FCF

SwellsInMoisture

FinViz returns: market cap, P/E, P/S, P/B, P/FCF, and Dividend. YFinance returns: stock repurchases, stock sales, EV/EBITDA. So no scraping needed outside of those.

le_bib

Excluding impairments and gain/loss of investments. Check FCF/share for a better grasp: 2019: $4.66. 2020: $5.21. 2021: $5.52. 2022: $5.40. 2023: $5.75.

Purple-Leopard-6796

Huh? P/FCF (for SLOW growth companies!) Costco  55 Walmart 32 Starbucks 22 SO you saying all these companies are OVERVALUED. OR JUST CANNABIS cos? You A SHORT also?  Cover and move on. 

Delavan1185

The odd thing about yelling "not profitable" is that the company is FCF positive. Admittedly it's an older company to IPO and the FCF:MCap ratio is bad, but the user growth is promising. Bigger issue is they clearly aren't doing a lot to monetize the user base - ARPU is like $3, which is comparable to SNAP now, 30-50% of PINS, and is FB like 12 years ago. If they can milk us degenerates for more money, they will do well.

CannaVestments

A good start to 2024 from Cresco Labs as efficiency improvements and cost reductions executed at the end of 2023 carried into the new year. While the top-line remains stagnant, Cresco has significantly reduced their cost profile (SG&A down $18M from 1 year ago) and significantly expanded margins, all leading to better cash flow generation. Looking ahead, Cresco has a max footprint in Ohio (5 stores and a Level 1 grow currently), the first state adult-use conversion in some time that Cresco will have exposure too, offering an opportunity for a return to top-line growth in addition to FL and PA potentially in the years to come. Comparison to Q4: **Revenue:** Q4 $188.2M to Q1 $184.3M *2.1% decline was slightly better than expected ($183M), and was down 5.1% from 1 year ago (flat YOY if you exclude divestitures). No new assets during the quarter or expected near-term, so growth will be muted until Ohio rec turns on in June of this year (where Cresco has a max footprint of 5 stores and the larger Level 1 grow), with FL and PA offering optionality down the line. No breakdown of retail:wholesale this quarter oddly.* **Adjusted EBIDTA**: Q4 $54.8M to Q1 $53.2M  *Modestly down here in-line with top-line decline and well ahead of consensus ($47M). Margin roughly flat at 29.1% in Q4 and 28.9% in Q1- $4.5M in one-time adjustments and $4.2M in SBC in this figure. This was up 82% from the $29.3M posted 1 year ago, reflecting the tremendous strides Cresco has made in improving their margin profile through efficiency improvements despite no top-line growth.* **Gross Margins:** Q4 51.1% to Q1 50.0% *Slightly down qoq but still at a strong level, and up from 44.2% posted 1 year ago.* **Operating Income:** Q4 $27.1M to Q1 $29.2M *Increase here as OpEx decline more than offset marginally lower gross profit.* **Operating Expenses:** Q4 $69.0M to $63.0M *Really good cost control, with OpEx as a % of revenue dropping further from 36.6% in Q4 to 34.2% in Q1- a very lean figure. SG&A was down almost $18M from 1 year ago- an impressive improvement.* **Operational Cash Flow:** Q4 -$3.3M to Q1 $36.5M *Big swing into the positive here although Q1 typically doesn't have a tax payment so will have to wait for full financials to be released. CapEx was just $3M for FCF of $33M. Lookout for the payout to non-controlling interest holders when the full financials are out.* **Cash:** Q4 $108.5M to Q1 $128.2M *Again no financials yet but looks like positive OCF was offset by CapEx spend and a $11M drag in financing activity (likely the non-controlling interest holders payout). Debt stands at $405M.*

Fuego1050

Fundamentals - every top company in the MSOS etf produced positive FCF in Q1 and met or beat expectations. The short thesis is broken - MSOS will grind higher

BadaBingSil

I used GPT4o to analyze GME like a wall street analyst |Quarter|Revenue|EBITDA|FCF|Mkt Cap|P/S Ratio| |:-|:-|:-|:-|:-|:-| |Q1 2022|$1.38b|-$28.8m|-$225.5m|$9.0b|1.75| |Q2 2022|$1.16b|-$40.1m|-$496.3m|$8.3b|1.61| |Q3 2022|$1.30b|-$41.1m|-$188.0m|$7.4b|1.44| |Q4 2022|$1.38b|-$24.2m|-$800.0m|$6.6b|1.27| |Q1 2023|$1.24b|$32.0m|-$98.0m|$5.5b|1.08| |Q2 2023|$1.16b|$27.0m|$491.0m|$5.8b|1.14| |Q3 2023|$1.20b|$45.0m|$580.0m|$6.0b|1.20| |Q4 2023|$1.25b|$18.0m|-$257.0m|$5.3b|1.09| |Q1 2024|$1.18b|$38.0m|$83.0m|$6.0b|1.25|

WilliamBlack97AI

If you open the press release, it actually says much more than losses/profits such as the notable progress they have made in every field in which they operate. If you focus only on the numbers, which do not always provide an accurate future guide, go to sedar. Personally, I am satisfied with the triple-digit growth y/y, and the achievement of positive EBITDA, despite the continuous difficulties and adversities in the sector. This shows a real demand for their products. In any case, I expect an FCF+ by the end of the year and profitability in Q4, as stated several times by the CEO in various calls

Jeff__Skilling

>My understanding is that both holders benefit from a rise in share price, but preferred owners get a fixed dividend while common holders do not. No, not at all? Prefs don't fluctuate in value nor do they have the unlimited upside that common shares do; upside is capped, generally at the original price they were issued at. The advantages they have over common stock have largely been mentioned: (1) higher up in the surety stack / have liquidation preference in the case of bankruptcy and (2) have priority over common in terms of dividend -- e.g. company cuts dividend to $0.00, and if they want to make a distribution, they usually have to pay off whatever prefs are owed in arrears (usually some % of the fact value of the preferred share stated in the original term sheet) before a penny goes to common. That all being said, it doesn't really answer your original question as to why would anyone ever buy common stock over preferred (aside from the aforementioned difference in upside potential). Really, the only case where I see prefs in a client's cap table is (generally) in situations where common equity has maxed out total leverage on a potential deal / transaction / project (almost always very project finance-y) and you need capital or are underfunded to whatever degree or dollar amount. In these situations, common equity can't use debt, and they refuse to dilute themselves (by giving up more common), so the answer ***generally*** is you shop the available spot in the financing syndicate to a bunch of private credit shops, infrastructure funds, SWFs, and PE funds that wants the (debt-like) cash yield and risk exposure by in the project......but you've hit your leverage ceiling + these potential capital providers don't want to cripple some long-dated project (e.g some greenfield mining project or nuclear energy facility or interstate pipeline) by overburdening it with additional fixed cash interest obligations (since most of these projects won't start generating organic FCF for anywhere from 6 to 20 years) or in the early operating phases of said project where cash flow starts to trickle out in the first few years of operations (usually E&P related, both energy and mining). So what ends up happening is common equity negotiates a very tailored and bespoke pref term sheet that can have a whole host of different features that keep the project fully financed without over-levering or overly constraining early FCF (that might result in missing an interest payment and defaulting) The most common examples I can think of are (a) common usually has the option to make mandatory distributions to preferred in kind (PIK) (and usually at higher rates than what they'd be do if distros are paid in cash) or (b) including a common conversion feature (that can get endlessly onerously convoluted).

