8/5/24 - $sono - Still tough to own > $108/5/24 :: VROCKSTAR :: NASDAQ:SONO
Still tough to own > $10
- taking another look at some throw backs on my watchlist after some market carnage
- love the product and brand but remember fam company is not equal to stock
- what i struggle with most here is that their sales r flat this year and it's a one-big-quarter (holiday season) stock, and it's hard to a. have a read here into a consumer-sucks environment and b. cons. has a lot of other consumer names that on the mgn are producing better returns/ cash/ growth
- so back to growth, flat sales growth... let's look at N12M EPS... slightly more than 40c. let's use 40c given analysts are perma-bulls. what would i pay for a consumer flat sales, cash gen is mostly stock comp (not great)... at most? 12x? let's even say 15x to be generous (b/c NASDAQ:LULU is 16x and actually growing with solid cash gen - for comparison sake). pull 1x turn off the multiple. if that's the case, i'm at 40c x 15x = $6.
- i realize there's some R&D value here, they are net cash which defn helps!... so let's add a buck or let's do 2 bucks to augment the case. that's still a $8 stock. even if i rounded up another $2 i'm still at $10 at best and the stock is a. weak and b. $12, not $10.
- i've set a target at the nov '23 lows of ~$10. does it retest? idk. should it? idk. EPS this week on Wed Aug 7 will drive some ST moves to be sure.
- but given the opportunity set of options today, it's not very high up on my would-own list.
- just one perspective
- lmk if u see it differently
have a good week my friends (Tues onward that is!)
V
