone.
The post will be divided into a few segments:
1. Understanding the business
2. Understanding the historical financial performance
3. Laying down some assumptions to value the company
4. Valuing the company based on assumptions significantly different than mine
**What is Duolingo?**
It's a technology company that wants to develop the best education in the world. At the moment, a more accurate description would be that it is a gamified language-learning platform offering over 40 different languages. What will come next, is to be seen. We could see mathematics, physics, and a lot more diversified content in the future.
As for the language-learning part, they are not alone in this field. There are plenty of ways to learn a new language, starting from YouTube, attending formal classes with tutors, to reading books and other similar apps. So, how is Duolingo different?
It's more personalized and provides a different and more fun user experience that guides the user through this journey. The user is not only engaged but also gets instant feedback. As a user, whether you've got it right or wrong, you are aware of it and can take action.
As a company, it has a significant amount of data that it can use to test and figure out what works and why. Similarly, the data can be used to understand what mistakes are most often made and help the users overcome these mistakes.
So, how does it make money? There are 4 different revenue sources:
\- Subscription (74%) - Those users that would like an ad-free experience can subscribe to their platform and get other features as well. This is by far their largest revenue source
\- Advertising (15%) - Users that cannot afford or aren't willing to pay for the content watch advertisements. They do not pay money, but they do pay with their time. Duolingo is monetizing these users as well which is great. Dropbox has a ton of free users as well, however, they don't earn anything from them as there are no ads. In addition, they need to pay for the storage, so the free users that Dropbox has, are destroying value over time.
\- DET (9%) - It stands for Duolingo English Tests - an English proficiency assessment and it is their fastest growing segment at this moment. This is being more and more accepted by universities, but also can be used as part of a resume/CV for those who would like to show their proficiency. In addition, it costs roughly 1/4 of what their competitors charge.
\- In-app purchases (2%) - related to additional features such as streak freeze/repairs, etc.
​
In each of these segments, Duolingo has growth plans. In the end, it all comes down to:
\- Getting more users
\- Converting more users from free to paid
\- Increasing the lifetime value of the subscribers (by keeping them subscribed for a longer period of time)
\- Expand adoption of DET
\- Extend the platform beyond language learning
​
**Historical financial performance**
So, how well did they do until now?
The # of monthly active users grew from **27.3m** back in 2019 to **49.5m** as of June 30th, 2022.
The # of daily active users grew from **5.2m** to **13.2m** for the same period.
The # of paid users grew from **0.9m** to **3.3m**.
Their penetration rate (Paid users / monthly active users) increased from **3.3%** to **6.7%**!
​
This growth reflects in their financials, as the revenue grew from $71m in 2019 to $306m for the last twelve months ("LTM") ending June 30th, 2022. The LTM revenue is still roughly 10% of their market cap.
Their gross margin grew from 71% to 73% during this period, but isn't sufficient yet to cover all the other operating expenses:
\- Research & Development (was **45%** of revenue back in 2019 --> **40%** LTM)
\- Sales & Marketing (was **21%** of revenue back in 2019 --> **20%** LTM)
\- General & Administrative (was **23%** back in 2019 --> **37%** LTM)
It is clear that the company isn't profitable, but the general & administrative seems too high. That's mainly due to IPO-related expenses. It will decrease as % of revenue in the coming period.
As they are working on diversifying content away from languages, they are pouring a lot of money into R&D. All of the expenses are expected to decrease significantly over time.
​
**The balance sheet**
As it is a technology company, there isn't really much on the balance sheet. Almost 85% of their entire balance sheet ($591m / $701m) represents the cash that they own.
On the other side of the balance sheet, there isn't much to discuss, except the unearned revenue of $128m. This represents the cash that Duolingo has received from users that have paid in advance for using the platform in the future. For example, if someone purchases an annual plan today, Duolingo will get the cash today, but the service will be provided over the next 12 months. Hence, the company does not recognize the revenue today, but over time.
​
**Assumptions about the future & valuation**
My assumptions:
**- Revenue growth** of 25% for the next 5 years, then declining to 10% by year 10 and then to 4% afterward (same as the risk-free rate).
**- Operating margin** of -20% for the next year, improving to -5% in year 5 and ultimately to 25%.
**- A discount rate of 12.92%** (WACC-based), decreasing to 11.31% over time (assuming the company becomes more mature and hence, less risky)
​
There are two classes of share, each one with a different number of voting rights. Since this has an impact on the control of the company coming from owning these shares, I've applied a 15% discount for lack of control.
Based on these assumptions, the fair value is $1,5b **($37.45/share)**
The current market cap is $3,1b ($78.31/share)
​
However, out of the $1,5b, only $72m is due to the present value of the cash flows in the next 10 years! The majority is based on the value that the company generates afterward as a stable, mature, profitable company with more users and diversified content.
​
**What if my assumptions are significantly wrong?**
​
Based on the assumptions above, the revenue will grow by 539% to $2b in 10 years and the operating margin will be 25%.
I am aware that my assumptions could be significantly wrong. So, let's take a look at how the value of the company (per share) will change based on different assumptions regarding the revenue 10 years from now and the operating margin:
​
|Revenue / Op. margin|20%|25%|30%|
|:-|:-|:-|:-|
|350% ($1,4b)|$20.5|$26.0|$31.1|
|539% ($2,0b)|$29.7|$37.5|$44.7|
|650% ($2,3b)|$35.1|$44.1|$52.6|
|1000% ($3,4b)|$51.9|$65.2|$77.0|
​
The table illustrates how much the company needs to grow and how high should the operating margin be so that it is fairly valued today.
Personally, I love everything about the company, except the price. It has a great mission, the management team is doing a good job, it is the best platform out there that I know of, and the users are engaged.
I am definitely excited about its future and I would love to have it in my portfolio one day.
​
What are your thoughts about Duolingo and its valuation?
| 233 |
k_ristovski
| 1,665,928,944 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y5hlal/duolingo_stock_analysis_and_valuation_a_company/
|
y5hlal
|
isju49v
|
I love this app and company for offering everything free of charge. Good luck monetizing.
| 65 |
CherryBlaster75
| 1,665,933,108 |
Duolingo stock analysis and valuation - A company that I love
|
This week's casual valuation is Duolingo, a company that's very close to my heart offering a great language learning experience that is universally available. I am a huge proponent of free knowledge and I try to contribute to that as much as I can. All of these posts that I share weekly are free (and will continue to be that way). I strongly believe knowledge should be easily accessible to everyone.
The post will be divided into a few segments:
1. Understanding the business
2. Understanding the historical financial performance
3. Laying down some assumptions to value the company
4. Valuing the company based on assumptions significantly different than mine
**What is Duolingo?**
It's a technology company that wants to develop the best education in the world. At the moment, a more accurate description would be that it is a gamified language-learning platform offering over 40 different languages. What will come next, is to be seen. We could see mathematics, physics, and a lot more diversified content in the future.
As for the language-learning part, they are not alone in this field. There are plenty of ways to learn a new language, starting from YouTube, attending formal classes with tutors, to reading books and other similar apps. So, how is Duolingo different?
It's more personalized and provides a different and more fun user experience that guides the user through this journey. The user is not only engaged but also gets instant feedback. As a user, whether you've got it right or wrong, you are aware of it and can take action.
As a company, it has a significant amount of data that it can use to test and figure out what works and why. Similarly, the data can be used to understand what mistakes are most often made and help the users overcome these mistakes.
So, how does it make money? There are 4 different revenue sources:
\- Subscription (74%) - Those users that would like an ad-free experience can subscribe to their platform and get other features as well. This is by far their largest revenue source
\- Advertising (15%) - Users that cannot afford or aren't willing to pay for the content watch advertisements. They do not pay money, but they do pay with their time. Duolingo is monetizing these users as well which is great. Dropbox has a ton of free users as well, however, they don't earn anything from them as there are no ads. In addition, they need to pay for the storage, so the free users that Dropbox has, are destroying value over time.
\- DET (9%) - It stands for Duolingo English Tests - an English proficiency assessment and it is their fastest growing segment at this moment. This is being more and more accepted by universities, but also can be used as part of a resume/CV for those who would like to show their proficiency. In addition, it costs roughly 1/4 of what their competitors charge.
\- In-app purchases (2%) - related to additional features such as streak freeze/repairs, etc.
​
In each of these segments, Duolingo has growth plans. In the end, it all comes down to:
\- Getting more users
\- Converting more users from free to paid
\- Increasing the lifetime value of the subscribers (by keeping them subscribed for a longer period of time)
\- Expand adoption of DET
\- Extend the platform beyond language learning
​
**Historical financial performance**
So, how well did they do until now?
The # of monthly active users grew from **27.3m** back in 2019 to **49.5m** as of June 30th, 2022.
The # of daily active users grew from **5.2m** to **13.2m** for the same period.
The # of paid users grew from **0.9m** to **3.3m**.
Their penetration rate (Paid users / monthly active users) increased from **3.3%** to **6.7%**!
​
This growth reflects in their financials, as the revenue grew from $71m in 2019 to $306m for the last twelve months ("LTM") ending June 30th, 2022. The LTM revenue is still roughly 10% of their market cap.
Their gross margin grew from 71% to 73% during this period, but isn't sufficient yet to cover all the other operating expenses:
\- Research & Development (was **45%** of revenue back in 2019 --> **40%** LTM)
\- Sales & Marketing (was **21%** of revenue back in 2019 --> **20%** LTM)
\- General & Administrative (was **23%** back in 2019 --> **37%** LTM)
It is clear that the company isn't profitable, but the general & administrative seems too high. That's mainly due to IPO-related expenses. It will decrease as % of revenue in the coming period.