Resi86

Interesting assumptions. I disagree. - Florida adult use is not baked into Trulieve’s valuation: FCF for Q1 of $74m (after subtracting the $50m irs refund), back of the napkin annualized to ~$300m. EV of ~$2.6b (mc $2.2b, $327m cash, debt $482, uncertain tax position of $278m). Undervalued - You are making an assumption that pharmacies will step in and compete following schedule 3?? Very big unknown. Several variables: will there be a Garland memo, will States rights be upheld (FL requires vertical integration also), etc. Even if these assumptions are accurate, it would only affect retail and not wholesale/cpg (which Trulieve has economies of scale and unmatched efficiencies). - Trulieve’s balance sheet is fine. $40m loss sucks, but they will be more than ok - the last point you made was too incoherent for me to interpret The end.

Resi86

Trulieve will be far from a world of hurt. They hold over 1/3 share in a $2b high margin medical market. Did you see their most recent earnings?? FCF like crazy. I don’t think you know how unbelievably efficient and dominant their business is

but_why_doh

No, it was market value of the investments. They own equity investments in multiple companies, and those companies increased in value a ton a year ago, but they declined this quarter, and this made net income look a LOT worse than it actually was. It's like Berkshire. They own investments in public companies, and when those investments decline in value, Berkshire net income declines. Doesn't mean the company is earning less, as cash from operations remains the same, but their net income is down. Look at operating income. Usually, it's a better indicator of the actual state of the business. FCF is also a strong indicator of whether a business is doing well, but sometimes FCF is all over the place.

Fond_Memory

If you think 5.2% FCF yield is good you should check out 3 month treasury notes. They're yeilding 5.38% 

le_bib

Not really. Boeing has been losing money for years and INTC is barely profitable. An example of a mature cheap business would be BTI (BATS.L) which steadily increases EPS but trades at book value, 7p/e, 7 EV/Ebitda and 8 FCF/share

The-Noticing

AWS is old news. 3P, ads, and subscription services are contributing towards profitability considerably. $70B in FCF by year end.

creemeeseason

You make great points, and I definitely concur that my thought exercise was oversimplified for real world application. It was more meant to be just thinking about if buy backs vs reinvestment have an impact on valuation. Thanks for your math breakdown too. I agree with your assessment, and was actually surprised at the difference when I worked the numbers out. I think your last point is crucial. The market response to the situations would be different. In reality, companies that buyback tons of shares tend to see their multiple expand. Think AZO, AMP, etc. great performers via buybacks, but now they trade at multiples that make large buybacks inefficient. However, companies that grow FCF at 10%+ annually also tend to get expensive, because the market loves growth. So really the fun math would be finding the optimal ratios of buybacks to investment for companies at different valuations....which comes back to the crux of investing long term for me: find management that can effectively allocate capital. I love seeing companies that do a mix of reinvestment and buybacks, particularly at different times. It shows management has a good concept of the value of their actions.

datafisherman

I think you have a good sketch of the problem here, but the discrepancy between the two options shouldn't be so great: it should be mathematically a slight edge for the buybacks. In your example, Company A's multiple is assumed to decline when, in reality, it would likely remain steady (if not rise in the presence of sustained large buybacks). This means you buy FCF at increasingly cheaper rates for Company A ($100 buys *x* shares, regardless of year). This drives the return discrepancy in your example. Where ROIIC ~ FCF yield, as in your example companies, the buyback should prevail by the slightest margin: an infinite sum with the rate (FCF yield) effectively in the denominator, instead of one with the rate (ROIIC) in the numerator. Since [(*n* + 1) / *n*] < [*n* / (*n* - 1)] for any positive integer *n* > 1, the buybacks will always have a slight edge in these back-of-envelope calculations: for clarity, 6/5 < 5/4 < 4/3 < 3/2 < 2/1, and that's why. You have an infinite sum with starting FCF in the numerator and starting shares outstanding in the denominator, and each additional term has either 1 + the growth rate multiplied by the numerator (reinvestment) or the denominator (buybacks), appropriately exponentiated, but otherwise there should be no difference in the terms or overall result. Any discrepancy is illusory anyhow, as the shares would likely appreciate during the repurchase program.

DiversificationNoob

Why should they need a 4 to 10 times battery increase? Joby already showed a 150 miles flight. That should be enough to connect city centers to airports or travel over longer distances in cities. That market should be enough to become profitable (thousand of aircrafts needed that generate $1 million FCF per year) That scaled production is also a great starting point later on if higher capacity batteries allow for intercity tracel.

pl_fanat1c

It feels a little circular but it kind of goes like this for me... If the company is overvalued based on FCF, then you don't want to buy it so buybacks are irrelevant. If it's undervalued you do and if they ever do buybacks that's always a good use of cash. If a bond pays 5% and interest rates are 5%, a $1000 bond should be valued at $1000. But somehow if you could direct the coupons to buy more of itself at $900... you would be getting back even more than if you just got the coupon. Of course this logic breaks down a little when the stock is around fair value. Given the choice you might invest it elsewhere... But at fair value it should return at least your discount rate.

creemeeseason

I think you could compensate via the future cash flow amounts. Let's think it out..... Company A has 0 growth opportunities. Makes $100/year of FCF. And has 100 shares. If they buy back stock with all that cash, they'll still make $100 in year 2, $100 in year 3, 4, and 5. Then they go out of business. So the value of the company is $500, adjusted for whatever discount rate you want (using 0% for this). However the returns would be pretty good for owning the stock. If they reduce share count by 10% annually you'd actually see the share price increase by about 49% via a reduction in share count. (100*0.9^5= 51) So the FCF/share at that point is $1.96 ($100/51 shares). However the market cap hasn't changed. Company B can reinvest in itself at 10% and they grow cash flows at the same rate. They grow FCF at 10% annually. So the $100 becomes $161 of FCF by year 5 (100*1.1^5= 161). FCF/share is only $1.61. However, company B has generated more cash flows to discount to today. They generated $771.51 of cash flows. So basically I guess after all that the buybacks would be better in this case. Especially if the large cash flows of company B are discounted at more than 0%. The power of buybacks at a high rate of return (say less than 10x p/FCF) can more than make up for lack of ROIC, unless you can invest that capital at very high rates. This probably rambles, I'm writing on mobile while cooking, so hopefully it makes sense.

sportingpool

true. and TSMC has done a much better job than Intel. but they cant spend everything they earn for shareholders, continually need to reinvest to stay on top. compare that to Apple. it has earnings/FCF of around 100bn. and can use all of that for buybacks and dividends. its a better business. but its also a little bit unfair. TSMC and Intel have a much harder job to do

Possible_Treacle_814

It’s largest holding too I’m at 57 average. I think the biggest thing I’m excited about with the q1 earning which there was a lot to like was free cash flow. They brought in 1.7B 1.8B if you exclude the BNPL effect. If you look at the last couple years historically and you exclude it one time events FCF has gone up over Q1 Q2/3/4 typically Q1 has been their weakest quarter for FCF. If that trend continues this year which it might not fully- they will completely blow by the 5B FCF guide. I see them getting 5.5-6B easily perhaps higher it’s hard to gauge what level of investments they’re making in fast lane and zoom and others. Still they’re going to massively out perform on that and as you mentioned buyback net of SBC 5-6% AT LEAST this year. And they’re growing I mean 10% fxn revenue growth. I think I’ve realized that Wall Street just thinks over time with competition fintech will be able to charge less and less which is why they get a lower multiple which is fine but PayPal still super undervalued. I’m also in $four which might be worth taking a look at for similarish reasons.

