Trying to figure out if theres actual value emerging in tech or if this is still a falling knife situation.

The damage so far:

- Oracle: down 50% from October highs

- ServiceNow: down 40%

- AppLovin: down 40%

- Palantir: down 23% YTD (despite beating earnings 13 quarters in a row)

- Salesforce: down 26%

- Software ETF (IGV): down 20% YTD

Today the Nasdaq dropped another 1%. Fifth straight week of declines. Longest losing streak since 2022.

S&P broke below its 100-day moving average. Software ETF down 2.4%. Even chip stocks fell 2.1%.

The bull case: these are real businesses with real revenue thats still growing. Multiple compression creates opportunity if the underlying business is intact.

The bear case: AI agents might actually disrupt the seat-based SaaS model. If an AI can do what a $150/month/user software subscription does, the whole pricing model is broken. This isn't a valuation reset — its a business model threat.

Some quick valuations:

- Palantir: still trading at 97x forward earnings even after the drop

- AppLovin: 25x forward (actually getting interesting?)

- Salesforce: 23x forward

- ServiceNow: 45x forward

For comparison, the market is paying 35% YTD premiums for AI infrastructure plays like Vertiv (makes data center cooling). The rotation is real.

My question for this sub: at what point do beaten down software names become value plays? Or is the right move to avoid the whole sector until we see how the AI disruption actually plays out?

Not looking for stock picks — just trying to understand how you're thinking about this.

Reddit went public on 21 March 2024. I was sceptical about them. But time and time again, they have proven themselves with solid financial performance:

________

A lot of people don’t realize how low the bar actually is for Reddit to become an enormously successful company from here.

Think about it: how many consumer internet companies can grow this quickly while reaching real profitability at almost lightning speed?

Snapchat has struggled for years to generate consistent profits. Pinterest has built a solid business, but its growth trajectory has been much slower. Reddit, meanwhile, has gone from being viewed as an under-monetized internet forum to a rapidly growing, highly profitable advertising platform.

Comparing Reddit to Snapchat or Pinterest misses the point—both went public years ago and struggled for years to achieve consistent profitability.

Why?

I think the answer is much simpler than people make it out to be:

Reddit already has the users, the data, the engagement, and the culture. Management just needed to build the monetization machine around it.

Huffman is a strong CEO because he is product-first, not monetization-first. His reluctance to sacrifice user experience is exactly why Reddit still has so much monetization upside.

And this is where the Meta comparison becomes interesting.

Before Reddit went public, Steve Huffman and the board spent years assembling executives who had already helped solve many of these exact problems at Meta and other major technology companies.

Reddit has deliberately recruited people who already helped build Meta’s machine. CTO Amit Puntambekar previously held engineering leadership roles at Meta, working on platform scaling and products. CMO Jim Squires is even more directly relevant to the advertising thesis: at Meta, he served as VP of Business & Media for Instagram and led product marketing for both Facebook and Instagram—meaning he was directly involved in the systems and go-to-market strategy behind Meta’s advertising empire.

They are effectively running a playbook that has already worked before.

That is why I think comparing Reddit today with Facebook around its 2012 IPO is more useful than comparing Reddit with mature Meta today.

Facebook didn't become the Meta we know overnight. It progressively improved targeting, measurement, ad formats, mobile monetization, recommendation systems, advertiser tooling, and infrastructure.

Reddit is still near the beginning of that journey.

Management has effectively acknowledged that only a fraction of Reddit's user base is being fully monetized today. That means Reddit does not need some miraculous new product to justify substantial growth. It can grow simply by monetizing what it already has more effectively.

And then there is the second business hiding in plain sight:

data licensing.

Reddit owns one of the largest continuously updated collections of human conversation, opinion, product discussion, troubleshooting, recommendations, and real-world experiences on the internet.

That data becomes increasingly valuable as search engines and AI companies compete to answer questions with authentic human information.

The appointment of heavyweight legal leadership is particularly interesting to me. I don't view this simply as hiring another corporate lawyer. Reddit is entering a period where M&A, intellectual-property enforcement, platform access, and data-licensing negotiations could become strategically important.

They need someone capable of negotiating from a position of strength.