As they are working on diversifying content away from languages, they are pouring a lot of money into R&D. All of the expenses are expected to decrease significantly over time.
​
**The balance sheet**
As it is a technology company, there isn't really much on the balance sheet. Almost 85% of their entire balance sheet ($591m / $701m) represents the cash that they own.
On the other side of the balance sheet, there isn't much to discuss, except the unearned revenue of $128m. This represents the cash that Duolingo has received from users that have paid in advance for using the platform in the future. For example, if someone purchases an annual plan today, Duolingo will get the cash today, but the service will be provided over the next 12 months. Hence, the company does not recognize the revenue today, but over time.
​
**Assumptions about the future & valuation**
My assumptions:
**- Revenue growth** of 25% for the next 5 years, then declining to 10% by year 10 and then to 4% afterward (same as the risk-free rate).
**- Operating margin** of -20% for the next year, improving to -5% in year 5 and ultimately to 25%.
**- A discount rate of 12.92%** (WACC-based), decreasing to 11.31% over time (assuming the company becomes more mature and hence, less risky)
​
There are two classes of share, each one with a different number of voting rights. Since this has an impact on the control of the company coming from owning these shares, I've applied a 15% discount for lack of control.
Based on these assumptions, the fair value is $1,5b **($37.45/share)**
The current market cap is $3,1b ($78.31/share)
​
However, out of the $1,5b, only $72m is due to the present value of the cash flows in the next 10 years! The majority is based on the value that the company generates afterward as a stable, mature, profitable company with more users and diversified content.
​
**What if my assumptions are significantly wrong?**
​
Based on the assumptions above, the revenue will grow by 539% to $2b in 10 years and the operating margin will be 25%.
I am aware that my assumptions could be significantly wrong. So, let's take a look at how the value of the company (per share) will change based on different assumptions regarding the revenue 10 years from now and the operating margin:
​
|Revenue / Op. margin|20%|25%|30%|
|:-|:-|:-|:-|
|350% ($1,4b)|$20.5|$26.0|$31.1|
|539% ($2,0b)|$29.7|$37.5|$44.7|
|650% ($2,3b)|$35.1|$44.1|$52.6|
|1000% ($3,4b)|$51.9|$65.2|$77.0|
​
The table illustrates how much the company needs to grow and how high should the operating margin be so that it is fairly valued today.
Personally, I love everything about the company, except the price. It has a great mission, the management team is doing a good job, it is the best platform out there that I know of, and the users are engaged.
I am definitely excited about its future and I would love to have it in my portfolio one day.
​
What are your thoughts about Duolingo and its valuation?
| 233 |
k_ristovski
| 1,665,928,944 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y5hlal/duolingo_stock_analysis_and_valuation_a_company/
|
y5hlal
|
iskywza
|
https://i.imgur.com/Ttfrnuo.jpg
Huge buy signal IMO
| 35 |
Sane_Wicked
| 1,665,948,888 |
Duolingo stock analysis and valuation - A company that I love
|
This week's casual valuation is Duolingo, a company that's very close to my heart offering a great language learning experience that is universally available. I am a huge proponent of free knowledge and I try to contribute to that as much as I can. All of these posts that I share weekly are free (and will continue to be that way). I strongly believe knowledge should be easily accessible to everyone.
The post will be divided into a few segments:
1. Understanding the business
2. Understanding the historical financial performance
3. Laying down some assumptions to value the company
4. Valuing the company based on assumptions significantly different than mine
**What is Duolingo?**
It's a technology company that wants to develop the best education in the world. At the moment, a more accurate description would be that it is a gamified language-learning platform offering over 40 different languages. What will come next, is to be seen. We could see mathematics, physics, and a lot more diversified content in the future.
As for the language-learning part, they are not alone in this field. There are plenty of ways to learn a new language, starting from YouTube, attending formal classes with tutors, to reading books and other similar apps. So, how is Duolingo different?
It's more personalized and provides a different and more fun user experience that guides the user through this journey. The user is not only engaged but also gets instant feedback. As a user, whether you've got it right or wrong, you are aware of it and can take action.
As a company, it has a significant amount of data that it can use to test and figure out what works and why. Similarly, the data can be used to understand what mistakes are most often made and help the users overcome these mistakes.
So, how does it make money? There are 4 different revenue sources:
\- Subscription (74%) - Those users that would like an ad-free experience can subscribe to their platform and get other features as well. This is by far their largest revenue source
\- Advertising (15%) - Users that cannot afford or aren't willing to pay for the content watch advertisements. They do not pay money, but they do pay with their time. Duolingo is monetizing these users as well which is great. Dropbox has a ton of free users as well, however, they don't earn anything from them as there are no ads. In addition, they need to pay for the storage, so the free users that Dropbox has, are destroying value over time.
\- DET (9%) - It stands for Duolingo English Tests - an English proficiency assessment and it is their fastest growing segment at this moment. This is being more and more accepted by universities, but also can be used as part of a resume/CV for those who would like to show their proficiency. In addition, it costs roughly 1/4 of what their competitors charge.
\- In-app purchases (2%) - related to additional features such as streak freeze/repairs, etc.
​
In each of these segments, Duolingo has growth plans. In the end, it all comes down to:
\- Getting more users
\- Converting more users from free to paid
\- Increasing the lifetime value of the subscribers (by keeping them subscribed for a longer period of time)
\- Expand adoption of DET
\- Extend the platform beyond language learning
​
**Historical financial performance**
So, how well did they do until now?
The # of monthly active users grew from **27.3m** back in 2019 to **49.5m** as of June 30th, 2022.
The # of daily active users grew from **5.2m** to **13.2m** for the same period.
The # of paid users grew from **0.9m** to **3.3m**.
Their penetration rate (Paid users / monthly active users) increased from **3.3%** to **6.7%**!
​
This growth reflects in their financials, as the revenue grew from $71m in 2019 to $306m for the last twelve months ("LTM") ending June 30th, 2022. The LTM revenue is still roughly 10% of their market cap.
Their gross margin grew from 71% to 73% during this period, but isn't sufficient yet to cover all the other operating expenses:
\- Research & Development (was **45%** of revenue back in 2019 --> **40%** LTM)
\- Sales & Marketing (was **21%** of revenue back in 2019 --> **20%** LTM)
\- General & Administrative (was **23%** back in 2019 --> **37%** LTM)
It is clear that the company isn't profitable, but the general & administrative seems too high. That's mainly due to IPO-related expenses. It will decrease as % of revenue in the coming period.
As they are working on diversifying content away from languages, they are pouring a lot of money into R&D. All of the expenses are expected to decrease significantly over time.
​
**The balance sheet**
As it is a technology company, there isn't really much on the balance sheet. Almost 85% of their entire balance sheet ($591m / $701m) represents the cash that they own.
On the other side of the balance sheet, there isn't much to discuss, except the unearned revenue of $128m. This represents the cash that Duolingo has received from users that have paid in advance for using the platform in the future. For example, if someone purchases an annual plan today, Duolingo will get the cash today, but the service will be provided over the next 12 months. Hence, the company does not recognize the revenue today, but over time.
​
**Assumptions about the future & valuation**
My assumptions:
**- Revenue growth** of 25% for the next 5 years, then declining to 10% by year 10 and then to 4% afterward (same as the risk-free rate).
**- Operating margin** of -20% for the next year, improving to -5% in year 5 and ultimately to 25%.
**- A discount rate of 12.92%** (WACC-based), decreasing to 11.31% over time (assuming the company becomes more mature and hence, less risky)
​
There are two classes of share, each one with a different number of voting rights. Since this has an impact on the control of the company coming from owning these shares, I've applied a 15% discount for lack of control.
Based on these assumptions, the fair value is $1,5b **($37.45/share)**
The current market cap is $3,1b ($78.31/share)
​
However, out of the $1,5b, only $72m is due to the present value of the cash flows in the next 10 years! The majority is based on the value that the company generates afterward as a stable, mature, profitable company with more users and diversified content.
​
**What if my assumptions are significantly wrong?**
​
Based on the assumptions above, the revenue will grow by 539% to $2b in 10 years and the operating margin will be 25%.
I am aware that my assumptions could be significantly wrong. So, let's take a look at how the value of the company (per share) will change based on different assumptions regarding the revenue 10 years from now and the operating margin:
​
|Revenue / Op. margin|20%|25%|30%|
|:-|:-|:-|:-|
|350% ($1,4b)|$20.5|$26.0|$31.1|
|539% ($2,0b)|$29.7|$37.5|$44.7|
|650% ($2,3b)|$35.1|$44.1|$52.6|
|1000% ($3,4b)|$51.9|$65.2|$77.0|
​
The table illustrates how much the company needs to grow and how high should the operating margin be so that it is fairly valued today.
Personally, I love everything about the company, except the price. It has a great mission, the management team is doing a good job, it is the best platform out there that I know of, and the users are engaged.
I am definitely excited about its future and I would love to have it in my portfolio one day.
​
What are your thoughts about Duolingo and its valuation?
| 233 |
k_ristovski
| 1,665,928,944 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y5hlal/duolingo_stock_analysis_and_valuation_a_company/
|
y5hlal
|
isk5p1h
|
Wow, it’s rare that I say this in r/stocks, but great write up. You considered the important points without being too biased. As someone who didn’t know much about the company, I walked away with a better understanding. Nice job!
| 44 |
KennanCR
| 1,665,937,766 |
Duolingo stock analysis and valuation - A company that I love
|
This week's casual valuation is Duolingo, a company that's very close to my heart offering a great language learning experience that is universally available. I am a huge proponent of free knowledge and I try to contribute to that as much as I can. All of these posts that I share weekly are free (and will continue to be that way). I strongly believe knowledge should be easily accessible to everyone.