Spongeboob10

As soon as? They’ve already taken stakes and are burning their capital in anticipation. BAT - Organigram Altria - Cronos Group If you’re investing in any other ones, the billions in FCF, decades of regulatory experience, years of legalization discussions, etc. are going to eat your lunch. I expect 1) a legalization 2) shortly after regulatory roadblocks so not everyone can jump into it. Side notes - Phillip Morris isn’t really US based so it’s kind of irrelevant. BAT/Reynolds and Altria are great at burning money on wasteful enterprises - you may be better off buying the above 2 companies’ competitors to get paid through the nose in the consolidation.

dedgecko

Unless you can find something that can replace the stupid simplicity of Apple’s ecosystem, not much will make an impact to the FCF generating monster that is Apple.

AverageStockpicker

Paypal at 25% of portfolio and 10% of net worth (including my house). Single biggest conviction stock I've held since Meta at $115. Literal nobrainer, I'm currently writing a post about in on the value investing sub. The ONLY reason it's not back to $90+ is the technicals and horrible sentiment due to bagholders. The 2020 boom&bust cycle has made the chart absolutely horrible. Doesn't change the fact it's growing revenues 10%, increasing EPS double digit and reducing shares outstanding >5% per year. 10% of market cap is net cash. It's truly wild to see how braindead the market is about this company and I'm scooping up all the shares I can get (I've even considered buying on margin, but won't unless it goes below $60 again, which would put it at 12x FCF at year end). Whenever I get new cash, I buy Paypal. Remindme in one year and you'll kick yourself over not seeing the obvious opportunity here. I'll try to make a full post about them this evening.

fkfjjfysgr

Great question, you should apply a discount rate to your FCF projections that you would be ok earning over time if the cash flow is delivered as expected. So if you want to earn 10% on your investment to take the risk of earnings/or not earning the cash flows you should use that. Companies with less certainty of cash flows should have a higher discount rate. Dividends or share repurchase are just a use of FCF. What matters to the growth of market cap (stock price) is FCF generation. One nuance is share repo the investor pays less taxes than dividends.

MarketLab

Ya, I need to learn more bout stocks. Like in a dcf, why you add PV of FCF to EV when you take the discounted exit multiple after the explicit forecast period. How is that not double counting (ex-divy, spins)?

CannaVestments

Largely in-line Q1 from Terrascend to start the year. Results were right at consensus for both rev/aEBITDA and tax-adjusted cash flow conversion did improve, but margins declined and forecasts for 2024 as a whole were a bit below analyst expectations. In what is becoming a trend for many Q1 reports, TER highlighted wholesale growth in New Jersey and Pennsylvania to help combat declining retail revenues in several markets including New Jersey which has seen a rapid expansion in third-party retailers. Looking ahead, TER highlighted an ongoing expansion of their Maryland cultivation facility and expect wholesale growth in H2 2024, and also mentioned ongoing M&A talks with a potential neat-term announcement. Comparison to Q4: **Revenue:** Q4 $86.6M to Q1 $80.6M *6.9% qoq decline was right in-line with consensus ($81M), and was up 16.1% from 1 year ago. Wholesale growth in New Jersey and Pennsylvania were highlights in the quarter led by expanded product offerings, partially offsetting retail declines in Michigan and New Jersey as more retail competition emerges. No new stores during the quarter but TER did consolidate ownership of 4 California stores from 50% to 100% ownership. Looking forward, flat guidance was given for Q2 and 11-13% YOY growth as a whole which was a bit below consensus expectations. Management did heavily highlight ongoing talks of M&A, including the possibility of transformative deals with a focus on Ohio in particular. They also mentioned the expansion of their Maryland grow and expect it to add to wholesale growth in H2 2024.* **Adjusted EBITDA:** Q4 $19.6M to Q1 $16.2M *17% decline was slightly better than expected ($15M), and up 33% from 1 year ago. Margin declines from 22.6% in Q4 to 20.1% in Q1- fairly average for Tier 2 operators.* **Gross Margins:** Q4 48.2% to Q1 48.0% *Essentially flat at a solid level. Management highlighted a second quarter in a row of 40%+ GMs in Michigan which has historically been a larger drag.* **Operating Income:** Q4 -$41.8M to Q1 $6.1 *Large $56M impairment taken in Q4 and would have been $14.2M w/o so a drop into Q1 as lower gross profits combined with slightly higher OpEx.* **Operating Expenses:** Q4 $87.9M to Q1 $32.7M *Q4 was $31.9M without the impairment so slightly higher here in Q1. OpEx as % of revenue rises slightly from 36.8% in Q4 to 40.6% in Q1.* **Operational Cash Flow:** Q4 $9.4M to Q1 $13.3M *Jump up here, and more importantly turned positive even when adjusting for taxes (including 280e challenged taxes). Tax-adjusted OCF was essentially flat in Q4 and was -$16M for 2023, but was +$4.4M here in Q1. CapEx was $2.8M for FCF of +$10.5M.* **Cash:** Q4 $22.2M to Q1 $25.8M *Positive OCF and $3.1M in new loans offset CapEx spend and $12.2M paydown of another loan facility. Debt stands at $199.8M with their uncertain tax position (relating to the 280e challenge) at $89.5M.*

Fuego1050

Top 5 are all FCF positive. The lack of capital bc no banking has forced all the smaller operations to run with higher prices to stay afloat. This gives the larger scaled companies a massive advantage - and you can see it coming through their earnings. To me - the story is custody. Plain and simple. Exchanges, and then indexes. Right now OTC … so cheap. But - obviously at some point that changes. Its inevitable given how large the industry is.

Fuego1050

Posted great earnings with great guidance. Msos Greenthumb buying back shares with FCF 48mil

Confident-Income

Thanks, will continue assuming all 278M as part of debt. Still nice to see a solid tax adjusted FCF.

SuzyCreamcheezies

For better or worse, I am a Tilray holder. Agreed... Inching closer to FCF.

