8/12/24 - $gps - Not on sale at $22, buy teens

8/12/24 :: VROCKSTAR :: $NYSE:GPS
Not on sale at $22, buy teens

- great brand, turned it around, good product for "recession"
- google trends and stonk seem to correlate well, clearly a lot of the benefits of results since 2023 have been priced in

trends.google.com/trends/explore?date=today 5-y&geo=US&q=/m/01yfp7&hl=en

- consider 30% of the capital stack is debt (~12 bn enterprise value vs. 8 bn cap). so to get a true PE let's adjust stock at $22 up by (12/8) or 50%. $22 x 1.5 = $33

- multiple on EPS is likely a function of '25 vs. '24 growth (b/c the '24 growth vs. '23 is already in the stock). '25 YoY EPS is +10% vs. '24 (consensus). let's round up and give the benefit of $2. so 33/2 = 16.5x

- 16.5x isn't objective "cheap", but if you continue to think the results will surprise to the upside, you're probably closer to a $25 stock into YE. Not amazing risk/reward in my book, especially since i like to have larger position sizes and can't justify taking this to 2-5% at this pt.

- i'd prefer to be a buyer in the teens if the stock price gets there. I've set a target at $18 to take another look, if/ does get there. so far the consumer brand(s) i prefer continue to be CELH > $LULU.

- gl to the holders, LMK if i've missed anything obvious. of course would like to see it thru a different lens (always!)

V