The post will be divided into a few segments:
1. Understanding the business
2. Understanding the historical financial performance
3. Laying down some assumptions to value the company
4. Valuing the company based on assumptions significantly different than mine
**What is Duolingo?**
It's a technology company that wants to develop the best education in the world. At the moment, a more accurate description would be that it is a gamified language-learning platform offering over 40 different languages. What will come next, is to be seen. We could see mathematics, physics, and a lot more diversified content in the future.
As for the language-learning part, they are not alone in this field. There are plenty of ways to learn a new language, starting from YouTube, attending formal classes with tutors, to reading books and other similar apps. So, how is Duolingo different?
It's more personalized and provides a different and more fun user experience that guides the user through this journey. The user is not only engaged but also gets instant feedback. As a user, whether you've got it right or wrong, you are aware of it and can take action.
As a company, it has a significant amount of data that it can use to test and figure out what works and why. Similarly, the data can be used to understand what mistakes are most often made and help the users overcome these mistakes.
So, how does it make money? There are 4 different revenue sources:
\- Subscription (74%) - Those users that would like an ad-free experience can subscribe to their platform and get other features as well. This is by far their largest revenue source
\- Advertising (15%) - Users that cannot afford or aren't willing to pay for the content watch advertisements. They do not pay money, but they do pay with their time. Duolingo is monetizing these users as well which is great. Dropbox has a ton of free users as well, however, they don't earn anything from them as there are no ads. In addition, they need to pay for the storage, so the free users that Dropbox has, are destroying value over time.
\- DET (9%) - It stands for Duolingo English Tests - an English proficiency assessment and it is their fastest growing segment at this moment. This is being more and more accepted by universities, but also can be used as part of a resume/CV for those who would like to show their proficiency. In addition, it costs roughly 1/4 of what their competitors charge.
\- In-app purchases (2%) - related to additional features such as streak freeze/repairs, etc.
​
In each of these segments, Duolingo has growth plans. In the end, it all comes down to:
\- Getting more users
\- Converting more users from free to paid
\- Increasing the lifetime value of the subscribers (by keeping them subscribed for a longer period of time)
\- Expand adoption of DET
\- Extend the platform beyond language learning
​
**Historical financial performance**
So, how well did they do until now?
The # of monthly active users grew from **27.3m** back in 2019 to **49.5m** as of June 30th, 2022.
The # of daily active users grew from **5.2m** to **13.2m** for the same period.
The # of paid users grew from **0.9m** to **3.3m**.
Their penetration rate (Paid users / monthly active users) increased from **3.3%** to **6.7%**!
​
This growth reflects in their financials, as the revenue grew from $71m in 2019 to $306m for the last twelve months ("LTM") ending June 30th, 2022. The LTM revenue is still roughly 10% of their market cap.
Their gross margin grew from 71% to 73% during this period, but isn't sufficient yet to cover all the other operating expenses:
\- Research & Development (was **45%** of revenue back in 2019 --> **40%** LTM)
\- Sales & Marketing (was **21%** of revenue back in 2019 --> **20%** LTM)
\- General & Administrative (was **23%** back in 2019 --> **37%** LTM)
It is clear that the company isn't profitable, but the general & administrative seems too high. That's mainly due to IPO-related expenses. It will decrease as % of revenue in the coming period.
As they are working on diversifying content away from languages, they are pouring a lot of money into R&D. All of the expenses are expected to decrease significantly over time.
​
**The balance sheet**
As it is a technology company, there isn't really much on the balance sheet. Almost 85% of their entire balance sheet ($591m / $701m) represents the cash that they own.
On the other side of the balance sheet, there isn't much to discuss, except the unearned revenue of $128m. This represents the cash that Duolingo has received from users that have paid in advance for using the platform in the future. For example, if someone purchases an annual plan today, Duolingo will get the cash today, but the service will be provided over the next 12 months. Hence, the company does not recognize the revenue today, but over time.
​
**Assumptions about the future & valuation**
My assumptions:
**- Revenue growth** of 25% for the next 5 years, then declining to 10% by year 10 and then to 4% afterward (same as the risk-free rate).
**- Operating margin** of -20% for the next year, improving to -5% in year 5 and ultimately to 25%.
**- A discount rate of 12.92%** (WACC-based), decreasing to 11.31% over time (assuming the company becomes more mature and hence, less risky)
​
There are two classes of share, each one with a different number of voting rights. Since this has an impact on the control of the company coming from owning these shares, I've applied a 15% discount for lack of control.
Based on these assumptions, the fair value is $1,5b **($37.45/share)**
The current market cap is $3,1b ($78.31/share)
​
However, out of the $1,5b, only $72m is due to the present value of the cash flows in the next 10 years! The majority is based on the value that the company generates afterward as a stable, mature, profitable company with more users and diversified content.
​
**What if my assumptions are significantly wrong?**
​
Based on the assumptions above, the revenue will grow by 539% to $2b in 10 years and the operating margin will be 25%.
I am aware that my assumptions could be significantly wrong. So, let's take a look at how the value of the company (per share) will change based on different assumptions regarding the revenue 10 years from now and the operating margin:
​
|Revenue / Op. margin|20%|25%|30%|
|:-|:-|:-|:-|
|350% ($1,4b)|$20.5|$26.0|$31.1|
|539% ($2,0b)|$29.7|$37.5|$44.7|
|650% ($2,3b)|$35.1|$44.1|$52.6|
|1000% ($3,4b)|$51.9|$65.2|$77.0|
​
The table illustrates how much the company needs to grow and how high should the operating margin be so that it is fairly valued today.
Personally, I love everything about the company, except the price. It has a great mission, the management team is doing a good job, it is the best platform out there that I know of, and the users are engaged.
I am definitely excited about its future and I would love to have it in my portfolio one day.
​
What are your thoughts about Duolingo and its valuation?
| 233 |
k_ristovski
| 1,665,928,944 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y5hlal/duolingo_stock_analysis_and_valuation_a_company/
|
y5hlal
|
isk4e2s
|
I am a paid subscriber and plan to remain one for years to come. Great product. I have no idea why this means it is a great investment.
Is there a certain target DUOL needs to hit in terms of paid subscribers in order to become profitable? What is it?
How many people actually want to learn foreign languages? How many people can afford to pay for this?
What are the new products that will allow them to move beyond language learning?
Aren't there going to be rival apps like this going forward, particularly as the metaverse starts to offer interesting educational opportunities?
A larger concern I have is that this company is "cool," for lack of a better word. They have a certain buzz among educated people who want to learn languages, and that leads Motley Fool-type investors to think this is a "strong buy."
But in reality, investments are often not cool at all (Apple notwithstanding!). They are often stupid and boring like the XLU utilities ETF.
| 8 |
Londonskaya1828
| 1,665,937,254 |
Duolingo stock analysis and valuation - A company that I love
|
This week's casual valuation is Duolingo, a company that's very close to my heart offering a great language learning experience that is universally available. I am a huge proponent of free knowledge and I try to contribute to that as much as I can. All of these posts that I share weekly are free (and will continue to be that way). I strongly believe knowledge should be easily accessible to everyone.
The post will be divided into a few segments:
1. Understanding the business
2. Understanding the historical financial performance
3. Laying down some assumptions to value the company
4. Valuing the company based on assumptions significantly different than mine
**What is Duolingo?**
It's a technology company that wants to develop the best education in the world. At the moment, a more accurate description would be that it is a gamified language-learning platform offering over 40 different languages. What will come next, is to be seen. We could see mathematics, physics, and a lot more diversified content in the future.
As for the language-learning part, they are not alone in this field. There are plenty of ways to learn a new language, starting from YouTube, attending formal classes with tutors, to reading books and other similar apps. So, how is Duolingo different?
It's more personalized and provides a different and more fun user experience that guides the user through this journey. The user is not only engaged but also gets instant feedback. As a user, whether you've got it right or wrong, you are aware of it and can take action.
As a company, it has a significant amount of data that it can use to test and figure out what works and why. Similarly, the data can be used to understand what mistakes are most often made and help the users overcome these mistakes.
So, how does it make money? There are 4 different revenue sources:
\- Subscription (74%) - Those users that would like an ad-free experience can subscribe to their platform and get other features as well. This is by far their largest revenue source
\- Advertising (15%) - Users that cannot afford or aren't willing to pay for the content watch advertisements. They do not pay money, but they do pay with their time. Duolingo is monetizing these users as well which is great. Dropbox has a ton of free users as well, however, they don't earn anything from them as there are no ads. In addition, they need to pay for the storage, so the free users that Dropbox has, are destroying value over time.
\- DET (9%) - It stands for Duolingo English Tests - an English proficiency assessment and it is their fastest growing segment at this moment. This is being more and more accepted by universities, but also can be used as part of a resume/CV for those who would like to show their proficiency. In addition, it costs roughly 1/4 of what their competitors charge.
\- In-app purchases (2%) - related to additional features such as streak freeze/repairs, etc.
​
In each of these segments, Duolingo has growth plans. In the end, it all comes down to:
\- Getting more users
\- Converting more users from free to paid
\- Increasing the lifetime value of the subscribers (by keeping them subscribed for a longer period of time)
\- Expand adoption of DET
\- Extend the platform beyond language learning
​
**Historical financial performance**
So, how well did they do until now?
