6/24/24 :: VROCKSTAR :: 
PRGS
Looks enticing, but pass
I'll keep this one short and sweet. Pass:
- Growing >10% a year, *okay* but 100% of it is growth of SG&A, so the more selling they put in, the more they sell. it's not scaling
- 3.7x ev to sales is here nor there. I can pay the same amt for
BILL and without the leverage in my capital stack growing >20%. even BILL is tough to buy today, still
- 13x PE cheap and 5.5% implied FCF yield (let's back out the stock comp) is cheap-ish, but i can buy zoom for HSD PE and nearly 10% implied FCF yield (though not growing double digits, there's always some trade off to consider).
- the stock chart vs. the S&P (type "PRGS/SPY" into trading view) is back to 2001/2002 levels. in the last decade it's been down only vs the S&P comp. so still better than cash (nominal stock price still went up), but clearly there were a lot of better boats and especially in software
- will it get bought/ taken out? who knows. i don't care bc the fundamentals aren't really suggesting i need to be involved here. i'll leave it for the PE vultures to pull this one apart and argue for the value they can create. have at it.
pass
- V
PRGSLooks enticing, but pass
I'll keep this one short and sweet. Pass:
- Growing >10% a year, *okay* but 100% of it is growth of SG&A, so the more selling they put in, the more they sell. it's not scaling
- 3.7x ev to sales is here nor there. I can pay the same amt for
BILL and without the leverage in my capital stack growing >20%. even BILL is tough to buy today, still- 13x PE cheap and 5.5% implied FCF yield (let's back out the stock comp) is cheap-ish, but i can buy zoom for HSD PE and nearly 10% implied FCF yield (though not growing double digits, there's always some trade off to consider).
- the stock chart vs. the S&P (type "PRGS/SPY" into trading view) is back to 2001/2002 levels. in the last decade it's been down only vs the S&P comp. so still better than cash (nominal stock price still went up), but clearly there were a lot of better boats and especially in software
- will it get bought/ taken out? who knows. i don't care bc the fundamentals aren't really suggesting i need to be involved here. i'll leave it for the PE vultures to pull this one apart and argue for the value they can create. have at it.
pass
- V
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.