We have updated our view of Elbit Systems, accounting for the impact of IMI Systems and new announced orders on operating leverage and non-GAAP EPS. We hit on the key points that we believe will move the stock in 2018 based on how the stock has historically traded. Attached is an updated 13-page powerpoint presentation on the key issues that will affect Elbit’s adjusted EPS and valuation. All subscribers can access our full financial model. While our target is $130, but we see upside up to $134 based on 20x our 2019 non-GAAP EPS of $6.72. We believe upside is […]
Forecast Adjustment
18 posts
We have outlined overlooked issues on Spotify (SPOT-NYSE) in 20 easy to follow (or pitch) slides. These slides include: – Subscriber valuation graphs, correlations and tables – Tracking of Global top streams and their relationship with Premium Subscribers – How different plans, regions and promotions affect ARPU – Revenues for both the music and digital music industries – Financial forecasts on a number of metrics – Comparable metric comparison versus Pandora – Subscriber Comparable tables with Netflix, SiriusXM, Pandora and Spotify – Stock Recommendations
We have completed a holistic overview of Canada’s recreational cannabis market. Based primarily on data from Colorado as well as taking into account capacity increases from Canada’s lowest-cost producer, we have a materially different assumption on future market prices and demand. Attached is our overview of the industry. All graphs used are sourced from either the State of Colorado, BDS, Provincial government press releases or BDS Analytics.
Based on the latest Alibaba unique visitor data for Tmall and Taobao, we have lowered our fiscal Q4 2018 estimate for online marketing service revenue from $3.97 billion to $3.82 billion. We now expect pageviews to be up 3.5% Y/Y in fiscal Q4 versus up 14% Y/Y last quarter. The end result is our total revenue forecast in fiscal Q4 decreasing from $9.56 billion to $9.41 billion. We still see the full year 2018 revenue ahead of guidance (beating it by 1.4%). Revenue growth we now see as being up 54.9% Y/Y versus up 56% in fiscal Q3/18. Our adjusted 2018 EPS moves up […]
With contributions from Robin Manson-Hing. We have completed our quarterly analysis of Salesforce’s major product lines and have seen some changes on where Salesforce sits in relation to its competition. This analysis does not include MuleSoft’s Anytime Platform or MuleSoft’s impact to Salesforce’s financials. Market position for Sales Cloud and Marketing Cloud moves lower – We track CRM’s market position every quarter using a market competitiveness model. Over the last quarter, we found Sales Cloud and Marketing Cloud to have moved lower since our last report primarily due to lower interest in their solutions. While the price hike for Sales Cloud two years ago has been […]
Examining Paycom (PAYC-NYSE) taking a full ‘retrospective adoption approach’ to adopting the new ASC 606 standard, their restating of adjusted EBITDA has driven us to update our EV/EBITDA forecast model. The new standard allows Paycom to defer a materially larger than industry average portion of their sales commissions over the lifetime of its customers. This has caused adjusted EBITDA for 2017 to now be $186 million versus $137 million previously. Our new function involves seven public payroll SaaS companies that have produced an r-squared of 0.863 in forecasting the current EV/EBITDA multiple. The end result is our target EV/EBITDA multiple for Paycom has been reduced from 45x to 36x. Our […]
Three Big Takeaways: 1) Net Subscriber Addition Growth – Netflix reported net subscriber guidance 32% better than their guidance and even surpassing our aggressive estimates by 3%. As we noted in our past two notes, we expected net subscriber additions to blow past the low guidance Netflix set for itself and that the stock would likely surpass all expectations for it. 2) U.S. Price Increases Combined with Strong Net Subscriber Add Guidance – In terms of guidance, U.S. revenue and total paid members imply that Netflix is expecting well over a 6% Q/Q increase in average revenue per subscriber in […]
We have updated our forecast to more accurately account for expected operating costs in 2018. Hiring at Elbit Systems has steadily increased by 2% to 3% a year over the last few years, much of which has been seen in higher sales and marketing costs. We have also added our marketing presentation of Elbit for our subscribers. However our prior estimates we believe likely punished Elbit too severely. We are increasing our non-GAAP EBIT margins from 9.7% to 10.1%. Source: Perspectec Source: Perspectec Source: Perspectec We have also attached an easy to understand powerpoint explaining our view. […]