The # of monthly active users grew from **27.3m** back in 2019 to **49.5m** as of June 30th, 2022.
The # of daily active users grew from **5.2m** to **13.2m** for the same period.
The # of paid users grew from **0.9m** to **3.3m**.
Their penetration rate (Paid users / monthly active users) increased from **3.3%** to **6.7%**!
​
This growth reflects in their financials, as the revenue grew from $71m in 2019 to $306m for the last twelve months ("LTM") ending June 30th, 2022. The LTM revenue is still roughly 10% of their market cap.
Their gross margin grew from 71% to 73% during this period, but isn't sufficient yet to cover all the other operating expenses:
\- Research & Development (was **45%** of revenue back in 2019 --> **40%** LTM)
\- Sales & Marketing (was **21%** of revenue back in 2019 --> **20%** LTM)
\- General & Administrative (was **23%** back in 2019 --> **37%** LTM)
It is clear that the company isn't profitable, but the general & administrative seems too high. That's mainly due to IPO-related expenses. It will decrease as % of revenue in the coming period.
As they are working on diversifying content away from languages, they are pouring a lot of money into R&D. All of the expenses are expected to decrease significantly over time.
​
**The balance sheet**
As it is a technology company, there isn't really much on the balance sheet. Almost 85% of their entire balance sheet ($591m / $701m) represents the cash that they own.
On the other side of the balance sheet, there isn't much to discuss, except the unearned revenue of $128m. This represents the cash that Duolingo has received from users that have paid in advance for using the platform in the future. For example, if someone purchases an annual plan today, Duolingo will get the cash today, but the service will be provided over the next 12 months. Hence, the company does not recognize the revenue today, but over time.
​
**Assumptions about the future & valuation**
My assumptions:
**- Revenue growth** of 25% for the next 5 years, then declining to 10% by year 10 and then to 4% afterward (same as the risk-free rate).
**- Operating margin** of -20% for the next year, improving to -5% in year 5 and ultimately to 25%.
**- A discount rate of 12.92%** (WACC-based), decreasing to 11.31% over time (assuming the company becomes more mature and hence, less risky)
​
There are two classes of share, each one with a different number of voting rights. Since this has an impact on the control of the company coming from owning these shares, I've applied a 15% discount for lack of control.
Based on these assumptions, the fair value is $1,5b **($37.45/share)**
The current market cap is $3,1b ($78.31/share)
​
However, out of the $1,5b, only $72m is due to the present value of the cash flows in the next 10 years! The majority is based on the value that the company generates afterward as a stable, mature, profitable company with more users and diversified content.
​
**What if my assumptions are significantly wrong?**
​
Based on the assumptions above, the revenue will grow by 539% to $2b in 10 years and the operating margin will be 25%.
I am aware that my assumptions could be significantly wrong. So, let's take a look at how the value of the company (per share) will change based on different assumptions regarding the revenue 10 years from now and the operating margin:
​
|Revenue / Op. margin|20%|25%|30%|
|:-|:-|:-|:-|
|350% ($1,4b)|$20.5|$26.0|$31.1|
|539% ($2,0b)|$29.7|$37.5|$44.7|
|650% ($2,3b)|$35.1|$44.1|$52.6|
|1000% ($3,4b)|$51.9|$65.2|$77.0|
​
The table illustrates how much the company needs to grow and how high should the operating margin be so that it is fairly valued today.
Personally, I love everything about the company, except the price. It has a great mission, the management team is doing a good job, it is the best platform out there that I know of, and the users are engaged.
I am definitely excited about its future and I would love to have it in my portfolio one day.
​
What are your thoughts about Duolingo and its valuation?
| 233 |
k_ristovski
| 1,665,928,944 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y5hlal/duolingo_stock_analysis_and_valuation_a_company/
|
y5hlal
|
iskb7sc
|
The monetization got already really aggressive now compared to 2019.
I use their app every day. Some courses are really good (japanese, spanish, german) other are horrible (chinese, korean) and they really could improve their grammar system. It feels like it consists of thousands of if branches lol
| 6 |
masteroflich
| 1,665,939,959 |
Duolingo stock analysis and valuation - A company that I love
|
This week's casual valuation is Duolingo, a company that's very close to my heart offering a great language learning experience that is universally available. I am a huge proponent of free knowledge and I try to contribute to that as much as I can. All of these posts that I share weekly are free (and will continue to be that way). I strongly believe knowledge should be easily accessible to everyone.
The post will be divided into a few segments:
1. Understanding the business
2. Understanding the historical financial performance
3. Laying down some assumptions to value the company
4. Valuing the company based on assumptions significantly different than mine
**What is Duolingo?**
It's a technology company that wants to develop the best education in the world. At the moment, a more accurate description would be that it is a gamified language-learning platform offering over 40 different languages. What will come next, is to be seen. We could see mathematics, physics, and a lot more diversified content in the future.
As for the language-learning part, they are not alone in this field. There are plenty of ways to learn a new language, starting from YouTube, attending formal classes with tutors, to reading books and other similar apps. So, how is Duolingo different?
It's more personalized and provides a different and more fun user experience that guides the user through this journey. The user is not only engaged but also gets instant feedback. As a user, whether you've got it right or wrong, you are aware of it and can take action.
As a company, it has a significant amount of data that it can use to test and figure out what works and why. Similarly, the data can be used to understand what mistakes are most often made and help the users overcome these mistakes.
So, how does it make money? There are 4 different revenue sources:
\- Subscription (74%) - Those users that would like an ad-free experience can subscribe to their platform and get other features as well. This is by far their largest revenue source
\- Advertising (15%) - Users that cannot afford or aren't willing to pay for the content watch advertisements. They do not pay money, but they do pay with their time. Duolingo is monetizing these users as well which is great. Dropbox has a ton of free users as well, however, they don't earn anything from them as there are no ads. In addition, they need to pay for the storage, so the free users that Dropbox has, are destroying value over time.
\- DET (9%) - It stands for Duolingo English Tests - an English proficiency assessment and it is their fastest growing segment at this moment. This is being more and more accepted by universities, but also can be used as part of a resume/CV for those who would like to show their proficiency. In addition, it costs roughly 1/4 of what their competitors charge.
\- In-app purchases (2%) - related to additional features such as streak freeze/repairs, etc.
​
In each of these segments, Duolingo has growth plans. In the end, it all comes down to:
\- Getting more users
\- Converting more users from free to paid
\- Increasing the lifetime value of the subscribers (by keeping them subscribed for a longer period of time)
\- Expand adoption of DET
\- Extend the platform beyond language learning
​
**Historical financial performance**
So, how well did they do until now?
The # of monthly active users grew from **27.3m** back in 2019 to **49.5m** as of June 30th, 2022.
The # of daily active users grew from **5.2m** to **13.2m** for the same period.
The # of paid users grew from **0.9m** to **3.3m**.
Their penetration rate (Paid users / monthly active users) increased from **3.3%** to **6.7%**!
​
This growth reflects in their financials, as the revenue grew from $71m in 2019 to $306m for the last twelve months ("LTM") ending June 30th, 2022. The LTM revenue is still roughly 10% of their market cap.
Their gross margin grew from 71% to 73% during this period, but isn't sufficient yet to cover all the other operating expenses:
\- Research & Development (was **45%** of revenue back in 2019 --> **40%** LTM)
\- Sales & Marketing (was **21%** of revenue back in 2019 --> **20%** LTM)
\- General & Administrative (was **23%** back in 2019 --> **37%** LTM)
It is clear that the company isn't profitable, but the general & administrative seems too high. That's mainly due to IPO-related expenses. It will decrease as % of revenue in the coming period.
As they are working on diversifying content away from languages, they are pouring a lot of money into R&D. All of the expenses are expected to decrease significantly over time.
​
**The balance sheet**
As it is a technology company, there isn't really much on the balance sheet. Almost 85% of their entire balance sheet ($591m / $701m) represents the cash that they own.
On the other side of the balance sheet, there isn't much to discuss, except the unearned revenue of $128m. This represents the cash that Duolingo has received from users that have paid in advance for using the platform in the future. For example, if someone purchases an annual plan today, Duolingo will get the cash today, but the service will be provided over the next 12 months. Hence, the company does not recognize the revenue today, but over time.
​
**Assumptions about the future & valuation**
My assumptions:
**- Revenue growth** of 25% for the next 5 years, then declining to 10% by year 10 and then to 4% afterward (same as the risk-free rate).
**- Operating margin** of -20% for the next year, improving to -5% in year 5 and ultimately to 25%.
**- A discount rate of 12.92%** (WACC-based), decreasing to 11.31% over time (assuming the company becomes more mature and hence, less risky)
​
There are two classes of share, each one with a different number of voting rights. Since this has an impact on the control of the company coming from owning these shares, I've applied a 15% discount for lack of control.
Based on these assumptions, the fair value is $1,5b **($37.45/share)**
The current market cap is $3,1b ($78.31/share)
​
However, out of the $1,5b, only $72m is due to the present value of the cash flows in the next 10 years! The majority is based on the value that the company generates afterward as a stable, mature, profitable company with more users and diversified content.
​
**What if my assumptions are significantly wrong?**
​
Based on the assumptions above, the revenue will grow by 539% to $2b in 10 years and the operating margin will be 25%.
