FCF

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

Desmater

I use to think like that and bought under $40 right around when Pat became CEO. But sold around the first quarter when their FCF went negative for a profit. Was going for the long haul 5-10 year hold too. They will probably never catch up to Samsung let alone TSMC. They need new management, not just CEO. Like new board, full new C suite like BA Boeing does too. Need engineers, Master and PhD holders in there. Intel just got too complacent and used tactics to just keep drifting and not innovating. Reason why AMD came back from $2 a share to now. Reminds me of the stories you hear about Microsoft doing shady sales tactics against competitors. Like Intel teaming with Dell and etc. To keep AMD out. TLDR: Will they pull a GE or a MSFT with Satya replacing Ballmer.

fkfjjfysgr

Why do you say so? Have you calculated a fair value based on a conservative FCF forecast/discount rate?

Careful-Rent5779

No, Free Cash Flow is sufficient to fund re-investment & buyback & dividend. Its a sign of continued expected growth in FCF.

Cobra25k

Very true. Always been hard for me to pull the trigger on a stock trading at FCF yield of less than 2% though.

elgrandorado

I bit the bullet as the stock started breaking out after October. Price is just over $1,100, but I'm buying for the long term. It's the most expensive stock I've ever bought (in earnings/FCF to price multiples), but compounders always justify their price in time.

SwellsInMoisture

Ticker Symbol: SNAP P/E: 10000.00 P/E Rank: 17.15 P/S: 3.89 P/S Rank: 31.56 P/B: 7.40 P/B Rank: 18.01 P/FCF: 514.79 P/FCF Rank: 33.13 SHYield: 1.04% SHYield Rank: 49.26 EV/EBITDA: -15.21 EV/EBITDA Rank: 16.44 Overall Score: 165.54 6 month price momentum: 19.10% I definitely wouldn't use this as a tool to predict short term movements. That said, the stock is clearly a growth stock, so you're paying for what that company can become rather than what that company is today. Whether their earnings meet or fall short of expectations, a lot of their valuation is going to be driven by the view of what they can become in the coming years.

mrmrmrj

$XOM at 8% FCF yield amd pays 3% dividend. Tech is for chumps.

ValueSpeculator

Some color on the quarter but no price projections just yet: Bottom Line: CLS reported Q1/24 results that exceeded expectations, while providing strong Q2/24 and FY2024 guidance. The beat, and the raise, seem to have been driven primarly by strength in the Communications segment (400G/800G networking gear for hyperscalers), which is in turn contributing to better operating leverage. This is more than offsetting a more cautious full-year outlook for ATS, which is being impacted by weakness in the Industrial segment. Key Points Revenue/EPS beat. Revenue was $2.21B (+20% y/y) vs. consensus of $2.10B; the adj. EBITA margin was 6.2% (+30bps q/q, +100bps y/y), driven by stronger CCS margins; and adj. EPS was $0.86 vs. consensus of $0.72 (with $0.05 of the beat stemming from a lower-than-expected tax rate). CLS's largest customer represented 34% of revenue, up from 29% in Q4/23. Strong guidance. Q2/24 guidance calls for revenue of $2.175-2.325B (+12-20% y/y) vs. consensus of $2.141B and adj. EPS of $0.75-0.85 (+21-39% y/y) vs. consensus of $0.72. FY2024 guidance calls for revenue of $9.1B (+14% y/y) vs. prior guidance of >$8.5B and consensus of $8.79B, and adj. EPS of $3.30 vs. previous guidance of >$2.70 and consensus of $2.93. CLS raised its FY2024 FCF guidance to $250mm vs. prior guidance of >$200mm. Unexpected Comms strength. CCS revenue was $1.44B (+38% y/y) vs. consensus of $1.24B. Communications revenue of $754mm was +17% y/y vs. prior guidance of low-single-digit growth—and CLS is anticipating mid-40% growth in the upcoming quarter. Enterprise revenue of $687mm was +72% y/y vs. prior guidance of high-60% growth, with Q2/24 guidance calling for low-20% growth. CCS is expected to grow in the mid-20% range for the full year. ATS softness. ATS revenue of $768mm was -3% y/y, in line with prior guidance, with the decline driven by demand softness in the Industrial segment. Guidance calls for a high-single-digit y/y ATS decline in Q2/24, with a recovery in the second half, leading to flat ATS growth on a full-year basis (vs. prior guidance for mid-single-digit growth). Small acquisition. CLS entered into an agreement to acquire NCS Global Services, an IT asset management and recycling company, for $36mm. The acquisition is expected to close in Q2/24. We don't believe this was a meaningful contributor to CLS's guidance raise (~$6mm TTM EBITDA).

