This stock is poised to reprice higherI don’t think those bailing understand the degree of operating leverage that can be achieved under NBLY’s roll up model. The previous team was heavily focused on acquisitive growth, the new team has extensive operational experience. With close to $1B in top line revenues, NBLY has the potential to generate $50M to $60M in operating income with a relatively modest 5% to 6% operating margin (lower end of the range for companies in the same sector). And this is without accounting for any future growth.
One point to keep in mind, operating in smaller towns and rural areas is usually associated with higher margins due to lower competition (This is one reason Sam Walton started Walmart in rural areas).
Going forward, two forces are going to propel this stock higher: improving operating margins and rapid topline growth due a combination of acquisitions and steady increase in same store sales. This business has the potential to become a fast growing cash cow in a highly defensive industry, this is extremely attractive and very rare.
Having said all the above, the market is in wait and see mode to see if the new management will convert a higher percentage of revenues into a higher operating margin. My guess, this is going to show in the numbers within the next 6 months, at which point, this stock will reprice materially higher.