Cobra25k

In 2022 they had -17 billion in FCF. In 2023 they went from -17 billion to around 32 billion. Thats a 50 billion dollar increase. I think this year they can EASILY double that 32 billion to around 70 - 80 billion. If they do that it would put them trading at around a 3.5% FCF yield. I personally believe Amazon deserves to trade at around a 2.5% FCF yield based on how reliable of a company they are and how predictable their revenue growth is. This would leave considerable upside (roughly around 20% maybe even 30%) with their projected future cash flows even in the short term.

polytaco

Brilliant analysis you gourmet crayon eater By this logic, ABNB should be unprofitable, bleeding money, and laying off staff. None of those things are happening, and the first two things are categorically untrue if you’ve read the bullet points on their latest ER. Q1 rev is up by 18% from the same period last year, net income up by 126%. FCF is $2bn TTM, but yeah sure ooga booga nobody uses airbnb anymore the fucking orangutans on this sub man

CannaVestments

Mixed start to the year for Marimed in Q1. Profitability remains a struggle but growth from 1 year ago was decent, margins were stable, and a lean debt profile means the company continues to tread water in terms of cash flow. Forecasts for the year suggest minor growth, with the caveat that regulatory changes were not included (most notably in Ohio where adult-use is scheduled to come online). Comparisons to Q4: **Revenue:** Q4 $38.9M to Q1 $37.9M *Don't see any analyst forecasts but this was down 2.6% from Q4 but up 10.2% from Q1 2023. Management highlighted wholesale gains in particular, with the edibles kitchen in IL coming online in the quarter. The company forecasted 5-7% top-line growth in the year, not including regulatory changes in markets.* **aEBITDA:** Q4 $5.2M to Q1 $4.7M *Not great here- down 9.6% qoq and down 34.1% from 1 year ago. Management forceasted 0-2% growth for 2024 over the $24.7M posted in 2023 (again not including regulatory changes). Margin drops from 13.4% in Q4 to 12.4% in Q1- not great.* **Gross Margin:** Q4 44.5% to Q1 43.4% *Down to start the year- not bad, but not good either relative to peers.* **OpEx:** Q4 $14.9M to Q1 $14.5M *Decent cost control- OpEx as a % of revenue flat at 38.3% in Q4 and 38.2% in Q1.* **Operational Cash Flow:** Q4 $3.2M to Q1 $3.2M *Flat here although tax-adjusted OCF was $2.8M in Q4 and $1.4M here in Q1. CapEx was $3.4M in Q1 for FCF of -$2.0M, with FY 2024 CapEx projected at $10M.* **Cash:** Q4 $14.6M to Q1 $15.2M *Slight rise as positive OCF and a bit of new mortgage funds was partially offset by CapEx*

Confident-Income

Though you can think of it in context of EV/EBITDA multiples. Every $ of FCF that goes into cash, paying down debt, or stock buybacks decreases the EV and strengthens the valuation of the company.

DoobsNDeeps

The consensus is below mgmts guidance, so if they hit, that $4.60 will be well off. Also their capex has been below depreciation, so there's more cash flow there than just EPS. Also FCF conversion should improve as they've already paid down their liabilities below normalized levels. While they're definitely tight on the dividend, their cash flow should cover it. The big issue is debt maturities in 2026, which could hit hard if rates are still high. In the longer run, capex will need to pick up, so would need margins to come back to cover that. Their expenses are artificially high on restructuring, so there is reason to believe margins could come back better than expected. It has risk, but I do think there'scomoensayion for that risk.

Confident-Income

Was waiting to see that capex number drop. If the mgmt guide pans out, that's $120M of additional FCF right there. Without the effects of 280e. Crazy. One day the reality of that FCF will hit the stock price. Don't know which day but one day. This is actual intrinsic value the company is generating.

CannaVestments

GTI starts off 2024 extremely strong with results ahead of expectations, improved margins, reduced OpEx, $31M in net income, and an all-time high in cash flow generation. After roughly \~$200M in annual CapEx spend over the last 3 years, GTI guided to $100M in 2024 spend with $15M spent in Q1, focused primarily on new store openings and select capacity expansions in markets like Connecticut and Florida. Q1 OCF was +$84M and FCF at +$69M, growing the cash balance to $224M as they weigh further debt paydown, additional share buy-backs, and CapEx spend. Looking ahead, GTI is well prepared to meet the adult-use initiative in Ohio where they have the current max of 5 stores and a Tier 1 grow at the max capacity allowed by the state in H2 2024, as well as the start of adult-use sales in Minnesota in H1 2025. Potential adult-use opportunities in Florida and Pennsylvania lie ahead as well, with a balance sheet and footprint to take advantage of. Comparisons to Q4: **Revenue:** Q4 $278.2M to Q1 $275.8M *.8% sequential decline was better than expected ($269M), and up 11% from 1 year ago with retail up 7.9% and wholesale up 19.3% during that time. Only 1 new store in FL opened in Q1, with 1 more FL so far in Q2.* **Adjusted EBIDTA:** Q4 $90.8M to Q1 $90.5M *Flat results here was a big beat on consensus ($81M), with margin expanding from 32.6% in Q4 to 32.8% in Q1- likely the highest result of their peer set and up from the 30.6% posted 1 year ago. Adjustments of $6.5M of SBC in this figure.* **Gross Margins:** Q4 51.3% to Q1 52.5% *Another jump here and at the highest mark since 2021. Management highlighted some price stabilization in certain markets and better capacity utilization overall.* **Operating Income:** Q4 $50.3M to Q1 $70.7M *Huge jump here as higher gross profit combined with lower OpEx. Note that management highlighted a one-time $16M OpEx reduction in the quarter related to a contingent consideration reduction, but would have been up even if you adjust for at $54.7M.* **Operating Expenses:** Q4 $92.3M to Q1 $74.3M *Big drop here although as noted aided by the contingent consideration adjustment and would have been $90.2M normalized so still down qoq. OpEx as a % of revenue drops from 32.6% in Q4 to 26.9% in Q1- very lean.* **Operational Cash Flow:** Q4 $71.0M to Q1 $84.0M *Don't have financials yet to look at tax dynamics but a huge number to start the year, up 12% from 1 year ago to an all-time high. GTI remains the cash flow leader of the MSO space by a large margin. Management noted $15M of CapEx so FCF was $69M in Q1 alone- a huge number.* **Cash:** Q4 $161.6M to Q1 $223.9M *Again don't have the full CF statement, but positive OCF appears to have been partially offset by $15M in CapEx spend and $13.6M in share buy-backs ($53.4M in share buy-backs total now for 4.9M shares for an average of $10.88/share). Debt stands at $309.9M* -- **Notes From Call:** -Well prepared in Ohio with 5 stores and an already expanded cultivation facility ready to meet adult-use demand. Think it is an extremely strong market from day 1: small medical market currently with a big population so upside is big. GTI canopy is maxed under the medical limit at the moment so ready to go. -$15M in CapEx in Q1: mainly FL retail footprint and CT cultivation expansion. Sounds like they are cautiously approaching the FL adult-use initiative- planning to open up more stores under the current medical regime but will ratchet up if the vote goes well in November. -$100M CapEx planned for the 2024 down from $220M in 2023. Focus on 15 new stores in FL/NV/MN/OH and certain capacity expansions. -NJ facility expansion came online during the quarter and aided wholesale results. -NY, VA, MN all were expanded as well and have unused capacity at the moment ready to meet demand. NY growing already, MN adult-use on the way in March, and VA growing on the medical side with adult-use voted down. -Flat guidance for Q2 -No initial plans to change 280e approach for now, but certainly watching what peers are doing to see if anyone does so successfully. -Lots of dialogue with the US exchanges but no changes on their end as of now as to their willingness to uplist US operators. -While prices declined YOY, noticed some improvements QOQ in certain markets suggesting some stabilization overall.

AluminiumCaffeine

FLNC is technically free cash flow positive, so long as a company is FCF positive then to me its fine enough at a certain price. Margins/profits can be improved upon over time, and if cash burn isnt an issue topline growth is what I am looking for mainly.

