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4 Dec, 12 tweets, 4 min read
Here are the updated valuations after the recent volatility and Q3 earnings. I am looking at the following metrics:
1. EV/GP NTM
2. EV/EBITDA NTM
3. EV/FCF LTM

This is the consolidated graph comparing EV/GP NTM vs estimates of 3-yr revenue growth:
Of the 82 companies analyzed, 62 have positive NTM EBITDA and 49 are FCF LTM profitable.

Here is the consolidated graph comparing EV/EBITDA NTM vs estimates of 3-yr revenue growth:
For Free Cash Flow, it is harder to have accurate estimates of future numbers.

So for this metric, I prefer to use the last twelve months (LTM).

The following is the consolidated graph comparing EV/FCF LTM vs estimates of 3-yr revenue growth:
By Industry:
E-Commerce
EV/GP NTM and EV/EBITDA NTM

$AMZN 8.1x / 23x
$SE 22.9x
$MELI 14.8x / 66x
$W 6.3x / 59x
$SHOP 57.2x / 220x
$CPNG 10.2x
$ETSY 16x / 41.5x
$OZON 5.1x
$BIGC 13.8x
$GLBE 73x /323x
Fintech and Payments
EV/GP NTM and EV/EBITDA NTM

$V 19x / 21x
$MA 23x / 25x
$PYPL 14x / 18x
$SQ 17x / 89x
$AFRM 83x
$SOFI 18x / 112x
$UPST 14x / 59x
$LSPD 17x
$DLO 46.8x / 70x
$MELI 15x / 66x
$COIN 12x / 18x
Social Media and Ad-tech
EV/GP NTM and EV/EBITDA NTM

$FB 7.6x / 12.4x
$GOOGL 11x / 15x
$PINS 9.2x / 24x
$SNAP 25x / 99x
$TWTR 8x / 21x
$ROKU 15x / 61x
$TTD 36x / 77x
$MTCH 15x / 31x
$MGNI 6.8x / 17x
$PUBM 9x / 19x
Mega Cap
EV/GP NTM and EV/EBITDA NTM

$AAPL 16.6x / 21.6x
$MSFT 17.2x / 23.6x
$GOOGL 11.1x / 15.4x
$AMZN 8.1x / 23.3x
$FB 7.6x / 12.4x
$TSLA 60.4x / 69.5x
$NVDA 37x / 60.6x
$NFLX 19.5x / 37.6x
SaaS
$ADBE 19x / 33x
$AMPL 40x
$CRM 11x / 29x
$CRWD 31x / 141x
$DCBO 16x
$DDOG 50x / 252x
$DOCN 21x / 52x
$DOCU 14x / 57x
$MDB 44x
$MNDY 32x
$NET 79x
$NTNX 5x
$OKTA 26x
$PLTR 23x / 67x
$SNOW 81x
$TWLO 22x / 152x
$U 39x
$VEEV 23x / 44x
$ZI 30x / 61x
$ZM 15x / 28x
$ZS 49x / 298x
Other
EV/GP NTM and EV/EBITDA NTM
$ABNB 18x / 55x
$AMD 19x / 31x
$CNSFW 17x / 21.5x
$EVVTY 14x / 20x
$FVRR 14x / 131x
$GDRX 22x / 59x
$PTON 8x
$RBLX 27x / 73x
$RDFN 9x
$OPEN 11x / 157x
$TDOC 9x / 46x
$UPWK 10x / 182x
$XPEL 16x / 30x$Z 6.6x / 126x
Some of the biggest multiple contractions since 23/oct (last post):
$MELI 23x to 15x
$SE 37x to 23x
$DLO 79x to 47x
$LSPD 45x to 17x
$CRWD 49x to 31x
$ASAN 67x to 33x
$MNDY 55x to 32x
$DLO is one of the quickest contractions in multiples I have seen this year.

In just a few months, it went from 116x EV/GP NTM in August, 79x in October and now 47x.

It is the result of a combination of high growth in fundamentals and a 52% drawdown in price from ATH.
Valuation is just one of many metrics to take into account when investing, but it is useful sometimes to spot opportunities and potential risks.

Particularly now that we are ending the FED's covid QE program.

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More from @Investing_Lion

Lion Profile picture
24 Nov
We are seeing a continued evolution of multiples contracting in many companies. Some have come back to pre-covid levels (2018-2019) but there are many that still have significantly higher multiples.

Here is a comparison of the changes in multiples we had in Aug 2021 vs Nov 2021
The majority of these companies are seeing multiples contracting. These are some of the most severe in the past 4 months:

Difference between Aug2021 and Nov 2021:
$ROKU -123%
$MGNI -99%
$LSPD -96%
$PTON -93%
$SE -83%
$FVRR -74%
$SNAP -69%
$PINS -40%
$RDFN -39%
$CRWD -34%
$TWLO -30%
$OKTA -30%
$PYPL -19%
$TWTR -18%
$ZM -18%
$MELI -16%

There are some that even with their contraction are still trading at a 50% premium versus pre-covid:
$MGNI $SE $FVRR $PYPL $TWTR
Read 9 tweets
Lion Profile picture
16 Nov
$SE Sea Limited earnings thoughts:

Revenue growth came in strong at $2,688M, which is 121.8% YoY and 17.91% QoQ.