humlor123

never use EBITDA for anything. Always use FCF. They are vastly different.

AP9384629344432

On the other hand, META consistently shows an ability to generate a high ROIC (20s-30s). Oil companies will never match that on a consistent basis. So you have a company that has a track record of generating stellar FCF, and the question is if this particular capex will be a waste. I mean AI or ML or whatever you call it clearly played a huge role in Facebook's success with ads. From the beginning they have been hiring tons of ML/AI researchers and investing heavily into relevant software. I'm just skeptical that LLMs specifically will be an extremely high ROI investment. But higher than the risk free rate is a really low bar imo...

ThinkingOfTheOldDays

I am so fucking bullish its nuts. they already lapped their "we're in CAPEX investment mode" and FCF is trending hugely up.

AluminiumCaffeine

"UnitedHealth Group is throwing in the towel on its Optum Virtual Care telehealth business." Funny to me that the only company making telehealth "work" seems to be the often mocked Hims, TDOC terrible, UNH closing its division, and even AMZN backed off seemingly. ED and hair loss (which is what most see Hims as currently) are seen as a funny gimmick business and yet Hims is now FCF positive growing at over 30% y/y taking market share

LeWahooligan0913

GD ate shit on earnings because of negative FCF despite beating revenue. Might be an opportunity to snag a prime defense contractor at a good price considering uh… everything going on in the world

PIK_Toggle

Summary from [here](https://www.reddit.com/r/TradingEdge/comments/1cbwmuo/everything_im_watching_and_analysing_in_premarket/): TESLA: * Basically, the fears about margins failed to materialise here, as gross margin and auto margin come in ahead of expectations. Expectation was low into the print. * There are some analysts arguing that these numbers are being inflated by FSD revenue recognition. And that with 3-5% price cuts and 20% lower deliveries, gross margins shouldn’t have been 17.4%, when Q4 revenue was 17.6%. WE will learn more of this when 10-Q comes out. * Nonetheless: * Revenue came in 21.3B a 8.7% miss vs consensus * EPS came 0.45, a big miss vs expectations of 0.58 * FCF came in at negative 2.5B a big miss vs consensus of 1.19B. * Gross margins came 17.4%, beating consensus of 16.9% * Auto Gross Margin came 16.4% beating 15.8% consensus * EBITDA margin came 15.9% beating expectation of 15.8% * Within Revenue, Services beat, but thats a tiny segment * Automotive revenue, which is the bulk missed by 11% * Energy missed by 13% * Comments from the press conference: * Accelerating launch of new models ahead of previously communicated start of production in H2 2025 * This includes more affordable models * Still sees notably lower volume growth rate for 2024 * Committed to company wide cost reduction * Production at Shanghai Giga factory is down QOQ * Musk says Tesla may be able to sell Optmius by the end of next year * Tesla aims to deliver Semis to customers in 2025 * Says Tesla will have higher sales this year than last year * Buybacks are possible, but we need positive cash flow * RObotaxi will be called cyber cab

Quartr-app

Tesla Q1 2024 Revenue -9% \*Automotive -13% \*Energy Gen. & Storage +7% Gross Profit -18% \*marg. 17.4% (19.3%) EBIT -56% \*marg. 5.5% (11.4%) Adj. EBITDA -21% \*marg. 15.9% (18.3%) EPS -53% FCF -674%

jeopardy_loser

I mean..I keep trying to find something approaching anything close to what should drive the price like this and just see stuff like --Revenues: down -9% y/y -Net income: down -55% y/y -EPS: Consensus estimate $.51, actual $.45 (third consecutive quarterly miss), down -47% y/y -FCF: down -674% y/y -Operating Margin: down -590bps y/y TSLA longs: https://preview.redd.it/lca4ao4eqcwc1.jpeg?width=889&format=pjpg&auto=webp&s=f29e1de56253c51d68f39c3fd19a7396881a9662