Fuego1050

Liquidity drives valuations. LPs continue to get high valuations for their EV/Ebitda anD FCF. (Or lack there of) Once uplisting, the liquidity on MSOS will allow price discovery and huge increase in valuation.

raytoei

Everyone shits on Meta but the company produces the highest FCF/sales%. For every dollar of sales, they generate almost 35 cents of free cash, versus 29cents for Microsoft. Their return on capital , a measure of how good they are in allocating resources, are similar. While Microsoft has the largest impact on businesses, I would say that Meta has lesser competitors. And lesser competitors isn’t a bad thing, just look at Starbucks, being eaten alive by inferior competitors in the coffee business in China.

CannaVestments

Overall an in-line quarter from Verano with results as expected after reduced guidance was given in Q4, stable margins, and continued cash flow generation, but also elevated OpEx. Guidance suggests growth will largely be muted until Ohio adult-use turns on in H2 (where Verano has 5 stores and a T2 grow), so increasing wholesale penetration will be a focus as new stores in IL and NJ continue to challenge retail revenues in core states. Unlike certain peers, Verano does appear that it is continuing to pay their 280e taxes for the time-being, using current cash flow to pay down debt ($50M paid down in Q2) although highlighted it would have saved $80M in 2023 taxes had 280e been removed. Comparisons to Q4: **Revenue:** Q4 $237.2M to Q1 $221.3M *Fairly steep drop of 6.7% consecutively and 2.6% from 1 year ago, but ahead of the $216M consensus as the company had guided to a MSD yoy decline during the Q4 call. VRNO opened 2 new stores during Q1 (1-PA, 1-FL), relocated another PA dispensary, and has opened an additional partnership store in CT so far in Q2. Wholesale was flat with the sequential drop all on the retail side, particularly in FL/NJ/IL where new stores were coming online with retail:wholesale split landing at 76:24. Q2 guidance was for flat to LSD growth over Q1.* **Adjusted EBITDA:** Q4 $73.4M to Q1 $66.5M *9.4% decline was right at consensus ($66-67M), with margin down from 30.9% in Q4 to 30.0% in Q1. This was down from the $70M posted 1 year ago as well. Only minor adjustments of $1.8M in one-time costs and $3.5M in SBC.* **Gross Margins:** Q4 49.6% to Q1 51.0% *Solid showing here and a strong level relative to peers.* **Operating Income:** Q4 -$11.1M to Q1 $22.7M *Q4 had an impairment and was $31.9M without so actually a big drop here as lower gross profit combined with higher OpEx.* **Operating Expenses:** Q4 $128.8 to Q1 $90.3M *Comparable Q4 figure excluding the impairment was $85.7M so an increase here. OpEx as a % of revenue rises from 36.1% in Q4 to 40.8% in Q1, as the company highlighted costs from new store openings and prep for Ohio's adult-use market in H2 2024.* **Operational Cash Flow:** Q4 $32.3M to Q1 $31.0M *Slight drop here, although waiting in financials to look at tax-dyanmics. It does not appear that Verano is challenging 280e yet like some of their peers. CapEx was $9.7M for FCF of $21.3M.* **Cash:** Q4 $174.8M to Q1 $193.8M *Again don't have the full CF statement yet, but largely looks like positive OCF offset CapEx with only minor other adjustments. Management noted that they have subsequently paid down $50M in their senior term facility in Q2 and are looking at potentially paying down more. Debt as of Q1 was $445M.*

wearahat03

Break-even will be in 2027 Negative FCF of 7.2B + SBC of 1.2B = 8.4B loss in one quarter or 33.6B annualized Lost export license to sell to Huawei Share price at end of 1998 levels so about 26 years. Their competitor has a much larger cash chest, history of success, single focus and 8B FCF in the same quarter.

Fuego1050

These companies continue to be FCF positive even with 280 and no credit cards for transactions. They aren’t going anywhere…. Shorting costs interest on borrow…. Holding does not. Long term trend should be up….. regardless

dirtydustykilla

Gamestop is currently in the The Ugly Teenage Phase of Profitable Growth. Currently at Phase 5: Revenue is declining YoY, but you have achieved profitability (EBITDA and/or FCF). At this phase, you are still ugly to the world because revenue is declining, but the end of the teenage years is on the horizon. This play could take 10 years, but the activist leadership is undeniable as well as 1.2 billion cash on hand. They can't drop it below that market cap.

AP9384629344432

I think it's worth learning how to create one yourself in Excel or Google Sheets. You don't have to add in all the fancy bells/whistles and model everything out. I don't like those generic online ones because it's sometimes tricky to mess around with the assumptions directly. If you want a really fancy template, you can look up Aswath Damodaran's spreadsheets and the videos he has explaining how to use them. But they are *really* overkill imo. (You're going to have to handle every detail, like capitalizing R&D / leases, handling outstanding options). [Here is one of the tabs in a valuation I was doing of CELH](https://i.imgur.com/KCMGIfC.png) for example. Not worth the time. [Here is what one of my barebones spreadsheets looks like](https://i.imgur.com/UUcSofF.png). I start with the most recent known figures from the 10Q / earnings report, pick a reasonable trend for revenue growth / gross margins / capex / SG&A, fix a tax + discount rate, and that gives me the cash flow stream. Then I just add in net cash, and pick a terminal value method (say a multiple) to add to your total value, divide by shares outstanding. It takes me probably 20 minutes to make one of these from scratch. Most of the lines in that segment are not used. My more elaborate ones decompose businesses into their individual segments, e.g., [my AMR (a coal miner) analysis](https://i.imgur.com/29otuGt.png) which builds up FCF on a mine by mine basis. [My Crox analysis is going overkill](https://i.imgur.com/mp22iLL.png), but you'll notice most of those rows are really insignificant and I just 0 them out.

Many_Easy

You are correct. They missed their projections and explained why. However, their revenues, EBITDA, and FCF has improved. Maybe not as much as we like, but still improving financials. Also, their debt is declining. I’m not so worried about current financials as all bets will be off once catalysts occur and Germany moving faster on Pillar II than we all thought.

sportingpool

this is a technical loss. IPO related. the underlying biusiness is already profitable, positive FCF of 30m and its growing fast. because of you guys ! still a very cheap stock, esp compared to t junk like pin or snap

supervisord

It’s not FCF

mikey_lew_92

/u/_hiddenscout, I am stealing your format, because I am just so hyped right now. ZETA Q1 Results: EPS $(.23) vs $(.25) estimate - 8% lift Rev $194M vs 187M estimate - 4% lift Guidance 2024 - Raised Revenue from $875M to $895-905M FCF expected to be $75M-85M for FY24 Customer counts continuously increasing as well QoQ. Happy shareholder today

Big-Today6819

Should start a minor dividend payment of 10 to 20% of FCF starting at 10% so it can grow but will not effect the saved up cash from getting bigger

Desmater

I invested into CVS for these reasons. FCF is $10-12 billion a year. They have been paying debt down from Aetna purchase. Aetna acquisition was smart. Healthcare/insurance is growing. Good margins and ties into they business. Their plan seems to be customers/patients go to their clinics or healthcare provider. They then can go to CVS pharmacy to fill their scripts. Using their Aetna insurance or others. Their PBM business mixes in there as well. So they do Pharmacy, PBM, Insurance and primary care.

