Post Spotify’s (SPOT-NYSE) Q1/18 earnings report and Q2/18 guidance, we have updated our Spotify subscription valuation model. Our target price is based on a relative valuation versus Netflix, SiriusXM and Pandora. Our model has a multiple r-squared of 0.997 and p-values for both factors of under 0.09. We value Spotify at $104/share. The actual function calculates the market capitalization,which is based on 3x CLTV TTM + 44x TTM CLTV added. Our updated model now better accounts for a profitable but slower growing userbase at SiriusXM as well as tempering some of the quarterly volatility in TTM CLTV added for Spotify and Pandora. The volatility […]
Results & Outlook
7 posts
WIth contributions from Xenel Nazar. Elbit reported Q4 results on Tuesday, March 20th. The financial results were in-line with our expectations. Financial Model Impacts – Gross margin in 2018 should be similar to the last 4 to 6 quarters. _”So without giving you specific guidance, I think if you look back on what has happened in the last 4 to 6 quarters on average, that may be something that could be representative of the future.”_ – General & Administrative expense in Q4 could again occur, although likely by lesser amounts. _”I note that during 2017, and particularly during the fourth quarter, […]
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 […]
Elbit Systems Ltd. (ESLT-NASDAQ) reported their third quarter 2017 results on Tuesday, November 14, 2017. In this piece we discuss how the timing of deals signed by Elbit impacted the quarter. We also provide a forecast for the upcoming quarter based partially on signed deal timing. Q3/17 Results Record gross margins helped make up for lower than expected revenue. Source: Perspectec Revenue was off a little – Elbit saw revenue come in about 2% below our estimates. Y/Y growth of about 3% was slightly below that of other defense contractors such as Lockheed Martin (5%) and Raytheon (4.5%). Contract falls off […]
Paycom’s Q3 results and Q4 guidance was generally in-line with expectations, with revenue produced per sales person in a mature office increasing 2% Q/Q versus our expectations of 4% Q/Q after accounting for seasonality. EBITDA beat on a greater portion of R&D being capitalized than normal and lower than expected G&A expense due to improving efficiency. The company has joined the 30/30 party (30% Y/Y sales growth and 30% EBITDA margins) with an invitation list of one. Q3/17 Results and Q4/17, 2017 and 2018 Forecasts Source: Perspectec and Company Reports Conservative Guidance: As was the case in each of Paycom’s prior quarters since […]
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 […]
Nice beat – Netflix is up 13% since reporting Q2 results and its Q3 outlook Monday night. The price is up primarily due to reporting net subscriber additions that were materially higher than their guidance. Traditional Financial metrics were inline – The income statement was generally inline with our estimates and market consensus. Q2 Sales were $2.79 billion (beat our estimates by less than 1%, but was up 32% Y/Y), operating margin was 4.6% (vs. 3.3% last year and 9.7% last quarter due in large part to the shift of House of Card’s costs to Q2). Diluted EPS of $0.15 was inline with estimates. Free […]