The LightShed Earnings Scorecard. Third Edition

The Third Edition of the LightShed Earnings Scorecard is out. This is our attempt to hold companies and analysts accountable for the quality of earnings calls. Sadly, there is little improvement. In this edition, we also started tracking the use of the word “inflation”. Enjoy. Coming/going We added three companies to the Q4 Edition of the LightShed Scorecard: AST Space Mobile, Viasat, and US Cellular/TDS. We also removed three companies. Activision and Zynga are in the process of being acquired and Paramount … Continue reading The LightShed Earnings Scorecard. Third Edition

Can Mark Zuckerberg and Meta Win a Multifront War with No Allies?

Meta is All Alone Meta, led by Co-Founder and CEO Mark Zuckerberg, is fighting a multifront war. Worse yet, they appear to have no allies as they try to reinvigorate growth in their core business, while spending aggressively to create a future where they have more control over their own destiny as an operating system rather than as a platform riding on other companies’ operating systems. While Meta’s stock is only trading at 13.5x 2023 consensus earnings, its vulnerability to … Continue reading Can Mark Zuckerberg and Meta Win a Multifront War with No Allies?

A Closer Look At AT&T’s ~Free Cash Flow

Investors have been seeking greater clarity on the key components of AT&T’s pro-forma free cash flow. On Friday, AT&T’s management team made a good faith attempt to increase transparency and did, in fact, fill in many key pieces. We thought it would be additive to provide our own, more detailed, “free cash flow walk” … including one for 2024. Let’s start with EBITDA AT&T’s EBITDA guide for 2022 and 2023 was more conservative than our estimates yet the tone on … Continue reading A Closer Look At AT&T’s ~Free Cash Flow

Are Ad-Supported SVOD Tiers the “Right” Long-Term Decision?

But when you look at the Disney brand, the Disney+ product, we have a very high volume of films on our service, and we don’t believe that the consumer experience would be a particularly good one if we had advertising on Disney+.Disney CFO Christine McCarthy, December 10, 2020 The excitement around the launch of subscription streaming services as linear TV dies and Internet TV rises has turned to investor obsession with subscriber growth and profitability. In turn, it is not … Continue reading Are Ad-Supported SVOD Tiers the “Right” Long-Term Decision?

Radius Growth Opportunity Still Robust. Increasing Price Target to $24

Radius Global owns and aggressively acquires the property under wireless towers. Its resulting portfolio of leases generate tower-like revenue escalators. Their acquisition opportunities have been larger and more valuable than we initially anticipated. In addition, Radius’ rent escalators are likely to rise due to the inflationary environment. We expect 30% growth of In-Place Rents in 2022 and nearly 40% growth in EBITDA. We increased our price target to $24 from $21. From $140 million per year to $400 million Radius … Continue reading Radius Growth Opportunity Still Robust. Increasing Price Target to $24

Increasing Iridium Price Target To $58. Can Buyback 5% of Shares Per Year

We are increasing our Iridium price target to $58 from $54 and believe the company can retire 5% of its share count per year for the foreseeable future, while maintaining net debt leverage at 3x. Iridium grows its recurring service revenue in the high single digits with an unlevered free cash flow margin north of 50% and does not expect to pay taxes until 2025. Iridium has the opportunity to fuel even higher growth via acquisitions of Satelles and Aireon … Continue reading Increasing Iridium Price Target To $58. Can Buyback 5% of Shares Per Year

The Five-Part Multivariable Equation Facing Disney’s Bob Chapek

Disney has more iconic IP than any media company in the world. That said, we do not envy the current situation facing Disney CEO Bob Chapek. During the Bob Iger era at Disney, Iger was able to acquire an array of IP (Pixar, Marvel & Lucasfilm) that repositioned The Walt Disney Company for long-term success. Despite a vast amount of amazing IP that consumers around the world love, Disney now finds itself at a crossroads with huge decisions facing Team … Continue reading The Five-Part Multivariable Equation Facing Disney’s Bob Chapek

Initiating Spotify with BUY and $260 Price Target as Advertising Accelerates Growth

Back in September 2021 (link), we highlighted our growing excitement around Spotify’s advertising business, remembering Spotify Co-Founder Daniel Ek’s LightShed Live comment from May 2020: “When we started Spotify, we thought the ad-supported part would be a lot larger than the subscription part. It’s the funny thing how these platforms play out sometimes. I know that I’m supposed to say that it was this arch genius and I had everything figured out already from the get-go, but that wasn’t the … Continue reading Initiating Spotify with BUY and $260 Price Target as Advertising Accelerates Growth

Upgrading FUBO to NEUTRAL from SELL

Upgrading FUBO to NEUTRAL from SELL

We are upgrading FUBO to Neutral from SELL and removing our $6.50 target price. Yesterday on CNBC’s Squawk Box, former Dallas Fed President Richard Fisher made the statement that “the market has been wearing beer goggles for the longest time.” There was no better example than during the Fed-infused meme stock craze last winter. And, one of the best examples of that craze in TMT was FUBO, which grew to an EV of nearly $10bn, despite dim prospects for ever … Continue reading Upgrading FUBO to NEUTRAL from SELL

Eight Questions for Netflix’s Q4 2021 Earnings Interview Tonight

Here are the eight key questions investors should want answers to from Netflix management on tonight’s Q4 2021 earnings interview (our Q3 2021 questions can be found here). 1. Updated Thoughts on Global TAM. You have talked to the pandemic wreaking havoc on your ability to model your business. That said, you are continuing to ramp content spend aggressively, which would appear to illustrate Netflix’s confidence in their long-term total addressable market. If there are 600-800 million global subscribers available … Continue reading Eight Questions for Netflix’s Q4 2021 Earnings Interview Tonight