RIP_US

Has anyone gone through each MSO and noted the impact of 280e removal on FCF? Curious which ones stand to benefit the most from that aspect.

whiskeyinthejaar

Historically based on trust me bro? What exactly is high PE? Because the market is trading at 27x as of last week, and Apple is valued 29x You should have just stopped at I am clueless and spent 5 mins of research. The idea of a company hoarding cash for 10x waiting for their stock to decline to buy it back is fascinating. Apple literally generated 100B in FCF last year, what are they supposed to do? On a FCF yield basis, Apple is yielding 3.8% vs current treasury at 4.4%. If apple buy back their stock using the $110B all at once, on Monday morning, guess how much they are reduced their float? Less than 5%

97iu

[https://imgur.com/a/nTtiBWN](https://imgur.com/a/nTtiBWN) Makes sense. I think that was a clever move, as a less controversial alternative to issuing new shares to pay dividend outright(when the stock was trading at 35x EV/FCF in 2017).

but_why_doh

Yes. Earnings are always going to outweigh everything else. FCF is the closest thing to gravity in the market

Due_Size_9870

This is indescribably idiotic. Apple would never need to issue more shares. They generate $92B in FCF per year. This whole thread is full of people with no idea how the stock market works

Jeff__Skilling

It would probably be more helpful if you looked at **other** mults and peer trading stats to give you an answer, [so I went ahead and did that on Factset](https://imgur.com/a/oa11uup) Looks like the English tobacco public companies trade pretty closely with one another, Altria trading a couple turns above them, and then PhillipMorris being awarded the premium valuation multiple across all fronts for this comp set. I'd also flag that you probably *shouldn't* be using enterprise value over free cash flow to evaluate between these comps -- free cash flow is cash that's generally only available to providers of *equity* capital (since FCF = CFOps less Capex, and CFOps nets out interest and taxes), so you'd want to compare FCF to market capitalization rather than EV / including Net Debt. Also, not sure if FCF is the best metric to gain a full picture here considering half of these tickers are headquartered in different tax **and** legal jurisdictions (50% UK 50% US), so it's not really an apples-to-apples comparison with that approach.

AverageUnited3237

Dude. I. pulled the numbers from their earnings report. Are you serious? Read the FCF from q2 2023 here: [https://abc.xyz/assets/20/ef/844a05b84b6f9dbf2c3592e7d9c7/2023q2-alphabet-earnings-release.pdf](https://abc.xyz/assets/20/ef/844a05b84b6f9dbf2c3592e7d9c7/2023q2-alphabet-earnings-release.pdf) and the 2024 q1 here: [https://abc.xyz/assets/91/b3/3f9213d14ce3ae27e1038e01a0e0/2024q1-alphabet-earnings-release-pdf.pdf](https://abc.xyz/assets/91/b3/3f9213d14ce3ae27e1038e01a0e0/2024q1-alphabet-earnings-release-pdf.pdf) or do you just think Google is committing straight up fraud by misreporting their numbers?

wearahat03

Only answer I can give you is that while their operating income is 27.9B to 25.5B in AAPL favor, the bigger disparity is their FCF. I take away SBC. GOOG FCF is 11.6B compared to AAPL FCF 17.7B AAPL also gets massive December quarters. Their last quarter FCF was 34.5B

foo-bar-nlogn-100

Spy puts at open. Thesis. Hedge funds buying short. MM delta hedging buy buying shares. Once delta hedging is done, it will dump. May not today, but we go lower after it is done. Less consumer spending in US and global not good for FCF and multiple expansion.

Ring__Worm

Made it a 10% position at 125$. - 0,1b debt - 4,2b in cash - 285$/share secured in service revenue for the next 15 years - service revenue is has a way higher margin than selling turbines - their grid software will become large with annual recurring revenue from SaaS, as grids get more complicated to manage - management has 4x base salary in stock as their bonus - management bonus tied to FCF and EPS - Increase in energy demand as you mentioned (Zuck) This is just what I remember off the top of my head.

97iu

I understand the common problems the industry faces, but fundamentally my question here is what is so different between PM and BTI that PM trades at **triple** the FCF/EV yield and **double** the dividend yield? It's like Coca Cola trading at 30x while Pepsico at 10x. I have only observed this kind of premium/discount between comparable China onshore and Hong Kong listed stocks due to liquidity.

elgrandorado

Taking a deeper dive into MELI financials - Credit portfolio is being nicely managed. YoY growth of 46% while 90 day past due dropping from 18.7% to 17.9%. Total portfolio of $4.5 billion. - TPV continuously increasing thanks to Brazil and Mexico markets. They are also increasing their cross-selling of credit to active merchants. - Revenue growth of 30% YOY is mostly due to strong performances in key markets (Brazil/Mexico, with figures ranging on average around 50%). Operating income also growing at a similar rate comparably. Net income growth further accelerating at 70% YoY. - Take rates amongst commerce and fintech segments are a question mark. I'll need a 10-Q dive to understand the YoY impacts later. Shipping T&C changes pop up in the commerce take rate pricing pressure, and in the gross margin section. The amendments attempt to compare revised FS metrics post-mortem, but it's annoying since it's restating gross commerce revenues and costs of shipping. - FCF remains very strong at $1.3 billion this quarter, somewhat asterisked by their existing credit portfolio. Interesting set of stats. Growth looks good in general LATAM markets, fucking killer in the key Brazil/Mexico markets (80% of revenue pie between the two), and anemic in Argentina.

notreallydeep

Idk about cash on hand, but it's pretty much their entire FCF. They'll make like $100B-$120B like last year or something and it pretty much all goes to shareholders.

thelastsubject123

the OP said cash reserve and i made a comment about their balance sheet not their FCF generation

Desmater

Not unrealistic to be $10+ trillion market cap. Apple alone spent $500+ billion on buybacks in the last 10 years. The FCF, capex and R&D spend at these companies is insane. Like imagine if they turned off R&D spend and Increased Capex spend. FCF would be like $200-300 billion a year.

creemeeseason

I mentioned the Swedish stock market the other day, which I think is one of the best in Europe. It trades at around 15x trailing earnings right now. A company in that market, Evolution AB, a company with 60% FCF margins (so 60% of revenue gets converted to free cash) is trading at 20x earnings. 16x forward earnings. So the market is assigning one of the most efficient companies around essentially a market multiple. I still think this is one of the best growth names, value wise, in the market.

Buy1Free1

i don't understand the market anymore.... CyberArk announced record earnings, reacceleration of revenue growth to 37% yoy, beat consensus EPS estimates by 168%, raised FY guidance. 1Q FCF already exceeded FY23 FCF. yet down 4% premarket.... fk me

fkfjjfysgr

Well that’s where I’d be interested based on my FCF assumptions and required rate of return of 10%.

djshotzz504

Elimination of 280E is gonna change how many of these US operators are valued. Give it a couple quarters for policies to get sorted out and watch FCF and profitability jump. Additionally, since all US operators are OTC or operate on Canadian exchanges, reported shorts is generally not very accurate or even reported at all. So for sure we are gonna see some volatility in the future.

AluminiumCaffeine

WBD 31% FCF yield, debt load too crushing market has decided?

sportingpool

they use all of their FCF to buy back already. 5bn a year ! thats a very solid 7% of current market cap a somewhat depressed share price is actually a good thing for us shareholders now....

