5/17/24 - vrockstar - 
NICE - still wrapping my hands around the asset itself (so will re-engage in the coming weeks/ or next Q on a more nuanced view). however, the key question i'm asking are a few things
1) is it growing above *real* inflation which is probably DD, at least in the terminal? "yes" is the answer - 15% and confirmed by the recent print + guide. check
2) how does valuation look v. peers? nearly 4x sales at this pt w/ mid teens compounding growth and now 18x PE. is 18x PE fair for a 10bn size co growing at this rate of 20%? probably cheap. stock *has* sold off.
3) so then, what's the rub/ what's the downside here? let's imagine a trough multiple of 15x (again this is a. high mgn b. cloud c. gaining share) on the mid pt of '24 and '25 PE (I've done similar on glob to meet in the middle of many mkt expectations/ time horizons). that's a 15x on $11 which is roughly 1165/SHR stock. I think that's the minimum and frankly don't think we go there outside a general risk puke and in which case it's not fundamental anyway.
4) we could argue about upside from here, but when you consider the low multiples v peers, the CAGR on revenue/ EPS... needless to say all else equal this is a 15-20% annual compounder. so unless it's broken, we're looking to time entry/ map out drawdown more than pick short term price targets, esp given the recent px action.
5) i've been wrangling this all day y day and today, lightening up on small pops, going larger on bigger drawdowns. i'm at 100% of my desired size, which is currently about a 3.5% position in my book. i'd be willing to take this to 5% should we get to the low $180s. that's the swing for me and i'd lighten that up >$200 (that incremental stake).
6) these are the co's (NICE that is) that can acts as a pseudo risk on but w/ managed downside. the majority of the mkt remains v expensive for simila growth. and again i'm not downplaying the ceo leaving, but this doesn't change much in the immediate term. let's see where the dust settles as we head into 2H. it's a v rentable stock too if you're looking for income at key levels. e.g. 6/21 200C's will print you 44/SHR from current levels. i'd personally not give that upside given the above logic. however, it's an option for locking in a better basis at this pt heading into next wk.
be safe. gl to all. leave a comment if you agree/ disagree.
NICE - still wrapping my hands around the asset itself (so will re-engage in the coming weeks/ or next Q on a more nuanced view). however, the key question i'm asking are a few things1) is it growing above *real* inflation which is probably DD, at least in the terminal? "yes" is the answer - 15% and confirmed by the recent print + guide. check
2) how does valuation look v. peers? nearly 4x sales at this pt w/ mid teens compounding growth and now 18x PE. is 18x PE fair for a 10bn size co growing at this rate of 20%? probably cheap. stock *has* sold off.
3) so then, what's the rub/ what's the downside here? let's imagine a trough multiple of 15x (again this is a. high mgn b. cloud c. gaining share) on the mid pt of '24 and '25 PE (I've done similar on glob to meet in the middle of many mkt expectations/ time horizons). that's a 15x on $11 which is roughly 1165/SHR stock. I think that's the minimum and frankly don't think we go there outside a general risk puke and in which case it's not fundamental anyway.
4) we could argue about upside from here, but when you consider the low multiples v peers, the CAGR on revenue/ EPS... needless to say all else equal this is a 15-20% annual compounder. so unless it's broken, we're looking to time entry/ map out drawdown more than pick short term price targets, esp given the recent px action.
5) i've been wrangling this all day y day and today, lightening up on small pops, going larger on bigger drawdowns. i'm at 100% of my desired size, which is currently about a 3.5% position in my book. i'd be willing to take this to 5% should we get to the low $180s. that's the swing for me and i'd lighten that up >$200 (that incremental stake).
6) these are the co's (
NICE that is) that can acts as a pseudo risk on but w/ managed downside. the majority of the mkt remains v expensive for simila growth. and again i'm not downplaying the ceo leaving, but this doesn't change much in the immediate term. let's see where the dust settles as we head into 2H. it's a v rentable stock too if you're looking for income at key levels. e.g. 6/21 200C's will print you 44/SHR from current levels. i'd personally not give that upside given the above logic. however, it's an option for locking in a better basis at this pt heading into next wk.be safe. gl to all. leave a comment if you agree/ disagree.
Note
Max size here at $174. I could probably push a bit more for a trade in the high $160s, but think you're getting extreme value here at sub 17x PE for a >20% grower, great balance sheet. I'm comfortable w/ the downside to the 160s b/c at this pt the upside is now 2-3x just on basic math. I still *mind* the friday/ risk off event for jobs which could send this wicking to a DIRTY low price where we could probably swing for some big gains, so keep a bit of ammo if/as for many other oppties too.Like it here. LMK what you think. Enjoy
V
Note
*the upside is 2-3:1 i should specify (not 2-3x your $ lmao). just to be clear. R/R looks massively biased to the upside in the YE contextNote
"Updating" this one too to flag where we're at. Have been trading around my size, but am adding here.1) the event + recent events bring a sized up buyback
2) 15x PE (or 14x on cash-adj. basis) for 22% EPS cagr, no trough year, highly profitable, no dilution issues (as mentioned above)
3) israel geo probably the fly in ointment - sounds like this is why it's trading at discount in last number of months. just a lot of uncertainty there and potential disruption to biz etc. if sheet escalates.
downside limited in a rich tape. if we march higher, this will outperform bc of fundamental merits. R/R still great.
speaking of R/R... still holding/ sizing up
ZM swing trade. go read that one.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.