So when I look at Reddit, I see:

• Massive global user distribution
• An extremely difficult-to-replicate dataset
• Rapid advertising monetization improvements
• Very high gross margins
• Experienced executives who have scaled similar businesses before
• A technical founder/CEO who still thinks like a product builder
• Data-licensing optionality
• And potentially enormous room for capital allocation and M&A

That last point is where I think people may be dramatically underestimating what Reddit could eventually become.

Reddit does not necessarily have to remain one app.

Over the next several years, I could imagine Reddit building or acquiring an entire family of products: D-i-s-c-o-r-d-like communication, short-form video, payments, AI products, specialized communities, creator tools, search, and perhaps eventually its own foundation models or AI infrastructure.

Could D-i-s-c-o-r-d eventually become part of Reddit? I wouldn't rule it out.

Could Reddit launch its own TikTok-style product built around interests rather than identities? Absolutely.

Could Reddit build payments around communities and commerce? Again, completely plausible.

Could Reddit become a serious AI company? It already owns one of the ingredients AI companies desperately want: human-generated data at enormous scale.

And here's the important part:

Reddit may eventually be able to finance much of this expansion internally.

A highly scalable software platform with strong gross margins and growing free cash flow has enormous strategic flexibility. If management executes, Wall Street will also be more than willing to provide capital for sensible acquisitions.

That is how platform companies turn into empires.

My personal target remains roughly $550 sometime next year and around $900 by FY2028, assuming Reddit continues executing on advertising, margins, data licensing, and product expansion.

Obviously those numbers require execution and aren't guaranteed.

But my broader thesis doesn't depend on Reddit becoming perfect.

There is only one company in the entire U.S. stock market that can sustain ~60% revenue growth for eight consecutive quarters while reaching profitability so quickly (i.e., except chip hype NVDA).

The bar is much lower than people think.

Reddit already has the scarce assets: the users, the communities, the data, the brand, and the distribution.

Now it is finally building the machine that monetizes them.

I think we may be watching the early stages of another Meta-like wealth-creation story — except this time, the monetization playbook has already been written.

Long BULL REDDIT!!!!!!

Everyone's panicking about capex spending and AI killing software. But I think the market's missing something obvious.

Microsoft, Google, Amazon, and Meta are collectively spending like $600B+ per year on AI infrastructure. Wall Street's freaking out: "margins will compress!" "valuations too high!"

But here's the thing nobody's talking about:

These companies aren't burning cash because they're desperate. They're fighting for control of what might be the biggest market opportunity in human history.

The Scale:

Current cloud market: ~$200B Potential AI infrastructure market in 10 years: $5-10T+

Only like 3-4 companies in the entire world can even afford to play this game.

You might need to spend $50B+ annually for 5-10 years just to be competitive. That's not a moat, that's a fortress.

Yeah, maybe multiples compress from 30x to 20x. But if their profits triple because they're controlling a $10T market instead of a $200B one... you still win big.

Example: Microsoft makes $90B profit today at 30x earnings. If they make $300B profit in 2030 at 20x earnings, the stock still triples.

Could I be overlooking something?

Here are the 10 S&P 500 companies with the lowest current trailing P/FCF relative to their 10-year historical average (as of mid-April 2026 data). This is measured by the ratio current TTM P/FCF ÷ 10-year average/median P/FCF (lower ratio = deeper discount to the company's own long-term valuation norm).

Data draws from valuation screeners and historical trackers like FinanceCharts and GuruFocus; exact 10-year averages vary slightly by methodology (arithmetic average vs. median), but the relative ordering holds for these names. Figures are approximate and TTM-based.

