6/13/24 :: VROCKSTAR :: 
TDOC
revisiting this one b/c i had flagged to myself to "not care" until we hit $10. well here we are on 6/13, at $10.
so what gives, do we start buying, get interested or just hand sit.
my bias is to hand sit still. the tape is dramatically different than when i made this comment in early april - and this company as well as others that are "unprofitable, not opex leverage inducing, not growing like a weed"... the market says i don't want.
we gotta respect mr. market. those r the rules fam.
so what's this thing objectively worth given meager (LSD - low single digit) sales growth?
given no opex leverage? given they seem to be a marginal share loser in what would seem like a promising category of telemedicine that defn got a pull-forward from covid but is still giving some back...
trends.google.com/trends/explore?date=all&q=/g/11c3krgywp,/g/11df0pkp5v,/m/04dqyb&hl=en
i'd posit one way to look at this is to use my R&D rule of thumb. at 25% discount rate at $350 mm a year invested then double that - it's $2.8 bn - a 25-30% bump from the enterprise value today.
but the mkt won't pay for that logic - bc the results suggest the discount rate on R&D is either unknowable or much much higher. so $2.8 bn is the ceiling valuation. and 25-30% upside isn't amazing (we just did 15% a day in
AVGO results - so that's the bar guys, good charts, good results, rips).
at $8 we basically get this thing at a discount to gross profit, which buys us some time to turn that opex inflection, see a few quarters and probably not go too much lower and it's in play (take out potential).
conclusion - for those who know the company well, and if ops r looking decent - it's an obvious buy here - very shorted. but for me - that covers everything, i just don't see the allure of jumping into a difficult turn around, chart, financials. i need a heady discount.
so i'm setting a flag at $8 and we update this thinking if/as we get there. and if it just rips from here, we let it go. congratulate those putting their nuts on the line. but i won't be one, not yet and not in this tape
V
TDOCrevisiting this one b/c i had flagged to myself to "not care" until we hit $10. well here we are on 6/13, at $10.
so what gives, do we start buying, get interested or just hand sit.
my bias is to hand sit still. the tape is dramatically different than when i made this comment in early april - and this company as well as others that are "unprofitable, not opex leverage inducing, not growing like a weed"... the market says i don't want.
we gotta respect mr. market. those r the rules fam.
so what's this thing objectively worth given meager (LSD - low single digit) sales growth?
given no opex leverage? given they seem to be a marginal share loser in what would seem like a promising category of telemedicine that defn got a pull-forward from covid but is still giving some back...
trends.google.com/trends/explore?date=all&q=/g/11c3krgywp,/g/11df0pkp5v,/m/04dqyb&hl=en
i'd posit one way to look at this is to use my R&D rule of thumb. at 25% discount rate at $350 mm a year invested then double that - it's $2.8 bn - a 25-30% bump from the enterprise value today.
but the mkt won't pay for that logic - bc the results suggest the discount rate on R&D is either unknowable or much much higher. so $2.8 bn is the ceiling valuation. and 25-30% upside isn't amazing (we just did 15% a day in
AVGO results - so that's the bar guys, good charts, good results, rips).at $8 we basically get this thing at a discount to gross profit, which buys us some time to turn that opex inflection, see a few quarters and probably not go too much lower and it's in play (take out potential).
conclusion - for those who know the company well, and if ops r looking decent - it's an obvious buy here - very shorted. but for me - that covers everything, i just don't see the allure of jumping into a difficult turn around, chart, financials. i need a heady discount.
so i'm setting a flag at $8 and we update this thinking if/as we get there. and if it just rips from here, we let it go. congratulate those putting their nuts on the line. but i won't be one, not yet and not in this tape
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.