KimisDrink

What that guy just quoted isn’t the cap rate anyways, it’s like a FCF yield.

beyerch

-2.5B in FCF this quarter. There will be a dilution in the future to raise cash. P.S. Isn't it just a pure coincidence that the new comp plan for Elon is dilution. Completely unrelated........

malignantz

Tesla's Full Stock Driving hit my short position like a child-sized mannequin attempting to cross the street. Absolutely bushwhacked. -2.5B FCF means nothing to you people. They didn't want to talk about the new cars. They abandoned unboxed method that's supposed to reduce COGS 50%. No good news on 4680. Seems like maybe they are abandoning the project or reducing their expectations heavily with comments about buying batteries. Oh, here's some mocked up "screenshots" of our RoboTaxi app for our "RoboTaxi". No stupid "later this year" timeline for FSD, so we know it is at least a couple of years out, but likely more, since they aren't yet testing their FSD cars. I don't get it.

animositisomina35

Negative FCF is unacceptable for a car company, but it's okay if you're an AI robotics company 

WhoGotDaKeys2MaBeema

Thats exactly my point, you call it fancy lingo, but those are just strategies used to make money on certain indicators. You must not be a seasoned investor if that is considered fancy lingo. I'm about to use more fancy lingo so hold onto your hat... S&P500 rating B or better Debt to Current Asset <1.1 Current ratio <1.5 EPS growth positive past 5yrs P/FCF <15 P/E ratio <15 P/S ratio <1 PEG ratio <1 P/B ratio <1 D/E ratio <1 You should also look to make sure margins are +10% i.e. roi, roa, net margins These are the basics.

nomad_ivc

> Expecting 650m FCF and came in at -2.5 BILLION Yep! Just look at the bar chart of Operating Cash Flow, and FCF: https://twitter.com/TheTranscript_/status/1782877141006446650 If there is an insight which isn't obvious to masses causing this spike, it should have become a 'headline' by now. Level of Tesla FSD maturity, as shared by a leading voice in AI. https://twitter.com/GaryMarcus/status/1778178462832075042

Lost-Cabinet4843

Something is so weird here. Is this just kids pumping this up or is there something that we are all missing here? The analysts are tearing earrings apart but the stock soars. Crazy!!! Expecting 650m FCF and came in at -2.5 BILLION!!! Holy macaroni!!!

AP9384629344432

The numbers are gonna get worse. All those recent price cuts (FSD full package / subscription and new discounts in China / US / Australia / etc.) all happened in this current quarter, i.e., are not reflected in today's report. It seems TSLA is recognizing deferred FSD revenue, possibly to juice the quarterly numbers. That means it won't get included in the next earnings report. They burned up $2.6B in FCF this quarter, reducing cash position from $29.1B to $26.8B. GM by contrast did $1.8B in automotive FCF. Tesla specifically seems to be getting hit harder by the rate hikes than other companies. When Street starts valuing a car company like a car company, watch out.

jeopardy_loser

Rev: down -9% y/y Net income: down -55% y/y EPS: down -47% y/y FCF: down -674% y/y Op Margin: down -590bps y/y Fuck bull v. bear, this is fucking nonsense

memeteam1993

Negative FCF has surely struck fear into their hearts

Kant_touch

Honestly shocked TSLA is green with -2.5B FCF. I don't have any positions because it was pretty oversold but if it stays up I'll probably enter some medium term puts

Cobra25k

Rarely* not never 😉 You make a fair point, however, I still do feel like it seems to always trade at a premium and getting it over a 3% FCF yield seems like a good deal to me for such a high quality company. Yes it dipped in 2022 but that was because the entire market dropped over 20%. And yes it has dipped again this past week (which is why I’m taking advantage of it) but aside from this most recent past week it’s been mostly flat YTD

weapontime

No they’re just planes/defense now and their engines are the best by market share for Airbus and Boeing. Rolls Royce is only other real competitor. Their focus on LEAN manufacturing and TQM has really taken off after starting to implement this in 2019. FCF is strong and their debt load is very minimal compared to peers.