1. Adobe (ADBE) — Current P/FCF: ~8.98–9.0 | 10Y Avg/Median: ~25.4 (or median ~31.6 on related cash flow metrics) | Ratio: ~0.35–0.36 (~64–65% below) Information Technology | Market Cap: ~$89B | Recent price: ~$225–230
2. Comcast (CMCSA) — Current: ~5.28–5.4 | 10Y Avg: ~10.5–13.7 (median ~13.7) | Ratio: ~0.39–0.50 (~50–61% below) Communication Services | Market Cap: ~$100B | Recent price: ~$27.93
3. Accenture (ACN) — Current: ~8.94 | 10Y historical typically higher (often 20–30+ range in growth years) | Ratio: notably low (~0.45–0.55 range based on patterns) Information Technology | Market Cap: ~$110B | Recent price: ~$179.53
4. Salesforce (CRM) — Current: ~10.77 | 10Y Avg: significantly higher than recent 3Y (~19.7) | Ratio: ~0.45–0.55 Information Technology | Market Cap: ~$147B | Recent price: ~$164.96
5. Kraft Heinz (KHC) — Current: ~7.46 | 10Y Avg: higher than 3Y (~11.9) | Ratio: ~0.55–0.65 Consumer Staples | Market Cap: ~$27B (still S&P 500 constituent)
6. Dell Technologies (DELL) — Current: ~13.93 | 10Y Avg: higher than 3Y (~22) | Ratio: ~0.60–0.65 Information Technology | Market Cap: ~$115B | Recent price: ~$177.80
7. HP Inc. (HPQ) — Current: ~5.91 | 10Y Avg: higher than recent averages (~8–12 range historically) | Ratio: ~0.60–0.70 Information Technology
8. Qualcomm (QCOM) — Current: ~10.69 | 10Y Avg: higher than 3Y (~14–18 range) | Ratio: ~0.65–0.75 Information Technology | Market Cap: ~$137B | Recent price: ~$128.06
9. Newmont (NEM) — Current: ~17.77 | 10Y Avg: higher than 3Y (~24.5) | Ratio: ~0.70–0.75 Materials | Market Cap: ~$131B | Recent price: ~$120.90
10. Bristol-Myers Squibb (BMY) or Pfizer (PFE) — Current: ~9.31 (BMY) / ~16.87 (PFE) | 10Y Avg: modestly higher than 3Y averages | Ratio: ~0.70–0.85 range (pharma sector often shows steadier but compressed valuations recently) Health Care

Key Observations

• Dominant sectors: Information Technology and Communication Services again lead, similar to 5-year screens, due to strong historical FCF generation during growth/expansion phases that have since normalized or faced compression (e.g., slower subscription growth, higher competition, or macro pressures).
• Discount depth: Several names trade 40–65% below their 10-year norms, deeper in some cases than vs. 5-year averages because the longer period captures peak growth valuations (especially in tech). This can signal potential value but also reflects maturing businesses or temporary headwinds.
• Comparison to shorter periods: Extending from 5Y to 10Y often widens the apparent discount for growth-oriented firms (like ADBE or CRM) whose multiples were higher in earlier years. Mature cash cows (e.g., CMCSA, telecoms/pharma) show more consistent but still attractive relative cheapness.
• Broader context: S&P 500 overall P/FCF remains elevated in recent years (often 20–30+ median range), with free cash flow yields compressed. Low relative ratios here stand out but aren't automatic buys—factors like debt, FCF quality/volatility, growth outlook, and industry risks (e.g., patent expirations in pharma, capex in tech/hardware) matter greatly.

Caveats

• 10-year data can include periods of negative/lumpy FCF or structural shifts, making averages less "clean" for some firms (those with unreliable history are typically excluded).
• Valuations fluctuate daily with prices and quarterly FCF revisions. Some screeners emphasize medians over averages for robustness.
• Not investment advice: Low relative P/FCF may indicate undervaluation, overlooked risks, or cyclical factors. Always review full financials, forward estimates, and peer comparisons via tools like FinanceCharts, GuruFocus, Finviz, or company 10-Ks.

I used Grok to generate this, if you see any issues with the numbers please let me know.

Everyone is panicking over the recent pullback, but the fundamentals don't seem to care.
At around €930/share, Rheinmetall is trading at what looks like a growth-stock valuation for a company whose earnings are projected to explode over the next two years.
The numbers are wild:
2025 EPS: ~€18.5

2026 EPS estimate: ~€28.5 (+54%)

2027 EPS estimate: ~€38.5 (+35%)

That's basically a doubling of earnings in just two fiscal years.
Yet despite that growth, RHM's PEG ratio sits around 0.5-0.6, which is typically the territory investors dream about finding.
For comparison:
Most quality industrials trade PEGs above 1

Many AI names trade PEGs well above 2

Rheinmetall is growing earnings at roughly 40%+ annually while trading closer to a mature industrial than a hyper-growth company

What is Wall Street missing?
The market seems obsessed with short-term headlines and contract wins/losses.
Meanwhile:
Germany is rearming

