did you take into account the 20m warrants outstanding that will be exercised by Nov 2023 (they're at $11.50 so not as dilutive as penny warrants but it does impact shares o/s even in net settled)? And what about the 5m additional earnout shares to be paid to Platinum if the stock hits $18 and $20.50?
Thanks for reading and I appreciate the comment! I did take into account the warrants in my s/o estimate. I think the business is extremely cash generative and can probably eat the dilution up, but the risk certainly weighs on the stock. If share count holds flat over the next 5 years at ~159M then the IRR comes down to 13% in my base case.
Seems like it's fairly valued then. $31 price target discounted back at 15% gets you to ~$17. So 5% above current. Good business, but px already reflects it based on your projections
Thanks for reading and you’re exactly right. If you look for 5 year doubles (~15% return) then it is interesting and meets the return hurdle with a slight margin of safety.
Makes sense. You can prob argue for a lower discount rate too so definitely more upside if you're willing to do that. Great analysis otherwise. Really love your work. Couple names that I'd love to see similar analyses of - MCO, MSCI, CRM
enjoyed this great write up! how do you factor in the SPAC promote in your out year price targets? should it trade for a lower multiple vs. peers since they have to pay out 20% of the gains above $10? Thank you!
did you take into account the 20m warrants outstanding that will be exercised by Nov 2023 (they're at $11.50 so not as dilutive as penny warrants but it does impact shares o/s even in net settled)? And what about the 5m additional earnout shares to be paid to Platinum if the stock hits $18 and $20.50?
Thanks for reading and I appreciate the comment! I did take into account the warrants in my s/o estimate. I think the business is extremely cash generative and can probably eat the dilution up, but the risk certainly weighs on the stock. If share count holds flat over the next 5 years at ~159M then the IRR comes down to 13% in my base case.
Seems like it's fairly valued then. $31 price target discounted back at 15% gets you to ~$17. So 5% above current. Good business, but px already reflects it based on your projections
Thanks for reading and you’re exactly right. If you look for 5 year doubles (~15% return) then it is interesting and meets the return hurdle with a slight margin of safety.
Makes sense. You can prob argue for a lower discount rate too so definitely more upside if you're willing to do that. Great analysis otherwise. Really love your work. Couple names that I'd love to see similar analyses of - MCO, MSCI, CRM
enjoyed this great write up! how do you factor in the SPAC promote in your out year price targets? should it trade for a lower multiple vs. peers since they have to pay out 20% of the gains above $10? Thank you!