Leverage ratio down to 1.2x Adj. EBITDA from 1.3x in Q3 and 2.8x YoY
All time high renewal-rate of 88%
Guides # of members to be flat or better in 2021
Guides MFI growth to be 4-5%
Plan to open 6 clubs in 2021 and 10+ in 2022
Mgmt. expects 2021 membership, sales, and profitability to be well ahead of historical averages
Digitally enabled sales up 168% YoY
Long-term growth will be well above guidance given at 2018 IPO
"We expect dramatically higher unit growth rates as we push towards 10-plus units per year allowing us to tap into considerably expanded addressable markets and grow share"
Easy renewal enrollment steady at 70%
Higher tier penetration up to 31% from 28% YoY
Membership per club for new clubs is 20% higher than average
Expect construction costs to be flat as lower real estate costs offsets higher lumber + steel costs
New member basket size up 19%, same-day delivery usage 6x the normal member usage, app usage 2x the rate of normal members
Meaningful pickup in Capex in 2021 related to acquiring land and buildings
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The good: flat - LSD membership guide is well above consensus, gross margin expansion in the face of input inflation, taking share in a ton of areas, 10+ store openings in 2022 and onward provide a clear long-term guide
The bad: No EPS, EBITDA or sales guidance
Like several COVID-winners, 2021 is going to be a hard year for comps and mgmt. clearly wants to compare 2 year growth to 2019 numbers vs. YoY growth from 2020 numbers
The short-term downside here is relatively limited by what will still be $2.5 - $2.8 in EPS in 2021
Moving to 2022 (maybe 2023)-2025, ~3-5% store count growth + 3-5% comps + ~5-6% MFI growth (includes potential fee increase in '22-'23) gets you 6-10% sales growth pretty easily
EPS will grow faster as cost controls are maintained + BJ's enters higher margin services areas
So without margin expansion, there's a pretty clear path to >10% EPS growth for the foreseeable future post-2021
I think the EPS multiple rerates to near 20x in 2022 if this happens, but again, shares will likely be range-bound by the multiple in 2021 given the hard comps
Mgmt. did mention that there will have to be additions to distribution as they head further west, but this doesn't come into play till likely 2023
Shares are basically flat which is a fair reaction IMO. Analyst revisions are likely slightly downward given lack of visibility.
There's a lot to like long-term for a company trading at 14x NTM EPS
Given what will be a lumpy 2021, I may trim to adjust my position size in the coming weeks (currently 8%) and reallocate into what I believe are better opportunities, but no actions today.
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129% full year dollar-based net retention (includes a bad Q3)
Cloud gross margin of 61.7% vs. 54% Q4 '20
Significant improvement in OCF
Important tidbits from the call:
"You will definitely see cash flow revert to positive this year"
"51% of software bookings coming from cloud in Q4" (onto the back half of the model transition)
"Triple digit growth in observability"
"1/3 of cloud customers are new customers"
"In Q4, we saw procurement patterns that were closer to what we experienced in Q1 and Q2, and we were able to close transactions with several accounts whose deals slipped in Q3."
"We've seen that when our customers move to cloud, the investment they make in Splunk expands"
$JYNT is going to need a massive beat and raise to justify the 73% YTD performance
This is a solid reopening play with a crystal clear path to consistent 20+% growth, but it's now trading at 53x NTM EV/Adj. EBITDA with 15% Adj. EBITDA margins growing revenues at 24% in 2021
I'm considering trimming ~20% of my position before earnings on Thursday
$JYNT did beat revenue consensus by 12.5% in Q3 and posted EPS of $0.11 vs. $0.03E, so there's precedent for a massive beat and raise
It might take a $20M Adj. EBITDA guide (vs. current $11M) to support shares at $46.
I don't like to trim companies I believe in, but even great beat and raise quarters where shares have not run into the print have been getting punished, so I can't imagine this one goes well.
One interesting angle on $EVO is the dividend-growth story that is quickly emerging.
Mgmt. has a policy that ~50% of consolidated net profit be returned as an annual dividend.
$EVO is now yielding .67%, which doesn't sound to appealing as a dividend play.
However, most dividend paying companies aren't near-monopolies growing 53% YoY with significant operating leverage and a variable dividend policy tied directly to net profit growth
Net profit grew 90% in 2020 (the dividend grew "only" 62% because of dilution mainly from the NetEnt acquisition)
There likely isn't another NetEnt-sized acquisition this year, and as $EVO grows, the dilutive effects of small M&A will decrease substantially