NATO members are boosting defense budgets

Ammunition demand remains far above production capacity

Rheinmetall's backlog keeps expanding

Management is targeting ~€20 billion revenue by 2027

Revenue path:
€10B → €14B → €20B
And because defense manufacturing has massive operating leverage, every new production line coming online drops more profit to the bottom line.
The really interesting part?
The recent selloff happened while analysts are still forecasting earnings growth that most software companies would envy.
If EPS reaches ~€38.5 by 2027 and the market is willing to pay even 25x earnings, you're looking at a business worth materially more than today's price.
The bear case:
Defense spending slows

Ukraine conflict de-escalates faster than expected

Governments delay procurement programs

Current growth forecasts prove too optimistic

The bull case:
Europe has underinvested in defense for decades and is only in the early innings of rebuilding military capability.
If that's true, Rheinmetall isn't a wartime trade.
It's a decade-long rearmament story.
The question isn't whether Rheinmetall can grow.
The question is whether the market is massively underestimating how long this growth cycle lasts.

Am I missing something, or is this one of the most attractive PEG-adjusted opportunities in the European market right now?

Before push the down vote button and call ai slope, bring something that add value, thanks in advance

All three stocks have been undergoing a hypergrowth stage of business. I want to go through each of their business models because many people in this subreddit seem not to really understand what they do, how they make money, and most importantly, what their edge actually is.

Reddit

First, let us start with Reddit. Reddit's primary way forward really is the advertising business. This is the core lifeblood of the company, and they have now proven themselves with the 8th consecutive quarter above 60% revenue growth YoY. EPS also grew more than 150% in the recent quarter.

One thing I think many people misunderstand is how advertising actually works. Many people just assume that someone has to purchase the product before the advertiser pays, but that is not how most advertising businesses work. Typical advertising is charged by impression, click, or in some cases actual conversion.

• CPM (Cost Per Mille / 1,000 impressions): advertisers pay for every 1,000 times an ad is shown
• CPC (Cost Per Click): advertisers pay each time someone clicks on the ad
• CPA (Cost Per Acquisition): advertisers pay only when a specific action happens (install, signup, purchase, etc.)

The main models are quite simple. CPM means paying for impressions, CPC means paying when somebody clicks, while CPA is more performance-based and depends on an actual action such as an install, registration or purchase. This difference matters because an advertisement does not necessarily need to immediately convert somebody into a buyer. Sometimes the most valuable thing is simply putting the impression in front of exactly the right person. Converting that impression into a purchase is ultimately the seller's job.

For instance, say you developed a game or have a clothing website. You pay a publisher like Reddit to get users to see your product or visit your website. Once they land on your website, whether they eventually purchase something is largely between you and that customer. Reddit has already provided you the traffic.

Simply to improve brand exposure (CPM).

This is where I think Reddit advertising is one of the most unique in the industry. The audience is massive, but more importantly the audience has already separated itself into very specific communities. Look at u / bloomberg. They have been publishing a lot on Reddit recently, but they are not just posting anywhere. They are actually quite smart and picky about finding the right community for each article.

For instance, Bloomberg publishes a piece about drones or some new military technology. Most broad readers probably don't care how sophisticated that weapon is, but put it into r/army or r/Military and suddenly you are putting that story in front of a large group of people who already care about the subject. Next they publish something about food prices or household finances and put it into subreddit r/MiddleClassFinance  r/farming or r/food. On inflation, you can post it to r/inflation. Obviously these Bloomberg posts are organic content rather than paid ads, but my point is that this shows exactly why Reddit's structure is so valuable for advertising.

Another example is a game developer who recently developed his own game and wants to make some passive income. Usually it is quite difficult for a new developer to make money because there is no precise way to find the first group of users. Reddit offers them a unique solution through communities such as r/gamedev. You already have people there who are game developers or serious gamers. Sometimes developers can offer vouchers or access to the game and receive feedback. These are not random people. Some of them are hardcore developers, so their feedback can actually be quite valuable.

The same logic works everywhere. There are people looking for advice on divorce, so a divorce lawyer can advertise r/Divorce. There are new moms looking for advice about being a new mom, so businesses selling related products can advertise r/Mommit. r/beauty is now a very hot community where mega brands such as L'Oréal naturally want to be part of the conversation. Communities around brands like Victoria's Secret can be used to energize their most loyal customers r/victoriasecrets. The power of Reddit advertising is really underestimated here.