WilliamBlack97AI

$HITI Nasdaq. With over 10% market share in Canada (about 20% by end of this year), FCF+, over 500 million in rapidly growing annual turnover, 1.3 million loyal members to its cannacabanaclub and owner of the top 3 CBD companies globally, I consider High tide inc currently undervalued.

WilliamBlack97AI

$HITI Nasdaq. With over 10% market share in Canada (about 20% by end of this year), FCF+, over 500 million in rapidly growing annual turnover, 1.3 million loyal members to its cannacabanaclub and owner of the top 3 CBD companies globally, I consider High tide inc currently undervalued. The greatest wealth is created by being an early investor in Innovation.

mrTruckdriver2020

Agreed. Pricey at best but a bubble? Far from it. But this Is reddit so what do you expect. I looed into the FCF growth of the company and plotted it against the share price growth. The FCF has actually outgrown the share price on an arithmetic basis. I believe the CAGR for the FCF has now become higher as well after this pullback compared to the share price increase.

Jeff__Skilling

EV / NTM EBITDA P / NTM OCF FCF Yield (NTM FCF / Market Cap) Total Debt / LTM EBITDA Net Debt / LTM EBITDA compare across industry competitors and see which public companies are trading below their peer comp set. Is there a reason that they're undervalued? Might be a good reason to stay away. Is there ***no*** good reason for why a certain ticker is trading below their peers? Might be a good reason to buy.

creemeeseason

Nice little [post](https://substack.com/@maverickequityresearch/note/c-54473560?r=23ti9i) about the FCF growth rates priced into the magnificent 7. Spoiler, Tesla has the most growth priced in, GOOGL has the least.

zdayatk

P/E, P/FCF, Sales Growth YoY, Operating Profit Margin, Div Yield

notreallydeep

FCF or EBITDA depending on the business ROCE pretty much all margins debt/EBITDA I barely use specific price-bound metrics, I just eyeball that.

SwellsInMoisture

Sure thing! This is based off of last week's data - I haven't re-run the numbers this week. DBA is an ETF, so it is not included in this stock screen. Ticker Symbol: CB P/E: 11.26 P/E Rank: 83.56 P/S: 1.99 P/S Rank: 52.28 P/B: 1.67 P/B Rank: 61.66 P/FCF: 7.23 P/FCF Rank: 87.57 SHYield: 3.63% SHYield Rank: 69.78 EV/EBITDA: 11.96 EV/EBITDA Rank: 67.89 Overall Score: 422.75 6 month price momentum: 16.95% Ticker 'DBA' not found in the data. Ticker Symbol: CTVA P/E: 52.77 P/E Rank: 42.86 P/S: 2.18 P/S Rank: 48.68 P/B: 1.51 P/B Rank: 65.96 P/FCF: 32.00 P/FCF Rank: 46.93 SHYield: 3.17% SHYield Rank: 66.17 EV/EBITDA: 11.88 EV/EBITDA Rank: 68.37 Overall Score: 338.98 6 month price momentum: 7.78% Ticker Symbol: CTRA P/E: 12.99 P/E Rank: 79.38 P/S: 3.70 P/S Rank: 32.82 P/B: 1.59 P/B Rank: 63.68 P/FCF: 13.32 P/FCF Rank: 70.05 SHYield: 4.98% SHYield Rank: 78.41 EV/EBITDA: 5.89 EV/EBITDA Rank: 90.56 Overall Score: 414.90 6 month price momentum: -2.16%

Brokenthoughts2

Nothing justifies him getting paid that much, Tim Cook also grew the company 12x since he took helm, with insane FCF growth (something Tesla hasn’t achieved yet) but over those *13 years* he has been 1/50 of that amount.

seridos

Quality is a subgroup of stocks. Like all factors it's measured relative to the universe of stocks. And like all factors it should be robust to the exact measure you pick. Quality stocks are going to be Those stocks with above average profitability and free cash flow etc. just like how we can sort value stocks by P/A, P/B, or P/FCF. Or we can sort momentum by 20-day to 200 day moving averages and the like. While you would think that would be priced in, on average there has historically been a return advantage to picking quality stocks. Warren Buffett for example is often thought of as a value investor, as those were his roots, But through the period where he actually built his fortune he was more heavily invested into the quality factor at any was into the value factor.

