6/12/24 - $lz - interesting at $8 but still unconvinced; need G!

2024年6月12日

6/12/24 - vrockstar - LZ - scanning some fringe names this morning that are on a long list of "haven't check in a while". and had sent this text to a friend that's closer to this stuff to inquire his opinion. would love to hear yours in comments if any? this is my current thoughts/ and that text (verbatim):

"You have an opinion of legalzoom (LZ)? It’s been on my internet cos list for ages and doing some fringe scans this morning. Margins are good, they are now spending less every year on opex (both sales and R and D), and still growing HSD. Currently profitable. But still a lot of stock comp which is par for the sub 5-10bn cap cos (it’s 1.4bn). Net cash and health balance sheet. 2x sales for 7-8% growth. What gives. Are they just running a treading water race (seems this way). If tech isn’t growing at least 15%, there’s someone that’s doing faster and eating the industry pie. That’s my sense. And if opex is declining this is then solving for profitability. At 1.4bn you don’t do this if you plan to scale this into an industry leader esp w net cash balance sheet and having spent so much already to have the brand established. Am I thinking about this the right way? My conclusion is every asset has a price so if I got it for 1.25-1.5x sales or say 800mm, interesting but not convinced it’s more than a trade (eg compounder). Alternatively if mkt rips today on inflation/ fed… this is the last horse that will run fastest. Clear sidelines for me unless you think the product/ industry is still beginning of S curve and so world needs to catch up to doing online legal stuff. I’m which case it’s cheap, by a lot. What’s your take? I’ll throw it to my fam and see if anyone comes back w thoughts too.

2024年7月9日

註釋

- company kicking CEO and saying 'c ya'
- chairman in the CEO spot
- taking down FY revenue mid pt 5%
- need to focus on subscription and focus on profitability
- profitability focus ex growth + high stock comp was what was driving me to not give a hoot at $8.
- stock gonna open sub $7 tmr am
- still wouldn't own it in this tape, a lot has changed and still remains a tough one to buy. you gonna buy small caps, follow me on OLO buy today
- let's set our trigger at $5. that puts it close to the $800 mm valuation i mentioned in the post from 6/12.

- until then ignore unless you wanna try to be a hero. mkt is too complicated for names that will be small position trades for me (as mentioned in previous posts).
- lmk if i've missed anything k?

have a good rest of week my fam

V