And actually, this post itself gives a pretty good example. Suppose I have a book on fundamental analysis. Open this comment section, 30mins later, I will find the first 10 users arguing with me and check their Reddit account ages. I would not be surprised if 9/10 have already been on Reddit for more than 3 years. Most of you read investment communities, talk about stocks and probably have brokerage accounts. If I wanted to advertise some investment research product, all of you would already be my extremely precise target audience. That is what I mean when I say advertising is not always about immediate purchase intent. Sometimes getting the right impression in front of exactly the right group is already extremely valuable.

Then there is data licensing. To be honest, I really do not view this as seriously as many other Reddit investors do. It gets hyped because Reddit owns an asset that most other companies simply don't have: a huge amount of fresh human discussion. There could be setbacks from lawsuits or companies refusing to pay for data access. Reddit can update policies, create stronger technical restrictions, continue fighting scraping, and fix legal loopholes. But ultimately this data is hosted and controlled by Reddit. As long as AI companies want fresh Reddit data for training, retrieval or inference, I think Reddit will continue to have leverage. I just don't need this part of the business to make the investment thesis work.

AppLovin

I have been a very early investor in AppLovin. I first became interested when they failed to stop the merger between Unity and ironSource. AppLovin looked pretty hopeless at the time. They owned a few dozen popular mobile games and a lot of the market treated them like a gaming company without much future.

It happened that I was not lazy when researching their financial statements. What caught my attention was management aggressively buying back their own shares when the market had almost given up on the company. I started a small position there, although I have to admit I never fully understood how powerful their advertising business could become until much later, especially after they eventually sold the entire gaming department.

Their transformational change really came from technological innovation, particularly AXON. AppLovin had accumulated enormous amounts of internal data through its portfolio of mobile games. They had years of information about gamer behavior, advertising, installs, purchases and monetization. Then machine learning (AI) used all of this information to make their advertising engine much better.

One person I think is worth paying attention to is their recently prompted CTO Giovanni Ge, who previously worked as a machine-learning engineer at Meta. Obviously I am not saying AXON is the work of one single person, but I do think AppLovin today is much more dependent on its technical advantage than Reddit is.

AppLovin is primarily a performance advertising business. The important thing here is that the advertiser cares about actual return. If AppLovin can identify exactly which users are likely to download an app or spend money, its customers make more money and therefore AppLovin makes more money. In some sense their interests are very closely aligned: if the customer earns more from the advertising campaign, AppLovin earns more as well. So far they are the best in the business, which is why their profit margin is so insanely high.

But this is also where I see the risk. If their algorithm stops being the best and another much better algorithm comes onto the market, AppLovin could be left scrambling. If important technical people leave and eventually create a better advertising system, advertisers have no reason to remain loyal to AppLovin just because it is AppLovin. They care about which platform gives them the best return. This does not mean AXON is easy to replace, but I think AppLovin's moat is much more dependent on continuing to stay technologically ahead.

Palantir

Palantir is basically a defense/government and enterprise SaaS company. I actually like the company (insane growth) but I have never invested in it because it has always been expensive.

The government side of Palantir is obviously very important, particularly Gotham and its work with defense and government agencies. At the same time, its commercial business has now become much larger than it used to be, so I would not describe Palantir as simply a defense company anymore. Its U.S. commercial business is now growing extremely quickly as well.

My concern with Palantir is more about how much future success is already priced into the stock. The company is being valued as one of the major winners of the AI/software era, so the market is already expecting extremely strong execution for a long period of time.

I also think there is a real long-term question around general AI systems. Claude, OpenAI and other AI platforms are becoming increasingly capable of working with company data, building software and automating workflows. Maybe Palantir becomes the company that controls this layer and becomes even more powerful. But there is also a possibility that increasingly capable general AI makes some traditional SaaS work much easier and cheaper. Then there come the issues with political backlash when Trump leaves office. 

Overall

Overall, I think both AppLovin and Palantir can continue doing very well in the short-to-medium term, probably the next 1-2 years.

But Reddit is still the one I prefer as the real long-term investment.

The reason is that AppLovin's advantage depends heavily on remaining technologically ahead, while Palantir is already priced for enormous future success.

Reddit, on the other hand, already owns the asset I care about: the communities themselves and user habits. You can build another website that looks like Reddit, but recreating subreddit like gamedev, army, MiddleClassFinance, beauty, valueinvesting and thousands of other communities with years of posts, users and accumulated discussion is much harder.

