1. There's something sad about the current state of sell-side research. It extends beyond $TSLA. Here's part of a sell side note on $FRPT.
The analyst points out a preference for DCF's with high growth companies because of a "lack of comps." He appears to be serious.
The analyst points out a preference for DCF's with high growth companies because of a "lack of comps." He appears to be serious.
2. I know it's been a while, but discount rates have a fair amount of subjectivity in them. Like, for instance, some qualitative assessment of business risk. Take a look at $FRPT's financials. This is a company that has been talking about operating leverage for years.
3. Our intrepid analytical Odysseus has decided 4.8% is the correct discount rate for $FRPT.
4. Except that beta for FRPT is systematically higher and even a Bloomberg calc suggests WACC is higher. Surely, there must be a good qualitative reason for the generous number?
Nope.
Nope.
We are no strangers to growth stocks and high beta portfolios. We were bullish all through the summer and fall and stayed with a small cap bet and were called lots of bad names for that. And we don't think the Fed is fueling this.
But this market is now just plain stupid.
But this market is now just plain stupid.
