VROCKSTAR

VROCKSTAR

5/8/24 - vrockstar - head scratcher here guys. there's literally no valuation even close to where it's trading where I'll need to paint the logic. sincerely, if you own this and want to debate in the comments - pls do. this implies such insane revenue growth and profitability in the fwd years that... well in '20 and '21... perhaps it could be a great meme. but...

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5/8/24 - vrockstar - weird one to write about - but revenue trends are actually solid over a pretty multi-year period. a non-"consumer" affected med-tech that's flexing opex. really hard to value on the fly, but if i conservatively say the $50 mm revenue in 2-3 yr is broadly correct at a 3x multiple (it's pseudo-software GM's w good R&D budget), but underscaled...

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5/8/24 - vrockstar - really a tough one to own b/c there are good cases to stay away (contract questions, issues in Cali) but they continue to beat, the conf call right now reflects great mgmt vision to grow the addressable pie, upgrading ARPUs (as lower contract sales in past roll over), mgn expansion, FCF growth +30% yoy. if you take the 1Q result and annualize...

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5/8/24 - vrockstar - would like to buy it, could be a trade to the mid/ high 60s fam, but likely won't stick and act as exit liquidity for guys needing to size manage. what's more likely if you saw other ecomm/ retail, lulu comes to mind, is a gamma drag thru the day all else equal, all pumps being sold. the math here is "expensive" we all know it. you know it, i...

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5/8/24 - vrockstar - would LOVE to own this in the $6s, do we get there today? "probably not". what's my math here - simple. name has debt, and despite cash gen we're not paying it down in any "one year+" context. so it really comes down to say FCF yield, which at current open levels is in the ~6% range. not high enough for a tough industry/ high financing...

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5/7/24 - vrockstar - one of these names where it's already 1) reached take off velocity and prints have been good 2) not a cash burner and 3) net cash balance important in this macro 4) pick a metric for valuation 40-50x ebitda probably not the right one given the 20-30% rev cagr depending on how bearish/ bullish you are 5) likely a name that has a bid given size,...

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5/7/24 - vrockstar - 8 bn + on a complicated capital stack - an obviously "distributed" IPO (you still hold the bag? why?) and 8x sales on lofty 20-25% cagr revenue numbers (we all know these will get revised downward - banks need to shine up the pump to sell the deal fam). frankly, burning one of my posts to warn you all that if you own this, it might be a good...

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5/7/24 - vrockstar - 2ish times sales, inflecting profitability, not a cash burner (by a large mgn), 20% cagr top line growth... this is defn a buy. HOWEVER, it's not a must own into this print, consider their customers that are thriving on the rates and bidenomics. i'd look to dip buy this ONLY after a print that's a pass but "not good enough". any beat that...

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5/7/24 - vrockstar - simply too expensive in this tape even for a beat. will need to smash for stock to go higher. i'll be shorting any pop/ regarless of the print. i'll save the space and not explain why it's a short/ and i'm not shorting - but i'd stay away at best and if you own it, consider trimming > 10x sales sub 2.5% fcf yield, more epensive on PE than mag...

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5/6/24 - vrockstar - speculative here, don't know name but think this is a good setup for a long - took a small punt AH at low $13s after seeing the decent print and guide up (most are signaling issue w/ 2Q guide... which in this environment means they continue to take share and in a good environment/ reversal they'll be crushing the ball). hard to size up the 4x...

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5/6/24 - vrockstar - hard to fade this sector winner. 15x sales is defn expensive esp if any miss/ guide lower. i do see potential for follow thru, however, on a beat so don't see the merit to a. shorting and/or b. selling any size into the print. i'm a v interested buyer here, would be looking for a guide to spook ppl a la other b2b names and target the low 100s...

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5/6/24 - vrockstar - losing a post here to simply alert my fam of ppl who read these that this is type of name that's getting killed on anything less than a stellar print. 10x sales for high single digit plus growth and decent but not awesome profitability (1-2% fcf yield) is going to probably get dumped on a beat/ up 5-10% and not stick. any miss sends this thing...

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5/6/24 - vrockstar - like the narrative here all around (ai-support) but w/ AMD's comments, rates holding back b2b spending... i could see more risk to longs here vs. shorts. so while i think the right way to look at this is '25 EPS, any re-rate to '24 here would pull that $2.7/shr down to perhaps 2.5$ and that's about 12-15% annualized cagr depending on how...

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5/6/24 - vrockstar - not gonna short this b/c i agree w the bulls on the "LT" here... but nearly 20x sales, pretty forecastable model and unlikely to "smash" raise limits my interest in a heady tape. keep in my any big upside probably gets distributed/ sold down (there's your short if so inclined/ possibly ex post). any miss or growth reset dumps this 20%...

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5/6/24 - vrockstar - punting long here. Spac's all look like trash, so for s/t that's trading like the rest 1) the lift to sustained bid is defn requiring a great catalyst - and this seems like a decent biz w/ potential benefits of a stay-at-home-things-r-too-expensive-eCONomy and 2) cash gen, not burner, good balance sheet/ clean, "growing" or at least that's the...

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5/2/24 - vrockstar - good print, decent guide (let's be honest, better execution than other B2B style software), valuation reasonable 5x sales w/ opex leverage and good SMB moat and maintaining >20% pa CAGR growth rates w/ a lot of runway. conservatively modeling cash in my prop model, seeing dramatic upside here is probably not likely until we see some sort of...

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5/2/24 - vrockstar - hard to not opine here. valuation is v reasonable compared to the TNX and other big liquid tech considering play on AI integration (tools), VR/AR (even if it's small doesn't matter at all... rn - it's relevant for longevity of growth), services will continue to grow in the mix. lots you can do here. they have so much cash they can only do one...

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5/2/24 - vrockstar - tough setup b/c the trends look mediocre at best (esp recent ones). long term compounder w/ awesome moat growth at 4x revenue and 2y fwd PE in the high 20s isn't "expensive" for this type of 30-40% cagr. however, any miss/ investment issues here will dramatically reset the # and the multiple... i'm definitely biased long here but would rather...