SwellsInMoisture

I haven't updated it with recent data, so this is based off of when I ran it last week. Ticker Symbol: ON P/E: 13.63 P/E Rank: 77.79 P/S: 3.45 P/S Rank: 35.23 P/B: 3.65 P/B Rank: 33.53 P/FCF: 64.96 P/FCF Rank: 38.45 SHYield: 1.03% SHYield Rank: 49.03 EV/EBITDA: 9.21 EV/EBITDA Rank: 78.63 Overall Score: 312.67 6 month price momentum: -29.96%

Starmedia11

They will have to do a capital raise to develop a new platform and it’s unlikely they survive to do that. It’s an auto company that’s about to post negative FCF with significant governance concerns.

grimkhor

That's the neat part there isn't a way to know this. This is what you estimate. FCF growth is the growth rate for the years listed and perpetual growth rate is when you assume the business arrived a mature stage and what that growth rate should be. For a cyclical business it's not trivial to just use past data for future estimations.

humbaobao88

As the title suggests, I'm trying to find the intrinsic value of NVDA and came up with a calculator based on DCF. But I'm having problems trying to figure out what to input for the FCF Growth Rate and Perpetual Growth Rate in order to calculate the Terminal Value (TV). Can any expert provide some guidance on what % you would input for the FCF growth rate and why? Let's base NVDA's current data as a benchmark, forecasting the 10 year FCF. All comments welcome.

_hiddenscout

PE ratio in theory should be fine for any company, it's just price over EPS. However, it's also one point of data, so you just don't want to use only PE as a metric. Plus different industries carry different averages. Usually companies with higher margins will trade at higher PE's. Plus ARM just IPO-ed, so it's still in a different phase and some of the metrics might look kind of wonky. You can look at almost all metrics of ARM in terms of fundamentals and it's going to look very expensive. PEG - 27 PS - 32 PB - 19 Price to FCF - 119 There's an argument that software companies in particular have higher P/B ratios since they make software and the assets are not tangible. This is usually why it's a weird thing to compare companies in different industries when looking at metrics. I mean even looking at the sector averages: [https://pages.stern.nyu.edu/\~adamodar/New\_Home\_Page/datafile/pbvdata.html](https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pbvdata.html) Semi and Software tend to have the highest on average.

AverageStockpicker

Don't. Costco for example has very unattractive long-term price appreciation. Stellar performance for the next 10 years is already priced in and it had a lot of hype around them. That's called momentum and it can change fast. Nvidia same thing for future returns (lots of liquidity is 'riding the wave' and once they sell, it's going down hard). Look at Netflix today: absolutely blows past all expectations: -5% after hours. Look at Tesla. You are right about aggressive, but you're doing it wrong in picking stocks without knowing shit about the market (which is normal because you're only 23). This is how I would do it if I could go back to 23 with what I know now: Agressively buy Google and Amazon, up to 25% weighting for each. They are absolutely dominating giants, market caps the size of countries who control our very way of live. They print free cash flow like theres no tomorrow and they're still growing like crazy. Google has no debt, in 2025 they'll likely have as much cash as the entire GPD of Morocco. Basically all of the world's internet traffic runs through them, they have a duopoly with Meta in online Advertising. Duopoly with Apple with Android/Play Store. Oligopoly with Microsoft and Amazon in Cloud Services. Only self-driving car already in commercial operation (Waymo). Only competitor with Microsoft Office (Google Workspace). Fully owns DeepMind, who pioneered Machine Learning, which was the foundation for what is now AI. Amazon's FCF is exploding already and margins in retail are still low at the moment. FCF in 2025 will be at least $120 billion, it's insane. They have cemented their position, no chance any competitor can build their kind of network in the US ever again, because of the simple reason money will never be free again like it used to be pre-2022. They dominate in cloud computing (multiple times larger than Azure from Microsoft) and that sector still has a big runway for Market-beating growth the next 15 years. Amazon is not even buying back shares yet! I guarantee you these two will outperform even the Nasdaq over the next 15 years. Contrary to popular belief, Google and Amazon aren't even that expensive at the moment. Especially compared to Nvidia, Costco, Microsoft, Apple, Novo Nordisk, Illumina and the likes. With the other 50%, buy an S&P500 tracker and a world ETF like IWDA or some other individual stocks you like. Slowly dip your toe in picking stocks, its harder than you think. I would recommend watching/reading Warren Buffett stuff and the Berkshire annual letters to shareholders. I would also recommend Terry Smith and his Fundsmith fund. Look up the stocks in his portfolio. Watch Joseph Carlson on YouTube. Focus on free cash flow yield, free cash flow growth, margins, and a strong moat (economic/strategic adventage that shields a company from competition and gives them pricing power). Perfect example of this is Intuitive Surgical with their DaVinci-robot. There is literally no competition in robotic surgery systems. EVERY SINGLE tool used in every single robotic surgery performed worldwide is sold by them. Quality is important. Valuation too. You're 23, if you live withing your means, invest steadily and don't blow it on something stupid, you'll be rich by 45. Good luck mate, you're already ahead of the curve!