Captaingrass

nah, FCF were 8B 2 quarters ago, the previous quarter they made 27B. This company is going higher 100%

Excellent_Plenty_172

At the time they were one of the only profitable companies in the industry. They were successful in one of the hardest and most competitive state industries. They had arguably the lowest overhead per pound in the industry. They have tons of additional land in Rogue Valley already paid for to further reduce costs as they grow. No lease backs. The only company that came close was glasshouse in California. I was cautious with glasshouse though due to glasshouse lawsuits about fueling the black market. All of their growth was organic and they had been extremely conservative in their expansion process and they were doing it while maintaining FCF. It felt like a no-brainer. Of all the stocks I own, I will likely never sell GRUSF. I have no intentions of doing so. I guess we will see if they get acquired and who acquires them as this market consolidates.

deepvaluemunay

Ok Seems reasonable. Will do, and good luck. Hope it moons. Im happy to share the model I built as well with you. Its on google sheets and you’ll need a subscription to a data feed but it carves up the balance sheet of any ticker to push out FCF as a function of interest payments / rev contraction etc. Its aimed at these types of companies.

WedWealthist

Doesn’t look too bad to me revenue down slightly (5%) but eps and FCF growth look pretty strong to me

The-Noticing

With Amazon printing $100B in FCF by EOY 2025, now is the perfect time to implement a capital return plan. Amazon is cutting back on their frivolous capex spend, and other money burning ventures. There’s only so many things Amazon can invest in for growth. They can cough up some cash now for shareholders.

Pathogenesls

What was their FCF?

8700nonK

It's weird people keep saying geopolitical this geopolitical that, but companies that have done well are also doing well as stock, like Netease. Baba is most likely losing market share, and like JD has been mostly flat in revenue. And it's also about return to shareholders. Does company X have 10% FCF yield? Nice. What is happening with that money? No dividend, no buybacks, no strong growth? Than it's a pass. Baba has started doing some timid buybacks, no dividend, overall kinda low return of cash considering how much cash they're supposed to produce since years now on the reports. Where does the cash go? Maybe fake, maybe as contributions to 'the people' JD doing a lot better here, a decent dividend, some buybacks started. Still kinda low overall, but imo JD has the moat of very low net margins. Tencent - too much focused on media things, which is chinese government's biggest fear, they won't let this one grow too big.

gatovision

IMO all pretty overvalued except ZM because it’s heyday is over and it’s become a value stock / take over target. CRWD is 25xs p/s and $75B which is nuts for a company that makes $800 mil per Q even with their growth. Feel like MSFT or AMZN could take biz from any of these if they wanted. A downturn could take all these apart. NOW is total hype. Not sure about ZS and PLTR is kinda a black box to me. PANW would be my pick because they make decent rev, high profit margin and good FCF

qualitywolf

Look up Rule of 40. Generally growth is prioritized over FCF margin in a company's early years.

mcnealstash

Yes they are- although all of them differ to some degree. These companies are much more egregious with their SBC than the FAANGs though. For instance- in the trailing twelve month reporting period- PLTR earned \~$700M in free cash flow but gave out $475M in SBC. So 2/3 of their free cash flow is basically negated and not counted as retained earnings because of this. MSFT earned about $70B in free cash flow but gave out $10B in SBC. So only about 14% of FCF is given out as SBC. That's also after $40B of CapEx (some of this is maintenance CapEx meaning it's the cost of maintaining the enterprise, but some of this was also probably growth CapEx- like building a new data center to scale operations off of).

Visual-Cranberry1210

Haha no. I have too often sold positions based on weekly or monthly movements. Will hold this one for 3-4 months. Want to see what happens at equity dilution and the next delivery report on July 1. FSD won't save them from another negative FCF earnings. https://preview.redd.it/i1e5vggwkaxc1.jpeg?width=1080&format=pjpg&auto=webp&s=773812e2a6e93fae6404afef60a67924c66be612

The-Noticing

By EOY 2025 Amazon will be generating $100B in FCF per year. $70B this year. The money printers are on, especially with Amazon’s 3P fee changes. The effects of the fee changes will be seen in the second quarter. Amazon will be the largest company by market cap within 5 years easily.

sleepydevil25

As Warren Buffett asked: if compensation isn’t an expanse, then what it is? Absolute heathens trying to get away with SBC has not an expense lol I always exclude it from FCF to get a true picture

UndervaluedGG

There is a big thing you’re missing. In 2021 it was going through a massive period of over earning due to brought forward demand from covid. Therefore during periods like this you really can’t give too much credit to low EV/FCF ratios, because normalised earnings will be much lower. It is now going through a period of under earning, and trading at around 3.5 forward EV/FCF. This is when you want to get involved in consumer cyclicals like this, me personally, I bought 600,000 shares recently at an average of around $3.05

UndervaluedGG

There is a big thing you’re missing. In 2021 it was going through a massive period of over earning due to brought forward demand from covid. Therefore during periods like this you really can’t give too much credit to low EV/FCF ratios, because normalised earnings will be much lower. It is now going through a period of under earning, and trading at around 3.5 forward EV/FCF. This is when you want to get involved in consumer cyclicals like this, me personally, I bought 600,000 shares recently at an average of around $3.05

AP9384629344432

Yesterday my comment about HCC got some responses about the price being too 'high' and missing out on the run-up. I get this frequently, including about $AMR. Let's remind ourselves of the basic math of $HCC to put into context what you're saying is 'too high'. [I borrow this coal analyst's estimates](https://twitter.com/aggresivevalue/status/1757966214771376498). His estimates used the met coal forward curve at the time, but we'll be conservative and reduce EBITDA to $750M a year. Remove taxes / maintainence capex (that omits Blue Creek needs). That means $550M in FCF annually ex-Blue Creek in 2024, 2025, 2026. ## FCF in 2024 - 2026 $550M in annual FCF the next 3 years implies $1650M in FCF over 3 years. With cost inflation included, HCC will spend $1.2B to finish Blue Creek, and by the end of this year's $375M they will have $725M in cumulative Blue Creek capex done (per author's estimates). That is, at the start of 2024, they will have done $725M - $375M = $350M in cumulative capex. So let's say over 2024-2026, they spend a total of $1.2B - $350M = $850M in growth capex. Subtract that from the 3 years of FCF of $1650M, and you get $800M in FCF over 3 years. That's about $260M in FCF per year. ## FCF in 2027 and beyond: What happens post Blue Creek? Well now the 8M tons they produce turns into 16M. The cash cost per ton will be lower, at about $70 per ton (page 21 of last earnings presentation), and let's say they realize $160-180 average selling price (it's not the premium low volatility coal quoted on Aussie coking coal index, by the way). According to management (page 23 of earnings presentation) in this scenario they add an additional $300M in FCF. So take that $550M in FCF excluding Blue Creek from before, add $300M, call it $850M. We'll take out $100M just for any unexpected future capex to maintain it, beyond what management is projecting. So $750M in annual FCF for 2027, 2028, ... **Summary of FCF:** So we go from ~$250M in FCF annually for 3 years followed by conservatively $750M in FCF each year (indefinitely). ## Relative Multiples They have $565M in cash net of debt. The market cap is $3.7B. Let's just call it $3.2B enterprise value. At this EV, you are paying 12.3x current FCF (though this is really only 5.8x if you exclude Blue Creek growth capex) But after Blue Creek? That's 4.2x multiple on future FCF. ## Intrinsic Valuation If I use a 15% discount rate on the FCF from 2024 through 2030 (inclusive), that's worth roughly $2.3B, including the $565 in net cash. The final year EBITDA is $750M + $400M (in incremental EBITDA according to management on slide 23). So $1150M in EBITDA, discounted by 15% in 6 years, is $500M. Apply a 5x EBITDA multiple because it's coal. So $2.5B in terminal value. So combined, an intrinsic value of $4.8B. That right there is a 50% undervaluation at today's price. ## Bull Case [Read my older threads here](https://www.reddit.com/r/stocks/comments/1b0edmp/rstocks_daily_discussion_monday_feb_26_2024/ks9qtfw/) if you want to see how I get a double/triple using relative multiples that AMR gets. ## My response to those commenters Now, the market knows this. When do you think it decides to price it in? Don't tell me at $70 per share Blue Creek is embedded into the stock price. Right now the market is pricing in the death of met coal in 10 years. The market frequently gets valuation totally wrong on commodities, as they did on all coal companies in Covid and recent years. (Imagine buying $AMR for $15 a share in 2021. It's the same old company then as it is today.) Second, Don't just look at the price of a stock and make your assessment on if the company is cheap or expensive. If you're a investor, not a short term trader, and you believe in the met coal thesis, this company is stupidly cheap. If you think met coal prices are going to dramatically fall because of some recession, then yeah sure this company tanks to $40 per share or whatever the book value is. So if you really want to be a market timer, go ahead and wait. I'm fine sitting through the volatility to secure what I consider a 50-150% return in 3 years pick. If you're going to panic when the company falls 30% in a month because it's shoulder season and you're invested in a coal company in 2024 (seriously, coal!??), do not invest in this company. **None of this is financial advice, do not buy a company because of some random dude on Reddit of all things. (No really, it's your money not mine)**

