TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<ul>
<li>Promised operating leverage is pushed out until likely 3Q22, but only higher employee RSUs is a permanent inflationary impact.</li>
<li>Overcapacity is almost certainly transitory, as long as the retail business grows, this will be soaked up in a quarter or two.</li>
<li>AWS backlog is booming again. Amazon's current valuation = 12x forward AWS sales.</li>
</ul>


Promised operating leverage is pushed out until likely 3Q22, but only higher employee RSUs is a permanent inflationary impact.
Overcapacity is almost certainly transitory, as long as the retail business grows, this will be soaked up in a quarter or two.
AWS backlog is booming again. Amazon's current valuation = 12x forward AWS sales.


Amazon 1Q22: (Some) Cost Inflation Is Transitory, The Moat Is Not

<ul>
<li>Solid earnings call heightened our conviction in Facebook as a terrific long for the next year.</li>
<li>Reels monetization headwind will become a tailwind... just a question of when. TikTok threat is real, but Facebook knows how to clone other's innovations.</li>
<li>Apple IDFA issues not worsening, Facebook will figure this out eventually.</li>
</ul>


Solid earnings call heightened our conviction in Facebook as a terrific long for the next year.
Reels monetization headwind will become a tailwind... just a question of when. TikTok threat is real, but Facebook knows how to clone other's innovations.
Apple IDFA issues not worsening, Facebook will figure this out eventually.


Thematic (Sector/Industry)

<ul>
<li>We like ServiceNow into earnings. Strong 4Q21 results poised to continue, positive earnings revisions and negative stock action makes this a safe large cap bet.</li>
<li>Facebook intrigues us...incredible potential risk/reward if you think this company shouldn't trade at 10x forward EV/EBITDA. Lots of fear on the name, but reacceleration of revenues and earnings coming.</li>
<li>Don't like the Paypal or Intel setups. Paypal's CFO departure signal he thinks shareholder returns will be weak in the next year or two. Believe him.</li>
</ul>


We like ServiceNow into earnings. Strong 4Q21 results poised to continue, positive earnings revisions and negative stock action makes this a safe large cap bet.
Facebook intrigues us...incredible potential risk/reward if you think this company shouldn't trade at 10x forward EV/EBITDA. Lots of fear on the name, but reacceleration of revenues and earnings coming.
Don't like the Paypal or Intel setups. Paypal's CFO departure signal he thinks shareholder returns will be weak in the next year or two. Believe him.


<ul>
<li>Since Elon Musk bought his 9.2% stake in Twitter, the stock is up 30%</li>
<li>We are doubtful Musk can alter the trajectory of Twitter’s slow product development and weak monetization of direct response advertising and SMB customers.  </li>
<li>Twitter trades 6.5x forward sales / 61x forward earnings / 28x forward EV/EBITDA while Facebook trades 4.5x / 19x / 10x those same metrics…essentially 1/3rd the valuation on earnings.</li>
</ul>


Since Elon Musk bought his 9.2% stake in Twitter, the stock is up 30%
We are doubtful Musk can alter the trajectory of Twitter’s slow product development and weak monetization of direct response advertising and SMB customers.  
Twitter trades 6.5x forward sales / 61x forward earnings / 28x forward EV/EBITDA while Facebook trades 4.5x / 19x / 10x those same metrics…essentially 1/3rd the valuation on earnings.


Musk Buys Twitter, You Should Buy Facebook

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

<ul>
<li>Shares of <a href="https://www.smartkarma.com/entities/bigcommerce-holdings-inc" target="_blank" data-smartkarma-citation="entities:29196:1" rel="noopener">BigCommerce Holdings (BIGC US)</a>  slipped below the IPO price of <strong>$24.00</strong> per share, and at current valuation, we see limited downside risk for BigCommerce stock investors.  </li>
<li>In 2020, <a href="https://www.smartkarma.com/entities/intuit-inc" target="_blank" data-smartkarma-citation="entities:8235:1" rel="noopener">Intuit Inc (INTU US)</a>  offered to acquire BigCommerce for $1.5 billion, according to CNBC and other public sources. Both BigCommerce and Intuit didn’t provide a comment.</li>
<li>Insider selling activity has slowed down noticeably over the past three months and <a href="https://www.smartkarma.com/entities/bigcommerce-holdings-inc" target="_blank" data-smartkarma-citation="entities:29196:1" rel="noopener">BigCommerce Holdings (BIGC US)</a>  insiders sold ~$5 million worth of shares. </li>
</ul>


Shares of BigCommerce Holdings (BIGC US)  slipped below the IPO price of $24.00 per share, and at current valuation, we see limited downside risk for BigCommerce stock investors.  
In 2020, Intuit Inc (INTU US)  offered to acquire BigCommerce for $1.5 billion, according to CNBC and other public sources. Both BigCommerce and Intuit didn’t provide a comment.
Insider selling activity has slowed down noticeably over the past three months and BigCommerce Holdings (BIGC US)  insiders sold ~$5 million worth of shares. 


BigCommerce: Stock Selloff Looks Finished As Valuation Hit $1.5 Billion

United States

Meta Platforms Inc. operates as a social technology company. The Company builds applications and technologies that help people connect, find communities, and grow businesses. meta Platform is also involved in advertisements, augmented and virtual reality.

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Meta (META US)

Amazon 1Q22: (Some) Cost Inflation Is Transitory, The Moat Is Not

Current 2023E has AWS @ $104B and Advertising at $48B in revenues. Both are 45%+ EBITDA margin businesses. Today you are paying 16x forward EBITDA...

Aaron Gabin

Facebook 1Q22: TikTok-Ified

Positively addressed IDFA, spending, and monetization concerns. Facebook is massively undervalued. We think its worth at least $290, which is 50%...

Aaron Gabin

TMT Pre-1Q Earnings Thoughts

Some thoughts about potentially good earnings setups (ServiceNow and Facebook) vs. not so good setups (Paypal and Intel) for the first wave of TMT...

Aaron Gabin

Musk Buys Twitter, You Should Buy Facebook

Why buy Twitter hoping Elon Musk can solve slow product development, and weak monetization of direct response advertising, when you can buy a re...

Aaron Gabin

BigCommerce: Stock Selloff Looks Finished As Valuation Hit $1.5 Billion

Our analysis suggests risk/reward for BigCommerce shares looks strong, and downside potential may be limited as BigCommerce stock is undervalued...

Andrei Zakharov

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