RE:RE:RE:RE:RE:The jokes write themselvesHere you go:
Revenue Growth YoY = 5.3% (self serve only 4.4%)
Gross Costs Growth = 6.6%
>> Costs growing faster than revenue
Adj. EBITDA = -62.9% YoY (yes, that's very negative)
Here is a recap of the financial negatives:
1. Revenue growing at tepid pace. Since inflation is running between 6-8% depending on Canada vs US you would at least expect revenue to keep up with inflation. Since it is not, it is in fact negative growth in real terms.
2. Gross costs: Meanwhile, media costs are growing faster than they can grow revenue which is of course negative.
3. Operating expenses have grown 40% in Q3 2022 vs Q3 2021 and expected to grow further as Tal mentioned they still need to invest more for illumin self serve to grow.
4. Stock based compensation up about 15% and continues to rise.
Positives:
1. Balance sheet is solid.
Non-financial notes:
- Checked out CEO and not improving. This man spends most of his time sitting on a beach, why would you give him your money?
- No strategy for organic growth. Pushing illumin and self serve but has shown no proof of any traction or customer demand, only rhetoric. Company can claim any revenue is illumin vs legacy, managed vs self serve to serve their purpose.
- Read the questions by Laura Martin, she understands how crappy it is and she got suckered into the Nasdaq IPO so trying to find some silver lining to no avail. Tal burned her over a year ago with his promises of self serve that have never transpired.
I really hate to say it because there are still folks that believe Tal but the man already made all of his money and nothing has changed since then to improve the products/company. You are buying into pure hope and Tal's BS but all of the evidence to date is that it is indeed BS.
If illumin had traction it would show up in the numbers. The truth is - for whatever reason - it is not selling and given the recent call there is nothing new being said that has changed the narrative.
This is why the stock is not really moving. Q3 results were not good, guidance was qualitatively weak, and leadership is severly lacking.
Hope that helps.
Torontojay wrote: Torontojay wrote: truthis0utther3 wrote: Burst my bubble?
If you assume 2-5% sales growth in an inflationary market when their costs are rising and they have to keep paying out more share based comp which offsets the share bubacks than why do you own the stock?
Almost every retail investor out there is conditioned to zero interest rates. You have to look at equity risk risk premium and your alternative to stocks to determine the risk adjusted return. If you ever do the math on that you will find that AT is not a good risk/reward at all but I am probably pushing rope uphill at this point as you seem to be determined to ride this into oblivion.
Torontojay wrote:
truthis0utther3 wrote: So Tal says a good quarter when they lost $1.5MM cin operations but made a gain due to FX.. curious how they always menton constant currency when FX doesn't go their way but downplay it when it does.
All I need to hear bottom line is that they conttinue to grow revenues BELOW THE RATE OF INFLATION which tells you they are actually shrinking not growing. The rest almost doesn't matter after that. You can literally buy a guranteed government invetment with no principal risk and outpoerfrom Actuityads BEFORE applying returns on a risk adjusted basis.
And by the way, comparing to TTD or PUBM is fine but there is no law that says you have to own any of these companies.
Good luck.
I hate to burst your bubble but most companies suffer when the economy is on the verge of a recession. Costs such as energy and labour tend to outpace price increases which explains why margins on the S&P 500 are shrinking. Acuityads has to face wage pressure from its workers as well as growth initiatives in its r&d and marketing. This works with a lag and so spending on growth needs to occur first before a payback is achieved.
If we assume 2-5% growth in sales over the next several years, then from a purely mathematical viewpoint, the company would be worth more than $30m ex-cash. The downside risk is minimal but the upside is attractive to me as a shareholder.
I personally believe the markets is heading lower in 2023 despite the current cpi report. Annualized core inflation or core pce on a month over month basis is still running at over 5%. Acuityads can weather the storm with its cash balance and will likely acquire a company on the cheap when valuations are at all time lows. A win for shareholders in the long run!
I graduated from a Mathematics and Economics specialist degree at UofT. You don't need to teach me about math.
Ok I'll spar with you one last time.
Show me mathematically why this is a bad investment. Then I'll come in after you're done.