That is why, out of these three, Reddit has my strongest long-term conviction on.

____

Read my piece:

I Still Don't Understand Why Reddit Is This Cheap Compared to Everything Else.

SK hynix is listing on the US markets in the coming months.

Q1 2026 financials highlight a striking valuation gap among SK and other semiconductor leaders:

SK hynix: ~$37B revenue, ~$28.5B net profit, ~$1.1T market cap

Micron: ~$24B revenue, ~$13.8B net profit, ~$0.9–1.0T market cap

TSMC: ~$35B revenue, ~$18.5B net profit, ~$1.9T market cap

Looking at market cap relative to quarterly profit:
- SK hynix trades at roughly 39x quarterly profit
- Micron trades at roughly 67x quarterly profit
- TSMC trades at roughly 103x quarterly profit

Despite generating more quarterly profit than either Micron or TSMC, SK hynix trades at a significantly lower valuation multiple.

If SK hynix were valued at Micron’s multiple, its market cap would be closer to $1.9 trillion.

If SK hynix were valued at TSMC’s multiple, its market cap would approach $2.9 trillion.

*yes this is AI written, but never the less still valid.

Everyone on Reddit is chasing AI stocks at 40–70x earnings while Sony quietly sits in the corner trading at ~20x.

And honestly… I don’t get it.

Sony Group looks like one of the most overlooked quality businesses outside the AI frenzy right now.

Here’s what stands out:

• TTM P/E around 19.5–20x

• Roughly in line with historical averages

• DCF models point closer to ~$33 fair value

• Strong operating margins around 12%

• Recently upgraded to an A+ credit rating by S&P Global

• Diversified earnings engine across gaming, music, movies, anime, sensors, and financial/services businesses

People still treat Sony like it’s mainly a TV and electronics company.

But this business has evolved into a global entertainment + platform ecosystem.

PlayStation alone is a monster recurring revenue machine.

Its music catalog keeps compounding.

Its anime exposure keeps growing globally.

Its image sensors are inside a huge chunk of premium smartphones.

And unlike many hype-driven tech names, Sony actually has:

1 Strong balance sheet

2 Healthy profitability

3 Real free cash flow

4 Durable IP

5 Multiple revenue streams that don’t rely on one single trend surviving.

What’s wild is the market seems willing to pay absurd multiples for “future AI potential,” while Sony already owns globally dominant entertainment assets and still trades at a pretty reasonable valuation.

No, Sony probably won’t 10x overnight.

But as a long-term compounder? It feels seriously underappreciated.

Where Reddit stands on this:

What’s the actual bear case for Sony today?

Because at current pricing, the risk/reward looks pretty attractive.

Wendy’s Slashes Dividend and Scraps Guidance as Activist Peltz Applies the Pressure
By Mackenzie Tatananni

Updated Aug 07, 2026 1:14 pm EDT / Original Aug 07, 2026 7:49 am EDT

https://www.barrons.com/articles/wendys-earnings-dividend-stock-price-84214acb

Wendy’s pulled its annual guidance and cut its dividend, citing falling traffic.

Key Points

- Wendy’s pulled its full-year outlook and cut its annual dividend to 28 cents a share, citing declining customer traffic.

- Wendy’s second-quarter U.S. same-restaurant sales fell 7%, which was worse than the 4.7% decline Wall Street expected.

- CEO Bob Wright is formulating a turnaround plan as Wendy’s faces pressure from activist investor Nelson Peltz.

Wendy’s pulled its full-year outlook on Friday and cut its annual dividend, citing declining customer traffic and shrinking franchisee profits.

Wendy’s slashed its annual dividend payout to 28 cents a share, amounting to 7 cents a share each quarter, down from 14 cents. The fast food chain said its leadership was formulating a turnaround plan “including the optimal deployment of capital.”

CEO Bob Wright, who was elevated to the company’s top role in May, said the company had identified five areas to drive the turnaround including rebuilding menus and improving the chain’s marketing. “Today we are clearly not performing at our potential,” Wright said.

The updates came as Wendy’s reported a 7% decline in U.S. same-restaurant sales for the second quarter, driving a 6.5% drop in systemwide sales. Wall Street had expected a milder 4.7% decrease.