I am aware that my assumptions could be significantly wrong. So, let's take a look at how the value of the company (per share) will change based on different assumptions regarding the revenue 10 years from now and the operating margin:
​
|Revenue / Op. margin|20%|25%|30%|
|:-|:-|:-|:-|
|350% ($1,4b)|$20.5|$26.0|$31.1|
|539% ($2,0b)|$29.7|$37.5|$44.7|
|650% ($2,3b)|$35.1|$44.1|$52.6|
|1000% ($3,4b)|$51.9|$65.2|$77.0|
​
The table illustrates how much the company needs to grow and how high should the operating margin be so that it is fairly valued today.
Personally, I love everything about the company, except the price. It has a great mission, the management team is doing a good job, it is the best platform out there that I know of, and the users are engaged.
I am definitely excited about its future and I would love to have it in my portfolio one day.
​
What are your thoughts about Duolingo and its valuation?
| 233 |
k_ristovski
| 1,665,928,944 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y5hlal/duolingo_stock_analysis_and_valuation_a_company/
|
y5hlal
|
isk9sjm
|
I used to love Duolingo. Then I realized it's for just basic stuff for new learners. Nobody learns any new language from this app. Grammar is less important than the meaning of the sentence. I learnt a new language by talking to tutors in italki than learning grammar.
| 6 |
syuraj
| 1,665,939,398 |
Duolingo stock analysis and valuation - A company that I love
|
This week's casual valuation is Duolingo, a company that's very close to my heart offering a great language learning experience that is universally available. I am a huge proponent of free knowledge and I try to contribute to that as much as I can. All of these posts that I share weekly are free (and will continue to be that way). I strongly believe knowledge should be easily accessible to everyone.
The post will be divided into a few segments:
1. Understanding the business
2. Understanding the historical financial performance
3. Laying down some assumptions to value the company
4. Valuing the company based on assumptions significantly different than mine
**What is Duolingo?**
It's a technology company that wants to develop the best education in the world. At the moment, a more accurate description would be that it is a gamified language-learning platform offering over 40 different languages. What will come next, is to be seen. We could see mathematics, physics, and a lot more diversified content in the future.
As for the language-learning part, they are not alone in this field. There are plenty of ways to learn a new language, starting from YouTube, attending formal classes with tutors, to reading books and other similar apps. So, how is Duolingo different?
It's more personalized and provides a different and more fun user experience that guides the user through this journey. The user is not only engaged but also gets instant feedback. As a user, whether you've got it right or wrong, you are aware of it and can take action.
As a company, it has a significant amount of data that it can use to test and figure out what works and why. Similarly, the data can be used to understand what mistakes are most often made and help the users overcome these mistakes.
So, how does it make money? There are 4 different revenue sources:
\- Subscription (74%) - Those users that would like an ad-free experience can subscribe to their platform and get other features as well. This is by far their largest revenue source
\- Advertising (15%) - Users that cannot afford or aren't willing to pay for the content watch advertisements. They do not pay money, but they do pay with their time. Duolingo is monetizing these users as well which is great. Dropbox has a ton of free users as well, however, they don't earn anything from them as there are no ads. In addition, they need to pay for the storage, so the free users that Dropbox has, are destroying value over time.
\- DET (9%) - It stands for Duolingo English Tests - an English proficiency assessment and it is their fastest growing segment at this moment. This is being more and more accepted by universities, but also can be used as part of a resume/CV for those who would like to show their proficiency. In addition, it costs roughly 1/4 of what their competitors charge.
\- In-app purchases (2%) - related to additional features such as streak freeze/repairs, etc.
​
In each of these segments, Duolingo has growth plans. In the end, it all comes down to:
\- Getting more users
\- Converting more users from free to paid
\- Increasing the lifetime value of the subscribers (by keeping them subscribed for a longer period of time)
\- Expand adoption of DET
\- Extend the platform beyond language learning
​
**Historical financial performance**
So, how well did they do until now?
The # of monthly active users grew from **27.3m** back in 2019 to **49.5m** as of June 30th, 2022.
The # of daily active users grew from **5.2m** to **13.2m** for the same period.
The # of paid users grew from **0.9m** to **3.3m**.
Their penetration rate (Paid users / monthly active users) increased from **3.3%** to **6.7%**!
​
This growth reflects in their financials, as the revenue grew from $71m in 2019 to $306m for the last twelve months ("LTM") ending June 30th, 2022. The LTM revenue is still roughly 10% of their market cap.
Their gross margin grew from 71% to 73% during this period, but isn't sufficient yet to cover all the other operating expenses:
\- Research & Development (was **45%** of revenue back in 2019 --> **40%** LTM)
\- Sales & Marketing (was **21%** of revenue back in 2019 --> **20%** LTM)
\- General & Administrative (was **23%** back in 2019 --> **37%** LTM)
It is clear that the company isn't profitable, but the general & administrative seems too high. That's mainly due to IPO-related expenses. It will decrease as % of revenue in the coming period.
As they are working on diversifying content away from languages, they are pouring a lot of money into R&D. All of the expenses are expected to decrease significantly over time.
​
**The balance sheet**
As it is a technology company, there isn't really much on the balance sheet. Almost 85% of their entire balance sheet ($591m / $701m) represents the cash that they own.
On the other side of the balance sheet, there isn't much to discuss, except the unearned revenue of $128m. This represents the cash that Duolingo has received from users that have paid in advance for using the platform in the future. For example, if someone purchases an annual plan today, Duolingo will get the cash today, but the service will be provided over the next 12 months. Hence, the company does not recognize the revenue today, but over time.
​
**Assumptions about the future & valuation**
My assumptions:
**- Revenue growth** of 25% for the next 5 years, then declining to 10% by year 10 and then to 4% afterward (same as the risk-free rate).
**- Operating margin** of -20% for the next year, improving to -5% in year 5 and ultimately to 25%.
**- A discount rate of 12.92%** (WACC-based), decreasing to 11.31% over time (assuming the company becomes more mature and hence, less risky)
​
There are two classes of share, each one with a different number of voting rights. Since this has an impact on the control of the company coming from owning these shares, I've applied a 15% discount for lack of control.
Based on these assumptions, the fair value is $1,5b **($37.45/share)**
The current market cap is $3,1b ($78.31/share)
​
However, out of the $1,5b, only $72m is due to the present value of the cash flows in the next 10 years! The majority is based on the value that the company generates afterward as a stable, mature, profitable company with more users and diversified content.
​
**What if my assumptions are significantly wrong?**
​
Based on the assumptions above, the revenue will grow by 539% to $2b in 10 years and the operating margin will be 25%.
I am aware that my assumptions could be significantly wrong. So, let's take a look at how the value of the company (per share) will change based on different assumptions regarding the revenue 10 years from now and the operating margin:
​
|Revenue / Op. margin|20%|25%|30%|
|:-|:-|:-|:-|
|350% ($1,4b)|$20.5|$26.0|$31.1|
|539% ($2,0b)|$29.7|$37.5|$44.7|
|650% ($2,3b)|$35.1|$44.1|$52.6|
|1000% ($3,4b)|$51.9|$65.2|$77.0|
​
The table illustrates how much the company needs to grow and how high should the operating margin be so that it is fairly valued today.
Personally, I love everything about the company, except the price. It has a great mission, the management team is doing a good job, it is the best platform out there that I know of, and the users are engaged.
I am definitely excited about its future and I would love to have it in my portfolio one day.
​
What are your thoughts about Duolingo and its valuation?
| 233 |
k_ristovski
| 1,665,928,944 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/y5hlal/duolingo_stock_analysis_and_valuation_a_company/
|
xmdo61
|
ipnyaj3
|
Its nice to read somewhat informative pieces like this
| 6 |
Ok-Savings2625
| 1,663,981,781 |
Wall Street Week Ahead for the trading week beginning September 26th, 2022
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Good Friday evening to all of you here on r/stocks! I hope everyone on this sub made out pretty nicely in the market this past week, and are ready for the new trading week ahead. :)
Here is everything you need to know to get you ready for the trading week beginning September 26th, 2022.
# **Dow drops nearly 500 points to close at new low for 2022 on rising recession fears - [(Source)](https://www.cnbc.com/2022/09/22/futures-inch-higher-following-another-day-of-losses-after-fed-rate-hike-sell-offs.html)**
*****
> Stocks tumbled Friday to cap a brutal week for financial markets, as surging interest rates and foreign currency turmoil heightened fears of a global recession.
*****
> The Dow Jones Industrial Average tumbled 486.27 points, or 1.62%, to 29,590.41. The S&P 500 slid 1.72% to 3,693.23, while the Nasdaq Composite dropped 1.8% to 10,867.93.
*****
> The Dow notched a new low for the year and closed below 30,000 for the first time since June 17. The 30-stock index ended the day 19.9% below an intraday record, flirting with bear market territory. At one point, the Dow was down more than 826 points.
*****
> The major averages capped their fifth negative week in six, with the Dow giving up 4%. The S&P and Nasdaq shed 4.65% and 5.07%, respectively. It marked the fourth negative session in a row for stocks, as the Fed on Wednesday enacted another super-sized rate hike of 75 basis points and indicated it would do another at its November meeting.
*****
> “The market has been transitioning clearly and quickly from worries over inflation to concerns over the aggressive Federal Reserve campaign,” said Quincy Krosby of LPL Financial. “You see bond yields rising to levels we haven’t seen in years — it’s changing the mindset to how does the Fed get to price stability without something breaking.”
*****
> The British pound hit a fresh more than three-decade low against the U.S. dollar after a new U.K. economic plan that included a slew of tax cuts rattled markets that are fearing inflation above all right now. Major European markets lost 2% on the day.