We have updated our Netflix Q4 net subscriber additions to account for all original programming released up to December 30, 2017. Based on Google Trends historical search data of every Netflix Original relative to its most popular show, 13 Reasons Why, we now estimate that Netflix will add 8.1 million subscribers in Q4 2017 vs. management’s guidance of 6.3 million net subscriber additions. This will be the third straight quarter Netflix will beat its guidance, putting net subscriber additions for the end of 2017 at 23.6 million, up 24% from the end of Q4 2016. The following recaps the foundation of our proprietary multiple linear regression […]
Aphria is set to release their fiscal Q2/18 results (quarter ending November 30) around the middle of January. As is normally the case, there is not expected to be a press release of results or an earnings conference call. Stock Prices Has Been Going Up After Quarterly Reports – Aphria has seen its share price increase 14% and 2% the day after reporting its last two quarterly results. Fiscal Q4 (quarter ended May 2017) saw cash costs reach a Canadian industry low of $0.79 per gram by competitors’ definition ($1.11 by Aphria’s definition) and a 181% Q/Q increase in EBITDA […]
Elbit Systems Ltd. (NASDAQ: ESLT) is set to announce their third quarter 2017 results on Tuesday, November 14, 2017. Q3/17 marked the 3rd consecutive quarter of increasing orders for Elbit, reaching record levels according to our estimates. The stock is up 4% since reporting a $300 million Command and Control Asia-Pacific order. This is off the back of a $240 million order from an African country for land and anti-ground solutions announced the day before. Years of overspending (as a percentage of revenue) in R&D is finally paying off for the company with increased spending on border security and land […]
Netflix reported better than consensus net subscriber additions that were generally anticipated by the market with the run-up in NFLX prior to the Q3/17 report. Netflix remains in a class with NVIDIA as the only large ‘tech’ companies able to raise prices and still see increasing demand of its products. Q3/17 results were in-line with our expectations. In particular, net subscriber additions were 5.3 million versus our forecast of 5.2 million and in comparison to the guidance of 4.4 million. Q4 guidance for net subscriber additions was 6.3 million versus our estimate of 7.4 million, but as we talked about in our preview, we […]
With contributions from Saif Shah Medical marijuana licensed producer Aphria (APH.TO) reported in-line revenue and EBITDA. Below are APH’s fiscal Q1/18 results versus our expectations. Source: Company reports and Perspectec An unrealized gain with upside – Results were very much in-line with our expectations up until “unrealized gain on long-term investments”. Aphria has used the $200 million+ investor funds raised not only for it’s Leamington greenhouse expansion but also for a number of <20% ownership positions in public (Level 1) and private (Level 3) marijuana companies. APH’s long-term investments would have decreased in value the last three months if it wasn’t for their […]
Aphria is expected to report its fiscal Q1/18 (three months ended August 31st 2017) results tomorrow. Below are our expectations for results: Q1/18 Forecast Kilograms sold should continue to track (and maybe beat) revenue growth After a low cash cost per gram of $1.11 last quarter, we believe Aphria will be able to maintain and see no major movement in cash costs We expect a slow down in EBITDA from last quarter but still enough to make it Aphria’s eighth consecutive quarter of positive EBITDA We believe investors should continue buying Aphria’s shares up until about $8. We are maintaining our […]
We have updated our Netlfix Q3 net subscriber additions to account for end of month demand. Using Google Trends historical search data of every Netflix Original relative to its most popular show of all-time, 13 Reasons Why, we now estimate Netflix will add 5.15 million subscribers in Q3 2017 versus our previous estimate of 5.3 million subscribers. Prior to the T-Mobile announcement partnership announcement we had expected Q3 Netflix net subscriber additions to be 4 million, short of its Q3 guidance of 4.4 million net subscriber additions. The following recaps the foundation of our proprietary multiple linear regression forecast model: Systematically categorizing and […]