7/11/24 - $abnb - LT winner but ST headwinds

2024年7月12日

7/11/24 :: VROCKSTAR :: ABNB
LT winner but ST headwinds

- best in class
- generates healthy >4% fcf yield
- 30x PE (in theory) expensive - but opex leverage not normalized in this environment - PF # probably closer to mid 20s in a smoothed scenario
- size factor is ambiguous. 88 bn enterprise value not "small" (by any stretch) but also not a small cap that i tend to think r good beneficiaries of the current environment (read my take on IWM from last night)
- even the chart showing higher lows and higher highs since the '22 low in tech stonks - that's good
- on it's equal weighted SPXEW pair looks sideways, unconvincing - this matters
- if i didn't need to own the stock i'd probably not in the current environment
- google trends are good/ not great - stalled bc of environment

trends.google.com/trends/explore?date=all&q=/m/010qmszp&hl=en

- i'd want to pick this up once we figure out what's happening w/ the rates picture. if this marches higher i have no problem letting it go - i don't think there's an obvious 10-15% upside here into YE w/o a lot of monitoring

- if we get some sort of risk off, this is probably a weak link esp having just dipped below the 200d EMA... last few times it did that we saw a bit more dippity dip. not my bread and butter - but i use TA as a layer to my above thinking.

- i like it more in the $120s. near $150 (like today) i'm ambivalent and see many other names that have better than low teens growth, cash generative, better GM's and trading cheaper than 8x. 6x. fine. 25x on current cons. PE. let's go.

- sidelines.

what do u think?

V

2024年8月6日

註釋

Took it to a 1% position after hours here at about $112.
Guys they r still growing DD, throwing of 4 bn of FCF. tons of cash on balance sheet (which after this move puts valuation under 60 bn ex cash) which is high SD's FCF yield and growing revenue DD. It's a buy. Idk if we go 10%, 15%, 20% lower from here. but 30%? 40%? 50%? no. so this is why we stack ammo. we can start to build positions in the context of good platforms, moat, good FCF generation stuff when the mkt is offsides. It's -30% from when I posted this above. to some degree that's played out. as our uncle warren says, be greedy when others are fearful. will write up more if/as the week evolves.

just wanted to drop a quick update here on my move.

V

2024年8月6日

註釋

like what i'm hearing on the CC here, even tho the anal ists are a bit skeptical

- they will invest a bit more
- but very visionary leadership and clear communicators
- a. we have property owners and people with people with time... we will combine the two (cool), b. they will launch more services/ add ons (good mgn in time), c. will make sure more affordable options/ putting supply or hotels on platform (expanding pie)
- valuation rn is ~25x PE. it's not cheap. i like FCF generation already.
- but if things get weird and EPS grow is only small DD - call it 12-15%... and don't put 1.5x PEG (like i'd want to do but for conservatism) put 1.35x peg on it until growth visibility returns. so 15x * 1.35 = 20x on $5 EPS = ~100 bucks.
- so if it's 4.5 not 5... we're 90 vs. 100. vs. $110 after hours (where i've really loaded up), that's about 15-20% downside I believe max.
- i'm about 2% position here. won't average down unless we get closer to $100 where risk-reward will skew much more +ve.
- i pay a fair price for a great asset not a great price for a fair asset - ABNB is a great asset and today's AH price is a fair price in a LT context
- this environment is tough. we could go lower of course. but i think we're much closer to floor here vs. the converse hence my legging in from 0 and my initial comment above.

hope this helps. pls comment if you see it differently.

V