*****
> “This is a global macro mess that the market is trying to sort out,” Krosby said.
*****
> Bond yields soared this week following the Fed’s actions, with the 2-year and 10-year Treasury rates hitting highs not seen in over a decade.
*****
> Goldman Sachs cut its year-end S&P 500 target because of rising rates, predicting at least a 4% downside from here.
*****
> Stocks positioned to suffer the most in a recession led the week’s losses with the S&P 500′s consumer discretionary sector falling 7%. Energy slumped 9% as oil prices dropped. Growth stocks, including big technology names Apple, Amazon, Microsoft and Meta Platforms fell on Friday.
*****
> “Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable and their focus is on the timing, magnitude, and duration of a potential recession and investment strategies for that outlook,” wrote Goldman Sachs’ David Kostin in a note to clients as he cut his outlook.
*****
# **This past week saw the following moves in the S&P:**
###### **([CLICK HERE FOR THE FULL S&P TREE MAP FOR THE PAST WEEK!](https://i.imgur.com/f74j3wZ.png))**
# **S&P Sectors for this past week:**
###### **([CLICK HERE FOR THE S&P SECTORS FOR THE PAST WEEK!](https://i.imgur.com/RY5yAn6.png))**
# **Major Indices for this past week:**
###### **([CLICK HERE FOR THE MAJOR INDICES FOR THE PAST WEEK!](https://i.imgur.com/i2lueAy.png))**
# **Major Futures Markets as of Friday's close:**
###### **([CLICK HERE FOR THE MAJOR FUTURES INDICES AS OF FRIDAY!](https://i.imgur.com/9HxK7AL.png))**
# **Economic Calendar for the Week Ahead:**
###### **([CLICK HERE FOR THE FULL ECONOMIC CALENDAR FOR THE WEEK AHEAD!](https://i.imgur.com/ujpA6eb.png))**
# **Percentage Changes for the Major Indices, WTD, MTD, QTD, YTD as of Friday's close:**
###### **([CLICK HERE FOR THE CHART!](https://i.imgur.com/gzWEdcI.png))**
# **S&P Sectors for the Past Week:**
###### **([CLICK HERE FOR THE CHART!](https://i.imgur.com/nIaQRMh.png))**
# **Major Indices Pullback/Correction Levels as of Friday's close:**
###### **([CLICK HERE FOR THE CHART!](https://i.imgur.com/Cd7vMGH.png))**
# **Major Indices Rally Levels as of Friday's close:**
###### **([CLICK HERE FOR THE CHART!](https://i.imgur.com/wVxDHyr.png))**
# **Most Anticipated Earnings Releases for this week:**
###### **([CLICK HERE FOR THE CHART!](https://i.imgur.com/6zs87jB.jpg))**
# **Here are the upcoming IPO's for this week:**
###### **([CLICK HERE FOR THE CHART!](https://i.imgur.com/jeJV4rn.png))**
# **Friday's Stock Analyst Upgrades & Downgrades:**
###### **([CLICK HERE FOR THE CHART LINK #1!](https://i.imgur.com/5oP5PDF.png))**
###### **([CLICK HERE FOR THE CHART LINK #2!](https://i.imgur.com/D3NobOu.png))**
###### **([CLICK HERE FOR THE CHART LINK #3!](https://i.imgur.com/zu87XNw.png))**
*****
> # Market Atones for Sins Early
> ###### **([CLICK HERE FOR THE CHART!](https://64.media.tumblr.com/14389b6eb9f59fcb82be553d2eb6ec89/8489dff9c57e81f8-10/s500x750/85668c595adc715f861d98fab2c2d2c6383bde07.jpg))**
> So, it might be a bit late for Sell Rosh Hashanah, but Buy Yom Kippur is looking like a good set up. A host of fears from inflation, hawkish Fed, bellicose Russia, global upheaval, US midterm politics is exacerbating the usual seasonal and 4-year cycle carnage.
> The thesis is that folks sell positions on Rosh Hashanah the first of the Days of Awe to rid themselves of financial commitments and then return to the market after Yom Kippur, the Day of Atonement. It is no coincidence that this coincides with the seasonal September/October weakness.
> ###### **([CLICK HERE FOR THE CHART!](https://64.media.tumblr.com/73ee07aab9aad9010423b62e060f0ce7/8489dff9c57e81f8-a9/s500x750/8283b997870471cc877e46b4686b6b8734cd2e12.jpg))**
> Interestingly the Sell Rosh Hashanah/Buy Yom Kippur period is not so bad in midterm years, likely due to the fact it lands at the end of the Weak Spot and the beginning of the Sweet Spot of the 4-Year cycle – the best buying opportunity of the 4-Year Cycle.
> ###### **([CLICK HERE FOR THE CHART!](https://64.media.tumblr.com/8123ce44b73879106622d4cf3e79616d/8489dff9c57e81f8-ad/s500x750/b59357326b8bd57bc6cccc9c12577e63e59ab8c2.jpg))**
*****
> # Five Reasons Inflation Isn’t So Sticky
> After the disappointing all around Consumer Price Index (CPI) report last week, the worries over inflation staying higher for longer (what they call sticky) is a very real worry. That report showed prices for many goods and services were increasing more than expected (even things like dental services were much higher than expected), while nearly every economist we saw on tv before the report was saying inflation had peaked and would be heading down, and in a hurry.
> Full disclosure, I was in that camp as well, as I discussed with Yahoo! Finance here.
> Well, it isn’t all bad news, as there are many signs inflation could still come back down quickly. For one thing gas prices continue to head lower, as my colleague Sonu Varghese recently wrote about. Sure, core consumer prices (excluding energy and food) are higher than anyone would like, but there are other types of inflation than just at the consumer level.
> Here are five reasons that suggest inflation could still fall quite quickly and last month’s CPI data isn’t the beginning of a new trend.
> First up, used car prices collapsed four percent last month according to the Manheim Used Car Value Index. This was the second largest monthly decline ever and the year-over-year change is down to 8.4%, the lowest since June 2020. This large drop wasn’t accounted for in the recent CPI report and will put downward pressure on prices over the coming months.
> ###### **([CLICK HERE FOR THE CHART!](https://www.carsongroup.com/wp-content/uploads/2022/09/Graph-1-092122.png))**
> Second, how much companies are paying for things is going down and quickly. Looking at the prices paid component of the ISM services and manufacturing surveys show a big move lower the past few months. Prices paid tends to lead overall CPI by several months, and so this is another reason to think inflation could come down quickly before year-end.
> ###### **([CLICK HERE FOR THE CHART!](https://www.carsongroup.com/wp-content/uploads/2022/09/Graph-2-092122.png))**
> Third, the ISM is a national survey, but regional surveys show similar results. The recent Philly Fed and Empire State surveys each show prices paid crashing lower.
> ###### **([CLICK HERE FOR THE CHART!](https://www.carsongroup.com/wp-content/uploads/2022/09/Graph-3-092122.png))**
> Fourth, supply chain issues were a major reason for the huge spike in inflation. So, you would think once those supply chains begin to improve, so would inflation. The good news is we are seeing substantial improvements in supply chains. For instance, back in January more than 100 ships were caught in a logjam at the Port of Los Angeles, yet earlier this month there were less than 10 ships. And as the chart below shows, overall supply chain pressures have come down significantly. Another source of potential downward pressure on overall inflation.
> ###### **([CLICK HERE FOR THE CHART!](https://www.carsongroup.com/wp-content/uploads/2022/09/Graph-4-092122.png))**
> Lastly, prices at the producer level have come back much quicker than at the consumer level. The Producer Price Index (PPI) year-over-year peaked at 11.6% in March, but it was already down to 8.7% five months later. Compare that with the CPI peaking at just over 9.0% and only at 8.3% currently.
> ###### **([CLICK HERE FOR THE CHART!](https://www.carsongroup.com/wp-content/uploads/2022/09/Graph-5-092122.png))**
> So there you have it. Inflation is still a major issue, and that recent CPI report wasn’t pretty in any way. But there is light at the end of the inflation tunnel, as other aspects of inflation is showing some incredible improvement and not many people are noticing.
*****
> # September to (Not) Remember
> Hat tip George Noble @gnoble79 for this title from his superb Twitter Space today. He has been on point all year. Disappointing CPI and increasingly hawkish remarks and action from the Fed clearly brought the usual September peak early. But that does not mean we are out of the woods.
> Late September is still a dangerous period for the market, especially month-end, and then there is Octoberphobia to contend with, which promises to be turbulent with all the market must digest. On top of the Fed, inflation, weaker fundamentals, fickle market internals, shaky technicals we have the negative seasonality from fund tax selling, end of Q3 window dressing and portfolio restructuring.
> We have been cautious all year and mostly in cash, having honored our stops and indicators. June lows are only 1% away for the Dow, S&P 3.4%, NASDAQ 5.4%, Russell 2000 6.8%. Cash is still king. Patience is in order. We are sticking to our Seasonal Trading Playbook. If you’re not nimble and able to trade quickly, wait for our Best Six Months Seasonal MACD Buy Signal.
