After revenues they keep over 80% as profits. PE of 24 forward PE of 18 with revenue growth still over 50% but admittedly decelerating. Management still forecasts revenue growth of over 30% for the next 2 years. SEC has dropped investigation of the company. Using free cash flow to buy massive amounts of their shares. Low debt and high cash on hand. The bonus is their e-commerce ads that they just entered into. All they have to do is capture a small percentage of the TAM, say 5%, and the stock is worth $800-$900 per share. Even without the new e-commerce revenue the company is currently slightly below fair value. So this is a stock where you actually have a MARGIN OF SAFETY and please, show me another company with margins above 80% at this valuation.
The risks are mainly that they do rely on Alphabet, Apple because they are within their ecosystem. So they don’t own the platforms that they operate within. Then again, many tech companies are reliant on the big tech companies. Example: What happens if the CapEx spending from the hyperscalers slows or even stops? Many tech companies relying on that CapEx with high valuations will plummet.
Thoughts?