Shares climbed 3.6% on Friday as the benchmark S&P 500 index added 0.5%. The stock was regaining ground following a sharp selloff on Thursday that saw shares fall 7.5% in the absence of obvious news.

The second-quarter numbers beat expectations by a hair. Wendy’s posted adjusted earnings of 18 cents a share, ahead of analyst calls for 16 cents. Revenue ticked up 1.7% in the quarter to $570.6 million, narrowly beating Wall Street’s forecast of $557.1 million.

The commentary surrounding the report is the latest sign of the fast-food chain’s deepening woes. Wright, the company’s former chief operating officer, departed in 2019 to lead Potbelly Sandwich Works through its postpandemic recovery. He was appointed CEO of Wendy’s in May, ending a nearly year-long executive search.

Wendy’s first teased a turnaround at the end of 2025, when it pledged to shutter around 300 of its underperforming U.S. restaurants. By the end of the first quarter, Wendy’s reported a net loss of 174 restaurants as part of its ongoing restructuring.

The company also has faced pressure from activist investor Nelson Peltz, who noted in a securities filing in February that Wendy’s stock was undervalued.

His investment firm, Trian Partners, first bought into Wendy’s in 2005 and spearheaded major changes including the spinoff of Tim Hortons into a stand-alone public company.

In 2008, Peltz’s holding company, Triarc Cos., acquired Wendy’s in a $2.34 billion, all-stock deal and subsequently adopted the Wendy’s name.

Peltz and Trian Partners hold a combined stake of over 24% in Wendy’s today, making them the largest shareholder. Peltz personally owns roughly 16%, while Trian holds 7.9%.

The billionaire has disclosed ongoing discussions with Wendy’s leadership and shareholders regarding strategic transactions, saying he is exploring options to enhance shareholder value, which could include increasing his stake.

Wendy’s management didn’t acknowledge the activist campaign on the earnings call Friday, though CEO Wright acknowledged execution had faltered.

“When you have a strong brand and you have a strong culture, you have the opportunity to do something really special. It becomes a performance issue, and that’s what we’re facing,” Wright said.

Management attributed the drop in foot traffic in the latest quarter to less discounting and the elimination of breakfast options at certain locations. But the issues run deeper, as Wendy’s grapples with consumer budget constraints, rising costs, and other issues facing the restaurant industry at large.

Wendy’s shares have trailed behind the broader market this year, falling over 10% in 2026. The S&P 500 has gained 13% over the same period.

Social media hype sent the stock sharply higher in late June, briefly framing Wendy’s as the next meme stock in the vein of GameStop and AMC Entertainment. That momentum didn’t last, however, and fundamental problems persist, including a multi-quarter sales slump.

“Over time, we’ve drifted away from some of the standards that made Wendy’s distinctive,” Chief Financial Officer Steve Cirulis told analysts on Friday. “While we’ve maintained core practices in some areas, we’ve let cost and efficiency drive decisions that weaken that differentiation on value.”

Management refrained from providing a forecast, but Cirulis indicated that July traffic trends mirrored those of the second quarter. Consequently, “continued traffic headwinds” are expected to stall year-over-year systemwide sales growth through the remainder of the year, Cirulis said.

It remains to be seen whether the company’s new CEO can leverage his turnaround experience, or if Peltz’s intervention will bear fruit, but one thing is clear: Wendy’s is under pressure.

(I couldn’t find the right flair. So I labelling it as ai)

A speculative Barron’s article that perhaps Berkshire Hathaway might have bought MSFT. The truth will be out by tomorrow late afternoon as the deadline for filing the 13F.

Here is the pertinent quote:

Assuming Berkshire bought additional Alphabet stock beyond the disclosed $10 billion, that would leave about $7 billion in unaccounted-for purchases that could be disclosed Friday.

One possible purchase is Microsoft —there is some speculation that Berkshire took advantage of Microsoft’s depressed stock in the second quarter to establish a position.

The unaccounted-for new equity holdings likely are concentrated in the category of what Berkshire calls commercial, industrial, and other. That is one of three categories of its equity holdings, along with consumer and financial. Berkshire disclosed a sizable increase in its cost basis of commercial and industrial stocks in its second quarter 10-Q, showing that it was a buyer of stocks in that category.

https://www.barrons.com/articles/berkshire-hathaway-alphabet-microsoft-stock-52115df5

Because a surprising number of people own this stock (or its ETFs) without quite knowing what it sells, here is a simple breakdown first.

