8/21/24 - $zi - Probs a buy <$10 on next dip8/21/24 :: VROCKSTAR :: NASDAQ:ZI
Probs a buy <$10 on next dip
- admit, i don't *love* the product but it does seem to generate pretty good cash.
- promised myself i'd take another look sub $10 but the last result two weeks ago kept me looking elsewhere. we've seen the stock bid pretty substantially since (it's also 5 days shorted, high-ish).
- so now i'm coming to it a bit "late" at $9.70. is it a buy? well if we adjust for the debt (which is now 1/4 of the capital stack, so gross up the stock price by ~33% to $12.50 ish and divide by round up $1 of EPS power, and you're at 12x PE. in theory this year is the bottom for EPS. if that really is the case, the stock should re-rate toward the low to mid teens in the coming year. that's a pretty healthy upside (20% at the low and probably even up to 50%). downside here probably 15-20%. so r/r mostly "good".
- similar to the last comment i made on NASDAQ:EXLS tonight, i still like NASDAQ:NXT quite a bit given results have smashed, valuation good, cash good, growth great, and that's my opportunity cost (even though i get it i get it, totally diff industries). either way, if we get a pullback on risk in the coming weeks/ month - not a crash - a pullback - this is one i'd look to buy in the low 9s and ideally back in the 8-handle zone. and we can assess there, k?
anyone more familiar w the product offer than me looking in from the outside. is this something that has legs, or is it a dying product in the MT bc of gen AI/ other lead gen tools?
V
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private comment to myself for context
5/8/24 - vrockstar - taking the L here after hrs having bought at $13.5 and opening at $12.5... it's just too difficult to justify the stock w/ debt as 1/5 of the capital structure in this environment, "no growth" and the inflection perhaps simply requires a better outlook in the economy/ biz picking up/ investing... not happening in the immediate term. don't think you can lose a lot of money here on the name, just doesn't look like a good use of capital at 12-15x PE (12 if you don't adjust for debt, 14x if you do) and probably dead money until we go lower and/or outlook improves as we move into 2H, so setting trigger at slightly above $10 to take another look if/ does go there