Potential-Dish6119

I'd love to hear more from you on this. I have the Ishares $EMIM fund. It has loads of compa it's relatively equally weighted. I can see its volatile but I wanted exposure to markets I'd never find good companies in. I hold $FRIN too and understand that India could be a huge market in the next 20 years. I'm happy in FRIN...but I'm not sure about emerging markets etf. As for Emerging Markets funds like $EMIM I am concerned in its growth possibilities and management of the fund adjusting to suit growth etc. Do you believe an ETF for emerging markets have too many stocks, and if so, where would you find good companies with high FCF yields? I don't want to pick specific countries, but like everyone, I want good value for money accross many emerging countries. Cheers!

notreallydeep

Bonds + FCF yielding stocks, simple

tbb2121

HTZ generated average FCF of -$115m from 2008 > 2023. Their reported EPS is much higher than their actual economic earnings because it costs HTZ much more to maintain/replace their fleet than their depreciation schedule accounts for. Over the same 08>23 time frame HTZ has failed to grow their revenue from ~$9b. This means inflation-adjusted revenue has dropped significantly. Rental cars are a very low return, capital intensive, and cyclical business. Uber has not been kind to the economics of the rental car industry. If HTZ can’t make money (accounting for capx>DA) the past 15 years, why would they make money in a 5%+ rate environment? What if we actually had negative gdp for a couple quarters? My guess would be that HTZ returns to bankruptcy within 5 years, before ever distributing capital to equity holders. The risk of bankruptcy seems low in the near term. Higher interest rates for longer are extremely poisonous for their financial position. If rates collapse back to zero, they can probably muddle through without even much equity dilution. I have a small recently initiated short position.

DoobsNDeeps

I'm a sector analyst at an EM fund, so here's my take. EM are interesting because they're usually not efficient markets and they take longer to get news priced in. There in lies the opportunity. As some others have said, there are a lot of crappy companies in EM, but there are also some real gems too that I'm thankful that I have access to invest in. There are also stocks with crazy valuations in EM, in fact, I'd wager that large cap Indian consumer companies might have some of the highest valuations on the planet given their level of growth. I do think that if you take an active approach to EM, there are plenty of opportunities, but it's not easy because the markets have a lot more factors to think about than just if their EPS will grow quickly. Governance can be a real issue, and it's the principal reason why Korean stocks have a discount despite some of them being fantastic companies. Whenever I talk to mgmt teams over there I tell them to pump up their dividends and sometimes it works. Dividends on high FCF yields are the best way to win in EM in the longer run imo.

cbusoh66

SNAP is heading to $30 and possibly higher, they finally figured out how to monetize their shit and they got 420-430 million DAUs and have been FCF positive for a while after cutting expenses. But, the biggest driver will be advertisers abandoning TikTok as uncertainty about their ban continues but most of all with elections coming and the teens who grew up on Snapchat mostly are now in their 20s and a prime target, especially for Democrats compared to say Instagram, Twitter, or Reddit; $14 billion in 2020 and people are expecting it to double in 2024.

Captaingrass

Company has double digit growth in revenue, but their FCF is dogshit. I think you've made a mistake and should've waited to see if this partnership actually generates proper cash flow and making sure they have both growing revenue and growing cash flow, at least for 2 consecutive quarters( of which they don't have). I get it you want it to be the next Dunkin Donuts, but right now it doesn't look like it.

49PercentOff

$MVIS has hardly made any money over the last \~26 years, how come that will change now? Since CEO and CFO joined around/after covid, perhaps they got a real chance now. NI, FCF and margins over the last \~30 years. [https://www.dropbox.com/scl/fi/0rzx3r1h7nd5gg7j7jjsy/mvis.png?rlkey=balv07mgb2edbob9vp2e1uzxd&st=39yfxeck&dl=0](https://www.dropbox.com/scl/fi/0rzx3r1h7nd5gg7j7jjsy/mvis.png?rlkey=balv07mgb2edbob9vp2e1uzxd&st=39yfxeck&dl=0)

49PercentOff

With the only difference that $CMG has been FCF positive since early 2000, CAVA isn't (but it's close) CMG → [https://www.dropbox.com/scl/fi/pv245vaagdhuw1zbx8l1p/cmg-netincome.png?rlkey=3cjf7ipcevjvg8rx2d5mjs6lm&st=gilqx92g&dl=0](https://www.dropbox.com/scl/fi/pv245vaagdhuw1zbx8l1p/cmg-netincome.png?rlkey=3cjf7ipcevjvg8rx2d5mjs6lm&st=gilqx92g&dl=0) CAVA → [https://www.dropbox.com/scl/fi/8735xixtzzfei5pur7rgp/cava-netincome.png?rlkey=g7vn5i85q5421btxlfp109ojv&st=hmkn431h&dl=0](https://www.dropbox.com/scl/fi/8735xixtzzfei5pur7rgp/cava-netincome.png?rlkey=g7vn5i85q5421btxlfp109ojv&st=hmkn431h&dl=0)

Owntano

Based on the last earnings call they’ve been working on FCF and are up 48.3 billion in free cash’s year over year so maybe it’ll get better this quarter too

FunDistribution2368

Amazon has so many avenues to spend their FCF that I don’t think the best use of their cash is to give it back to shareholders. They haven’t in the past and I don’t see a reason why to change now