5/9/24 - $gen - buying a dip, but has to be sub $17, eyes out
5/9/24 - vrockstar - b2b's are getting squashed (software generally), and i don't like the long setup into this print so if beats/ stock rips... you don't lose by not participating (beyond the oppty cost)
that said, i LOVE the idea of dip buying here b/c of healthy growth profile, reasonable 5-6x sales (not excellent, but not to stay away from), the 10x PE needs to be adjusted for monster debt (which is "fine" for a cash generator), but the real pro forma is closer to 20x which isn't great in this tape. genuinely like the biz, don't love the capital stack. looking to enter nearer to the gap fill territory of $18 but b/c of the debt that limits the benefit of buying -12-15% here (which means the enterprise value only falls by half of this), i'd need a target of closer to mid teens so call it less than $17 to start buying, and i'm starting to size up below $16 to sell some C's off the top. curious if anyone has a more nuanced POV here
that said, i LOVE the idea of dip buying here b/c of healthy growth profile, reasonable 5-6x sales (not excellent, but not to stay away from), the 10x PE needs to be adjusted for monster debt (which is "fine" for a cash generator), but the real pro forma is closer to 20x which isn't great in this tape. genuinely like the biz, don't love the capital stack. looking to enter nearer to the gap fill territory of $18 but b/c of the debt that limits the benefit of buying -12-15% here (which means the enterprise value only falls by half of this), i'd need a target of closer to mid teens so call it less than $17 to start buying, and i'm starting to size up below $16 to sell some C's off the top. curious if anyone has a more nuanced POV here