> ###### **([CLICK HERE FOR THE CHART!](https://64.media.tumblr.com/b3028d078cff847c816f2ba188b0f9e0/d21403cd066948d5-25/s500x750/e12ec7d217d9fdcfb4dbf8c88347068407531c37.jpg))**
*****
> # Worse Before It Gets Better
> For those checking in on our Seasonality Tool in the past week, the current point of the year can either look like one of the worst, middling, or best times of the year depending on the time frame. As shown below, the median one-week performance of the S&P 500 from the close on 9/20 over the last ten years has been a decline of 95 bps loss which ranks in just the fourth percentile of all days of the year. Extending out to look at the S&P 500's median one-month performance, the 105 bps median gain is about smack dab in the middle of the range of historical one-month returns. Moving out to three months, the S&P 500's median gain of 578 bps ranks in the top 5% of all days.
> ###### **([CLICK HERE FOR THE CHART!](https://media.bespokepremium.com/uploads/2022/09/092022-Season-1.png))**
> To look at seasonality in another way, the charts below show the average S&P 500 5-day performance (including a smoothed look via a 7-day moving average) and the percentage of time the index has traded positively at each calendar day of the year going all the way back to 1945. The current week of the year has averaged some of the worst one-week returns for the S&P 500 across all years of the post-WWII period while the index has tended to fall more often than not.
> ###### **([CLICK HERE FOR THE CHART!](https://media.bespokepremium.com/uploads/2022/09/092022-Season-5-Day.png))**
> Again, contrary to short-term seasonal weakness, taking a similar look but using a 3-month performance window, we are entering one of the best times of the year. As shown below, the second half of September into October sees the average 3-month performance rocket higher and by early October has tended to be the strongest of any point of the year.
> ###### **([CLICK HERE FOR THE CHART!](https://media.bespokepremium.com/uploads/2022/09/092022-Season-3Mo.png))**
*****
> # The Biggest Pandemic Losers
> With President Biden declaring that "the pandemic is over" on 60 Minutes last night, we thought we'd take a look at stock market performance since the pandemic began. At its peak on January 3rd, 2022, the S&P 500 was up more than 40% from its closing price on February 19th, 2020 -- the peak reading for the index prior to the COVID Crash. After entering bear market territory in 2022, the S&P is currently only 14% above its pre-COVID high. In the Russell 1,000 -- another large-cap index -- 41% of stocks are now trading below their closing price on February 19th, 2020. 20% of stocks in the index are down more than 20%! Given that two and a half years have passed, we think it's safe to say that any stock down 20% from pre-COVID levels has been a "pandemic loser." At least at this point in time.
> Below are stocks with market caps above $15 billion that are down at least 20% from their closing price on 2/19/20. Names like Boeing (BA), Delta (DAL), Uber (UBER), and Las Vegas Sands (LVS) were some of the initial "lockdown losers" that never really recovered, but other stocks that were initially viewed as "lockdown winners" are also on the list like Netflix (NFLX), Meta (META), Spotify (SPOT), and Zoom Video (ZM). Go figure.
> Boeing (BA) and Intel (INTC) have been two of the biggest losers since pre-COVID with declines of more than 56%. Other "blue chips" that have been crushed since the pandemic hit include Biogen (BIIB), Citigroup (C), General Electric (GE), Verizon (VZ), 3M (MMM), Square (SQ), Disney (DIS), Adobe (ADBE), and salesforce (CRM). It's interesting that there's representation from nearly every sector of the economy on this list. The only sector that's NOT included is Energy, which is crazy since the sector was one of the hardest hit in the early days of COVID as the price of oil even went negative for a day.
> Of course, COVID isn't the reason why all of these large-cap stocks are now down so much since the pandemic began, but the performance numbers are the performance numbers, and there's no getting around it. Management at big travel & leisure companies have always wished COVID never happened, but more and more companies in sectors like Tech that thought the pandemic might be a game-changer for them in a positive way are now staring at big 2+ year declines thinking "what the hell just happened."
> ###### **([CLICK HERE FOR THE CHART!](https://media.bespokepremium.com/uploads/2022/09/pandemiclosers.png))**
*****
Here are the most notable companies reporting earnings in this upcoming trading week ahead-
*****
> * (**T.B.A. THIS WEEKEND.**)
*****
###### **([CLICK HERE FOR NEXT WEEK'S MOST NOTABLE EARNINGS RELEASES!](https://i.imgur.com/6zs87jB.jpg))**
###### **([CLICK HERE FOR NEXT WEEK'S HIGHEST VOLATILITY EARNINGS RELEASES!](https://i.imgur.com/FZ7DshT.png))**
###### **([CLICK HERE FOR MONDAY'S PRE-MARKET NOTABLE EARNINGS RELEASES!]())**
(NONE.)
*****
Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:
*****
> # ***Monday 9.26.22 Before Market Open:***
> ###### ([CLICK HERE FOR MONDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!]())
(NONE.)
> # ***Monday 9.26.22 After Market Close:***
> ###### ([CLICK HERE FOR MONDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
(NONE.)
*****
> # ***Tuesday 9.27.22 Before Market Open:***
> ###### ([CLICK HERE FOR TUESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!](https://i.imgur.com/e72E0eU.png))
> # ***Tuesday 9.27.22 After Market Close:***
> ###### ([CLICK HERE FOR TUESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!](https://i.imgur.com/G9KvsN7.png))
*****
> # ***Wednesday 9.28.22 Before Market Open:***
> ###### ([CLICK HERE FOR WEDNESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!](https://i.imgur.com/JvImAw9.png))
> # ***Wednesday 9.28.22 After Market Close:***
> ###### ([CLICK HERE FOR WEDNESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!](https://i.imgur.com/n93o18Z.png))
*****
> # ***Thursday 9.29.22 Before Market Open:***
> ###### ([CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!](https://i.imgur.com/PbFqh6U.png))
> # ***Thursday 9.29.22 After Market Close:***
> ###### ([CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!](https://i.imgur.com/OPA7S3z.png))
*****
> # ***Friday 9.30.22 Before Market Open:***
> ###### ([CLICK HERE FOR FRIDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!](https://i.imgur.com/ZYlvCTx.png))
*****
> # ***Friday 9.30.22 After Market Close:***
> ###### ([CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
(NONE.)
*****
> # (T.B.A. THIS WEEKEND.)
**(T.B.A. THIS WEEKEND.)** (T.B.A. THIS WEEKEND.).
> #([CLICK HERE FOR THE CHART!](https://charts.finviz.com/chart.ashx?t=SPY&ty=c&ta=st_c,sch_200p,sma_50,sma_200,sma_20,sma_100,bb_20_2,rsi_b_14,macd_b_12_26_9,stofu_b_14_3_3&p=d&s=l))
*****
# DISCUSS!
What are you all watching for in this upcoming trading week?
*****
I hope you all have a wonderful weekend and a great trading week ahead r/stocks. :)
| 48 |
bigbear0083
| 1,663,978,340 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/xmdo61/wall_street_week_ahead_for_the_trading_week/
|
x02mdo
|
im5tkbc
|
the bounce back time could drag on. there are much better bets
| 23 |
neymarneverdove
| 1,661,712,973 |
3M Earplug Lawsuit: What will be the in store for 3M and what can history teach us?
|
3M is being sued for manufacture of faulty ear plugs leading to hearing loss amongst veterans. Currently there are approximately 270,000 individuals seeking damages.
So far,16 bellweather cases have gone through trial. In 6 cases, the judge ruled in favor of 3M (no payout). In 10 cases, the judge ruled in favor of the plaintiff (1.1 million to 77 million).
Miller and Zois, the law firm representing some of the veterans, estimate settlement payout between 25,000 and 300,000 dollars. Assuming 25,000 payout per case, that adds up to 6.7 billion. In addition, an unknown portion of those effected may opt out of any settlement, preferring to pursue their individual case especially given the large sums awarded in the bellweather cases.
Now, I want to look at the Roundup lawsuit because this is another case where a product (a herbicide trade-named Roundup) has harmed consumers (causing cancer). The first case was filed in 2015. Bayer, the parent company of Monsanto (producer of Roundup), has paid out over 11 billion dollars since to settle 80% of the approximately 100,000 initial cases. However, with new individuals joining in daily, it was confirmed in a Bayer earnings call that 31,000 suits remain active in 2022.
My take on the 3M situation is that this is not over even if a settlement is reached this year. Those who believe they are entitled to high payout will forge ahead with individual suits. Taken together, the earplug debacle will weigh on 3M stock well into 2023 (they tried to escape punishment by declaring bankruptcy of their earplug subsidiary but it failed). Now enough with the negatives lets look at the positives.
NHL (non Hodgkin's lymphoma) is an aggressive cancer that is fatal in 40% of cases within 10 years. Millions were exposed (essentially unknown maximum number) and Bayer is on the hook every time another exposure turns into NHL. With the 3M situation, we know 300,000 were exposed before the earplugs were pulled. Therefore, 3M does not have this massive tail risk of new cases constantly cropping up.
History seems provide context that 3M will move on from their earplug debacle in 2023 (they are working towards settlement this year and I have no reason to believe otherwise). They are a solid company and at this price is an absolute steal.
| 38 |
Longjumping_Rip_1475
| 1,661,712,022 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/x02mdo/3m_earplug_lawsuit_what_will_be_the_in_store_for/
|
x02mdo
|
im6pomf
|
Why is it a steal at this price when the P/E is 18 and they don't seem to be growing earnings much?
| 13 |
Confirmation__Bias
| 1,661,726,577 |
3M Earplug Lawsuit: What will be the in store for 3M and what can history teach us?
|
3M is being sued for manufacture of faulty ear plugs leading to hearing loss amongst veterans. Currently there are approximately 270,000 individuals seeking damages.
So far,16 bellweather cases have gone through trial. In 6 cases, the judge ruled in favor of 3M (no payout). In 10 cases, the judge ruled in favor of the plaintiff (1.1 million to 77 million).
