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>Roblox was crushed on 4Q21 earnings, owing to a weak guidance for January due to tough Covid comps.</li>
<li>We think the selloff is overdone given the still strong user growth and the "of course" normalization that was due to occur after incredible growth for the past two years.</li>
<li>Once growth normalizes midyear, the platform narrative will resume as reaccelerating core growth and 2023 advertising growth comes into view. A likely double from here.</li>
</ul>


Roblox was crushed on 4Q21 earnings, owing to a weak guidance for January due to tough Covid comps.
We think the selloff is overdone given the still strong user growth and the "of course" normalization that was due to occur after incredible growth for the past two years.
Once growth normalizes midyear, the platform narrative will resume as reaccelerating core growth and 2023 advertising growth comes into view. A likely double from here.


Roblox 4Q21: Metaverse or Optical Illusion?

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

<ul>
<li>Total revenue jumped to $361M, 77% YoY, and the number of active merchants reached a record of ~168,000 in FY Q2 2022.</li>
<li>The number of active consumers skyrocketed by 150% YoY to 11.2 million, and GMV more than doubled year-over-year in reporting period. </li>
<li>Growth of key operating and financial metrics was driven by the strong holiday season, adoption of Shop Pay Installments, and partnership with Amazon. </li>
</ul>


Total revenue jumped to $361M, 77% YoY, and the number of active merchants reached a record of ~168,000 in FY Q2 2022.
The number of active consumers skyrocketed by 150% YoY to 11.2 million, and GMV more than doubled year-over-year in reporting period. 
Growth of key operating and financial metrics was driven by the strong holiday season, adoption of Shop Pay Installments, and partnership with Amazon. 


Affirm FY Q2 2022 Earnings Review: Leading BNPL Player Maintains Its Hyper-Growth Trajectory

Independent Research, US Dominant Players, Investment Talk

Investment Talk

Independent Research, US Dominant Players

Investment Talk is for readers who wish to learn about companies that are potentially outside of their own circle of research, as well as those who are longing to become part of a community of like-minded investors and learn more about investment research. I would describe myself as a long-term investor who typically takes a 3Y to 5Y outlook, before reassessing once that period matures. I follow the adage that one should research, reach a conclusion, and then verify and continue to hold so long as the thesis remains intact. My own investing style is one that seeks to find dominant players within their respective market who have shown signs of monopoly or oligopolistic behaviour, unlikely to be disrupted, in tandem with discovering market disruptors who have a high likelihood of disrupting their respective market. Equally (and weighted accordingly) I seek to discover more nuanced, misunderstood, situations with a shorter time frame.

<ul><li>As I perused the headlines yesterday, I came across a CNBC article that suggested Peloton would be hiring McKinsey to “review its cost structure and potentially eliminate some jobs”. </li><li>Whilst Foley is not likely to be sleeping with fishes anytime soon, the CNBC report suggests that 12% of Peloton’s physical store count might be on the chopping board</li><li>Whilst I still continue to believe Peloton will have success in their market over the longer term, this does not equate to attractive shareholder returns</li></ul>

As I perused the headlines yesterday, I came across a CNBC article that suggested Peloton would be hiring McKinsey to “review its cost structure and potentially eliminate some jobs”. Whilst Foley is not likely to be sleeping with fishes anytime soon, the CNBC report suggests that 12% of Peloton’s physical store count might be on the chopping boardWhilst I still continue to believe Peloton will have success in their market over the longer term, this does not equate to attractive shareholder returns

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Despite its recent partnership with Amazon, we believe the negatives outweigh positives for Affirm Holdings. As such, we expect further downside risk for Affirm in the next 6-12 months.</li>
<li>Key risk factors for Affirm include slowdown in growth rate of e-commerce, over reliance on Peloton, and the addictive consumption pattern of paying for items one cannot afford.  </li>
<li>The valuations of Affirm Holdings appear to be overvalued as compared to its peers. An additional 30% downside from current levels would be about $77 per share for Affirm Holdings. </li>
</ul>


Despite its recent partnership with Amazon, we believe the negatives outweigh positives for Affirm Holdings. As such, we expect further downside risk for Affirm in the next 6-12 months.
Key risk factors for Affirm include slowdown in growth rate of e-commerce, over reliance on Peloton, and the addictive consumption pattern of paying for items one cannot afford.  
The valuations of Affirm Holdings appear to be overvalued as compared to its peers. An additional 30% downside from current levels would be about $77 per share for Affirm Holdings. 


Affirm Holdings - Addictive BNPL Could Backfire in 2022

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<p>In this note we look at potential balance sheet issues for Peloton. We estimate Peloton used c650mn in cash in 1Q22 and we believe Peloton could move into a net debt position in the next quarter, excluding long-term operating leases. This represents a cash burn of about 2bn USD in one year on our estimates. We have previously dug into the cash flow problems at Peloton previously, in our high conviction bear note which was upended by the pandemic.</p><p><a href="https://www.smartkarma.com/insights/2020-high-conviction-is-there-a-problem-with-peloton" target="_blank" data-smartkarma-citation="insights:35269" rel="noopener">2020 High Conviction: Is There a Problem with Peloton?</a> </p>

In this note we look at potential balance sheet issues for Peloton. We estimate Peloton used c650mn in cash in 1Q22 and we believe Peloton could move into a net debt position in the next quarter, excluding long-term operating leases. This represents a cash burn of about 2bn USD in one year on our estimates. We have previously dug into the cash flow problems at Peloton previously, in our high conviction bear note which was upended by the pandemic.2020 High Conviction: Is There a Problem with Peloton? 

United States

Peloton Interactive, Inc. provides sporting apparels and products. The Company offers tops, bras, bottoms, watch bands, hats, bags, and workout bikes for indoor cycling products. Peloton Interactive serves customers worldwide.

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Peloton Interactive (PTON US)

Roblox 4Q21: Metaverse or Optical Illusion?

2-3% MoM billings growth in January was the (negative) headline, but continued strong DAU growth and Hours Engaged are proof that the underlying...

Aaron Gabin

Affirm FY Q2 2022 Earnings Review: Leading BNPL Player Maintains Its Hyper-Growth Trajectory

Affirm’s valuation looks attractive after market sell-off. Leading BNPL player continues to grow rapidly and maintains its hyper-growth trajectory.

Andrei Zakharov

Peloton and the Kiss(es) of Death

As I perused the headlines yesterday, I came across a CNBC article that suggested Peloton would be hiring McKinsey to...

Investment Talk

Affirm Holdings - Addictive BNPL Could Backfire in 2022

Key risk factors for Affirm include slowdown in growth rate of e-commerce, over reliance on Peloton, and the addictive consumption pattern of...

Douglas Kim

Peloton – Assessing the Balance Sheet

In this note we look at potential balance sheet issues for Peloton. We estimate Peloton used c650mn USD in cash in 1Q22...

Rickin Thakrar

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