1. E-commerce is executing impressively and grew 25% QoQ (on top of a 30% QoQ growth in Q2).

2. Digital entertainment is showing signs of slowing down.

⬇️
E-Commerce
Orders grew to 1,700 million from 1,400 and 1,100 in Q2 and Q1.
GMV came in at 16.8 billion up from 15 and 12.6 in Q2 and Q1.
Both growth rates in Q3 are slightly slower than Q2 but still very strong and particularly impressive compared to other e-commerce players.
Digital Entertainment

- Bookings were flat in Q3 vs Q2 at 1200M. They were 1200 in Q2, 1100 in Q1 and 1000 in Q4 last year.

- Quarterly Active Users and Paying Users grew 0.5% and 1% sequentially compared to the average 8% and 12% in the last three quarters.
Read 5 tweets
Lion Profile picture
24 Oct
After an interesting and volatile start to the Q3 earnings season, we can see where valuation multiples stand for technology companies.

This is the consolidated graph with all the companies comparing EV/GP NTM vs estimates of 3-yr revenue growth:
E-Commerce
EV/GP NTM

$AMZN 8.1x
$BABA 7.9x
$SE 37.5x
$MELI 22.9x
$JD 4.9x
$W 6.0x
$SHOP 61.2x
$CPNG 10.7x
$ETSY 16.5x
$PDD 10.2x
$OZON 7.1x
$BIGC 18x
$GLBE 104x
Fintech and Payments
EV/GP NTM

$V 22.4x
$MA 26.4x
$PYPL 18.9x
$SQ 21.8x
$AFRM 137x
$SOFI 20x
$UPST 32.8x
$LSPD 45.4x
$DLO 78.6x
Read 8 tweets
Lion Profile picture
22 Oct
I sold $PINS this week.

I am aware that I may realize I was wrong over time but after thinking hard about it, I made the decision and I want to be transparent about it.

Here is why I made this decision ⬇️
$PINS did not have a great report last quarter.

Financial numbers where good (growth, margins, ARPU) but I did not like management talking about "web users" and "mobile users" to justify the user slow down.

However, I did see some truth in it, so I decided to hold and wait
During the quarter, it became clear that $PINS had decided to make a shift in the business they had built all this years to have an e-commerce experience and presence.

These type of transitions are always hard and require laser focus by management to execute correctly
Read 9 tweets
Lion Profile picture
25 Sep
Sustainability of growth in SaaS: Will they accelerate or slow down in 2022 vs 2021?

Here is the % difference NTM - LTM and overall NTM growth:

$BILL Difference: +51% / NTM growth: 101%
$AI +16% / 36%
$SPLK +13% / 16%
$PCTY +12% / 25%
$PAYC +6% / 24%
$ADSK +4% / 18%
% difference NTM - LTM and overall NTM growth:

$CRM +2% / 23%
$DOCN +2% / 31%
$WDAY +2% / 19%
$ZEN +1% / 27%
$ZUO +1 / 12%
$WKME 0% / 29%
$QLYS 0% / 12%
$BL 0% / 20%
$OKTA -1% / 44%
$APPN -2% / 16%
$BIGC -3% / 36%
$FROG -3% / 34%
$SPT -3% / 31%
$PD -4% / 25%
$PLAN -4% / 25%
% difference NTM - LTM and overall NTM growth:

$NOW -5% / 26%
$PCOR -5% / 23%
$HUBS -6% / 35%
$ADBE -6% / 15%
$TEAM -8% / 21%
$MDB -8% / 32%
$SMAR -9% / 31%
$VEEV -10% / 20%
$NET -14% / 38%
$DDOG -14% / 45%
$ZS -15% / 41%
Read 6 tweets
Lion Profile picture
28 Aug
Now that most companies have reported earnings, it is a good time to assess where current valuation multiples stand and the estimates of revenue CAGR for the next few years.

This is the consolidated graph with all the companies:
In this other one, I included some companies that I had to exclude in the first graph:
$AFRM
$SNOW
$DLO
$GLBE

The next graphs are grouped by industry.
E-Commerce

EV/GP NTM and EV/EBITDA NTM (for profitable Cos)

$AMZN 8.4x / 20.6x
$BABA 6.5x / 12.6
$SE 36.4x
$MELI 24.4x / 123x
$JD 4x / 32x
$W 7.4x / 44x
$SHOP 66x / 266x
$CPNG 10.6x
$ETSY 14.1x / 36.64x
$PDD 9.1x
$OZON 8.1x
$BIGC 21.2x
$GLBE 116x
Read 10 tweets

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