RE:RE:RE:RE:LSPD vs ATtruthis0utther3 wrote: 5) is the company trading at a discount to the summation of its annual discounted free cash flow?
Bottom line is this:
If you think they can grow revenues 25% while maintaining margins I think this is a winner. That assumption predicates itself on the success of illumin which so far has proven to be a red herring.
It seems like this stock is much more likely to be a value trap. Meaning, it looks cheap but organic growth is lacking and the only way for them to grow is by acquisition. If that is the case, the stock is likely to drift lower over time as rates rise and investors look for income (i.e. dividends) in the absence of growth.
The worry here is that there seems to be little growth and no income. Not a good place to be in a rising rate environment.
I'm currently looking into the stock.
In your analysis, you can't seem to tag up the share price vs the growth rate, that growth might not be straight up as the legacy business dries up but that short term slowdowns might be a buying opportunity that would have never been there if Q3 didn't happen?
Also, about the rates thing, doesn't that work both ways? As in, if rates are higher, then acquisitions would be cheaper?
It seems to me that since they have a decent FCF coming in, they couldn't be a value trap unless they bought overpriced companies? In the sense that eventually, in time, their accumulated cash would exceed the market cap? (Yes, it would take a while at the current pace, 7-8 years at stable margins)