8/21/24 - $frsh - Probs a buy ~$12 but want dip
8/21/24 :: VROCKSTAR :: 
FRSH
Probs a buy ~$12 but want dip
- growth is undeniable. it's >20%. valuation on sales is high 3's. not bad.
- stock comp is pretty large, meh. par for the course and more forgivable if stock wasn't such a loser, but i think it's still more environment than anything else (esp. for SMB and this situation probably can't yet see dawn).
- really a tough one to say "i'd pay 3x sales, but 3.5 is still too much". i suppose the way i'd look at it is this - operating leverage excluding R&D on the gross profit line was inflecting up until the last quarter they reported. they basically spent a lot more on sales and didn't get that flex on the gross profit as was happening on prior quarters. go check it out... look at trading view's financial tab, quarterly, income statement and compare the QoQ lines of "gross profit" and "sales" (need to pop open the opex arrow to see it so you don't include R&D).
- for me the above is the reason it's not a "must own" bc again, the environment for B2B/ SMB still sucks and won't likely inflect until later in 2H and possibly a '25 event (tho the stock will front run this, so we have to anticipate the anticipation).
- i set a target to re-evaluate at the recent lows b/c that's where this thing is headed if we get a risk-off event - it won't be the first software name people rush in to buy. that's where we can have some room to think 'do i want to own this'. it's non obvious here. if it runs from here, god bless you holders, i wish you the best. maybe i join eventually.
$11 is where i return with comments if i enter.
V
FRSHProbs a buy ~$12 but want dip
- growth is undeniable. it's >20%. valuation on sales is high 3's. not bad.
- stock comp is pretty large, meh. par for the course and more forgivable if stock wasn't such a loser, but i think it's still more environment than anything else (esp. for SMB and this situation probably can't yet see dawn).
- really a tough one to say "i'd pay 3x sales, but 3.5 is still too much". i suppose the way i'd look at it is this - operating leverage excluding R&D on the gross profit line was inflecting up until the last quarter they reported. they basically spent a lot more on sales and didn't get that flex on the gross profit as was happening on prior quarters. go check it out... look at trading view's financial tab, quarterly, income statement and compare the QoQ lines of "gross profit" and "sales" (need to pop open the opex arrow to see it so you don't include R&D).
- for me the above is the reason it's not a "must own" bc again, the environment for B2B/ SMB still sucks and won't likely inflect until later in 2H and possibly a '25 event (tho the stock will front run this, so we have to anticipate the anticipation).
- i set a target to re-evaluate at the recent lows b/c that's where this thing is headed if we get a risk-off event - it won't be the first software name people rush in to buy. that's where we can have some room to think 'do i want to own this'. it's non obvious here. if it runs from here, god bless you holders, i wish you the best. maybe i join eventually.
$11 is where i return with comments if i enter.
V
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