CanYouPleaseChill

Market cap of $495 billion and trailing free cash flow of $2.5B. That's a P/FCF of almost 200 with a real possibility of negative free cash flow in the upcoming quarter. Clearly has a lot further to fall. Don't look at sentiment; look at facts.

8700nonK

3.33% FCF is not bad, for a company with strong international presence and products in demand. How is it a commodity? How many can offer the price proposition vs what you get? That's why they can increase prices and still retain subscribers.

cigarettesandwater

Yikes. First off, you need to review cash flows instead of looking at income statements for a company like Netflix. You'll then see that AFTER stockbased compensation, you're best bet in terms of cash flow is between 7-9B. Say that's 8, thats a 30+ PE, or less than 3.33% FCF yield... for a commodity... in a crowded space.. with increasing competition... that requires constant reinvestment to stay relevant... Yea there are a lot better companies to invest in than Netflix.

SwellsInMoisture

Ticker Symbol: WOLF P/E: 10000.00 P/E Rank: 17.15 P/S: 3.79 P/S Rank: 32.30 P/B: 2.87 P/B Rank: 40.81 P/FCF: 10000.00 P/FCF Rank: 16.40 SHYield: -0.72% SHYield Rank: 14.42 EV/EBITDA: -49.10 EV/EBITDA Rank: 16.44 Overall Score: 137.52 6 month price momentum: -22.11% Ticker Symbol: INTC P/E: 92.51 P/E Rank: 38.28 P/S: 2.78 P/S Rank: 41.15 P/B: 1.43 P/B Rank: 68.52 P/FCF: 10000.00 P/FCF Rank: 16.40 SHYield: -1.31% SHYield Rank: 12.91 EV/EBITDA: 18.68 EV/EBITDA Rank: 50.10 Overall Score: 227.36 6 month price momentum: -3.23%

SwellsInMoisture

I have never even heard of them, but gooooodness! Ticker Symbol: QRTEA P/E: 10000.00 P/E Rank: 17.15 P/S: 0.04 P/S Rank: 99.83 P/B: 1.03 P/B Rank: 82.06 P/FCF: 0.57 P/FCF Rank: 99.94 SHYield: 0.00% SHYield Rank: 32.88 EV/EBITDA: 7.14 EV/EBITDA Rank: 86.28 Overall Score: 418.15 6 month price momentum: 102.00%

grizzly_teddy

> The fact that they are and will be FCF negatives and need billions to invest makes the case for a raise No, it doesn't. Worst case scenario they are going to be cash negative this quarter simply because of the huge investment into GPU/CPUs. That cashflow will be around $1-$2b. With a cash reserve of $30b, that really is nothing, especially if it is a one off.

yurgkretz

I like FCF yield.