Expectations Treadmill Is anyone familiar with the expectations treadmill theory? The idea is that as a management team continues to outperform, the bar gets set higher and higher. As they continue to perform very strongly, they get stuck on a "treadmill" so to speak, where stellar performances become the expectation. Trelawny, would love to get your thoughts on this as well.
I adamently believe that this is the case with Acuity. As shareholders and investors, we have been fortunate to see continuous strong performance out of this company quarter after quarter and I think the expectation has become almost unrealistic.
Q2 was a phenomenal quarter - Self-Serve continues to grow year over year, partners are being added left right and center, and the company full-service offer continues to thrive. The acquisition is clearly a success and we are only at the beginning of seeing the cross-selling opportunities that exist.
Selling is overdone right now as impatient shareholders are being short sighted. As such, I've added more to my position. As a long term holder it is very important to not be spooked by the red on your screen. This company is well below its intrinsic value or even its comp in The Trade Desk, and I expect the company to continue to perform. This is easy a $8 stock in a years time if not sooner.
Fundamentals hold up well, I have little concern on the balance sheet as the company used its cash to pay off outstanding Visible Measures payables. I expect FCFF to be up significantly over the next two quarters as things revert back to the mean.