Miller and Zois, the law firm representing some of the veterans, estimate settlement payout between 25,000 and 300,000 dollars. Assuming 25,000 payout per case, that adds up to 6.7 billion. In addition, an unknown portion of those effected may opt out of any settlement, preferring to pursue their individual case especially given the large sums awarded in the bellweather cases.
Now, I want to look at the Roundup lawsuit because this is another case where a product (a herbicide trade-named Roundup) has harmed consumers (causing cancer). The first case was filed in 2015. Bayer, the parent company of Monsanto (producer of Roundup), has paid out over 11 billion dollars since to settle 80% of the approximately 100,000 initial cases. However, with new individuals joining in daily, it was confirmed in a Bayer earnings call that 31,000 suits remain active in 2022.
My take on the 3M situation is that this is not over even if a settlement is reached this year. Those who believe they are entitled to high payout will forge ahead with individual suits. Taken together, the earplug debacle will weigh on 3M stock well into 2023 (they tried to escape punishment by declaring bankruptcy of their earplug subsidiary but it failed). Now enough with the negatives lets look at the positives.
NHL (non Hodgkin's lymphoma) is an aggressive cancer that is fatal in 40% of cases within 10 years. Millions were exposed (essentially unknown maximum number) and Bayer is on the hook every time another exposure turns into NHL. With the 3M situation, we know 300,000 were exposed before the earplugs were pulled. Therefore, 3M does not have this massive tail risk of new cases constantly cropping up.
History seems provide context that 3M will move on from their earplug debacle in 2023 (they are working towards settlement this year and I have no reason to believe otherwise). They are a solid company and at this price is an absolute steal.
| 38 |
Longjumping_Rip_1475
| 1,661,712,022 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/x02mdo/3m_earplug_lawsuit_what_will_be_the_in_store_for/
|
x02mdo
|
im68u60
|
I can tell you it’s incredible difficult to get in on the class action
| 5 |
alumpenperletariot
| 1,661,719,339 |
3M Earplug Lawsuit: What will be the in store for 3M and what can history teach us?
|
3M is being sued for manufacture of faulty ear plugs leading to hearing loss amongst veterans. Currently there are approximately 270,000 individuals seeking damages.
So far,16 bellweather cases have gone through trial. In 6 cases, the judge ruled in favor of 3M (no payout). In 10 cases, the judge ruled in favor of the plaintiff (1.1 million to 77 million).
Miller and Zois, the law firm representing some of the veterans, estimate settlement payout between 25,000 and 300,000 dollars. Assuming 25,000 payout per case, that adds up to 6.7 billion. In addition, an unknown portion of those effected may opt out of any settlement, preferring to pursue their individual case especially given the large sums awarded in the bellweather cases.
Now, I want to look at the Roundup lawsuit because this is another case where a product (a herbicide trade-named Roundup) has harmed consumers (causing cancer). The first case was filed in 2015. Bayer, the parent company of Monsanto (producer of Roundup), has paid out over 11 billion dollars since to settle 80% of the approximately 100,000 initial cases. However, with new individuals joining in daily, it was confirmed in a Bayer earnings call that 31,000 suits remain active in 2022.
My take on the 3M situation is that this is not over even if a settlement is reached this year. Those who believe they are entitled to high payout will forge ahead with individual suits. Taken together, the earplug debacle will weigh on 3M stock well into 2023 (they tried to escape punishment by declaring bankruptcy of their earplug subsidiary but it failed). Now enough with the negatives lets look at the positives.
NHL (non Hodgkin's lymphoma) is an aggressive cancer that is fatal in 40% of cases within 10 years. Millions were exposed (essentially unknown maximum number) and Bayer is on the hook every time another exposure turns into NHL. With the 3M situation, we know 300,000 were exposed before the earplugs were pulled. Therefore, 3M does not have this massive tail risk of new cases constantly cropping up.
History seems provide context that 3M will move on from their earplug debacle in 2023 (they are working towards settlement this year and I have no reason to believe otherwise). They are a solid company and at this price is an absolute steal.
| 38 |
Longjumping_Rip_1475
| 1,661,712,022 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/x02mdo/3m_earplug_lawsuit_what_will_be_the_in_store_for/
|
wqc37h
|
ikltmz5
|
Judges and politicians are *way* cheaper than 100 billion.
| 586 |
another_day_in
| 1,660,703,271 |
3M Co. may face more than $100 billion in losses and potential bankruptcy due to faulty earplugs
|
3M Co. faces more than $100 billion in losses and bankruptcy because of lawsuits brought by veterans who blame their hearing problems on faulty earplugs, according to a litigation consultant hired by lawyers suing the industrial conglomerate.
Initial results from a handful of test cases shows 3M would be swamped by losses should the more than 230,000 lawsuits related to the company’s military earplugs business go forward, the plaintiff’s adviser J.B. Heaton testified in bankruptcy court Tuesday.
“It is more and more likely within the next several years we’ll see a 3M bankruptcy, yes,” Heaton told US Bankruptcy Judge Jeffrey J. Graham during a hearing in federal court in Indianapolis.
“We strongly disagree with this unsupported and clearly flawed speculation,” company communications manager Sean Lynch said in an emailed statement. “3M has committed to provide $1 billion to a trust for claimants determined to be entitled to compensation.”
Some advocates for the suing soldiers want Graham to block 3M from paying any shareholder dividends, buying back any of its stock or spinning off any assets, if the judge also decides to halt the lawsuits.
Restricting how 3M spends its cash will protect money and other assets that could be used to compensate soldiers who have had their hearing damaged by the earplugs, the advocates said in court papers.
The company has a paid shareholders a regular dividend for at least a decade. Currently the quarterly payment is $1.49 per share.
Company lawyers disputed Heaton’s findings during the hearing, arguing that the 19 cases in which juries returned verdicts are outliers and cannot be used to extrapolate results for the other cases. Heaton, a former trial lawyer who now studies corporate litigation, acknowledged that the sample is small and that a judge may conclude $100 billion is not realistic.
3M is in federal court trying to convince Graham to halt the lawsuits while the company’s earplugs subsidiary reorganizes in bankruptcy.
Last month, the company put its Aearo Technologies unit into bankruptcy in Indianapolis as a way to resolve the claims. Under Chapter 11 rules, Aearo is automatically entitled to freeze lawsuits it faces, but because 3M itself didn’t file bankruptcy a judge must agree to give the industrial conglomerate the same protection.
The bankruptcy is Aearo Technologies LLC, 22-02890, United States Bankruptcy Court for the Southern District of Indiana (Indianapolis).
https://finance.yahoo.com/news/3m-faces-100-billion-losses-162828827.html
| 770 |
rockinoutwith2
| 1,660,700,738 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/wqc37h/3m_co_may_face_more_than_100_billion_in_losses/
|
wqc37h
|
ikm46gl
|
>according to a litigation consultant hired by lawyers suing the industrial conglomerate.
He might be exaggerating.
| 259 |
tren_rivard
| 1,660,708,540 |
3M Co. may face more than $100 billion in losses and potential bankruptcy due to faulty earplugs
|
3M Co. faces more than $100 billion in losses and bankruptcy because of lawsuits brought by veterans who blame their hearing problems on faulty earplugs, according to a litigation consultant hired by lawyers suing the industrial conglomerate.
Initial results from a handful of test cases shows 3M would be swamped by losses should the more than 230,000 lawsuits related to the company’s military earplugs business go forward, the plaintiff’s adviser J.B. Heaton testified in bankruptcy court Tuesday.
“It is more and more likely within the next several years we’ll see a 3M bankruptcy, yes,” Heaton told US Bankruptcy Judge Jeffrey J. Graham during a hearing in federal court in Indianapolis.
“We strongly disagree with this unsupported and clearly flawed speculation,” company communications manager Sean Lynch said in an emailed statement. “3M has committed to provide $1 billion to a trust for claimants determined to be entitled to compensation.”
Some advocates for the suing soldiers want Graham to block 3M from paying any shareholder dividends, buying back any of its stock or spinning off any assets, if the judge also decides to halt the lawsuits.
Restricting how 3M spends its cash will protect money and other assets that could be used to compensate soldiers who have had their hearing damaged by the earplugs, the advocates said in court papers.
The company has a paid shareholders a regular dividend for at least a decade. Currently the quarterly payment is $1.49 per share.
Company lawyers disputed Heaton’s findings during the hearing, arguing that the 19 cases in which juries returned verdicts are outliers and cannot be used to extrapolate results for the other cases. Heaton, a former trial lawyer who now studies corporate litigation, acknowledged that the sample is small and that a judge may conclude $100 billion is not realistic.
3M is in federal court trying to convince Graham to halt the lawsuits while the company’s earplugs subsidiary reorganizes in bankruptcy.
Last month, the company put its Aearo Technologies unit into bankruptcy in Indianapolis as a way to resolve the claims. Under Chapter 11 rules, Aearo is automatically entitled to freeze lawsuits it faces, but because 3M itself didn’t file bankruptcy a judge must agree to give the industrial conglomerate the same protection.
The bankruptcy is Aearo Technologies LLC, 22-02890, United States Bankruptcy Court for the Southern District of Indiana (Indianapolis).
https://finance.yahoo.com/news/3m-faces-100-billion-losses-162828827.html
| 770 |
rockinoutwith2
| 1,660,700,738 |
3m
|
stocks
|
https://www.reddit.com/r/stocks/comments/wqc37h/3m_co_may_face_more_than_100_billion_in_losses/
|
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