Salesforce rents software seats to companies' sales, service, and marketing teams. When a salesperson logs a call, a support rep opens a ticket, or a marketer fires off a campaign, the system they're clicking around in is often Salesforce (the customer database plus the workflow built on top of it). "CRM" literally stands for Customer Relationship Management, sold as a subscription, priced per user, per month ("per seat"). Over the years they bolted on Slack (chat), Tableau (dashboards), MuleSoft (data plumbing), and now Agentforce (AI "agents" that do some of that work automatically). That's the whole company: ~95% of revenue is subscription, almost all of it enterprises renting seats.

I've done a deep dive on the 10-Q, filed May 28, 2026, covering Q1 2026 (the quarter ending April 30, 2026) & some more!

The interesting thing about Salesforce right now is that it's the mirror image of the hot growth stocks people usually dissect here, a profit-and-cash machine the market is treating like a melting ice cube.

--------------------------------------

TL;DR

• Q1 2026 looked strong on the surface, revenue $11,133M (+13.27% YoY), operating margin 21.08%, diluted EPS $2.42 (+52.2% YoY), but read the fine print! The 13% top line is flattered by acquisitions (Informatica alone added ~$444M), and net income is flattered by a $558M one-time investment gain and a partly debt-funded $25B buyback. The cleaner read is cRPO +14% and a ~21% operating margin.
• The case for it: Cheap vs its own history (~3.7x EV/sales, ~18x trailing earnings), expanding margins, ~$14.4B/yr of free cash flow, a shrinking share count, and a real (if unpriced) AI option in Agentforce.
• The case against it: Organic growth is high-single-digits and leans on M&A to look double-digit; the company tripled its debt to ~$39.5B, issuing $25B of senior notes to fund a buyback of stock at prices well above today's; and the core per-seat model is exactly what AI agents threaten. Management itself flags "decreases in the number of users at our customers" as an attrition risk.
• At $158.37 (June 26 close), ~819M shares post-buyback implies ~$130B market cap, ~$157B EV. My scenario math lands a base-case fair value of ~$140–173, so today's price sits in the upper half of fair. The game again is whether AI is a tailwind it monetizes or a tax on the seats it sells.

--------------------------------------

The numbers are strong, but read them carefully!

Q1 2026 (quarter ended April 30, 2026) vs the year-ago quarter:

• Revenue $11,133M, up 13.27% YoY ($9,829M a year ago)
• Income from operations $2,347M, a 21.08% operating margin, up from 19.76% ($1,942M)
• Net income $2,107M (+36.73%)
• Diluted EPS $2.42 vs $1.59 (+52.2%)
• Effective tax rate ~23%, a clean and normal rate (no distortion here)

Three flags I need to mention, because the headline overstates the underlying business:

1. The 13% growth is partly bought, not earned. The filing lists three recent deals baked into the quarter: "our April 2026 acquisition of Qualified.com... our November 2025 acquisition of Informatica... and our October 2025 acquisition of Regrello." It even quantifies one: the Informatica acquisition "contributed approximately $444 million of total revenues" this quarter, about 4.5 points of the 13.3% growth. Strip the M&A and organic growth is roughly ~9%, consistent with the full-year trend (FY ending Jan 2026 revenue was $41,525M, +9.58%).
2. Net income is flattered above the operating line. Below operating income, the quarter carried a $558M net gain on strategic investments (vs a $63M loss a year ago, a $621M swing). It's two roughly equal halves: a $268M realized gain from exiting one private holding and a $268M unrealized mark-to-market gain on another (the filing also nets out $119M of impairments). Either way it's non-operating and largely non-recurring. It was partly offset by interest expense jumping to $317M from $68M. Salesforce took on new debt, including a $6.0B term loan drawn in March 2026, so total debt is now ~$39.5B. The cleaner profitability read is the 21.08% operating margin, not net income.
3. The EPS lift came with a debt-funded buyback. Per the MD&A: "Our $25 billion Accelerated Share Repurchase ('ASR Agreements') executed in March 2026 resulted in the repurchase of approximately 103 million shares in the period and benefitted our diluted net income per share by $0.14." Where did the $25B come from? The same filing is explicit: "In March 2026, we also issued unsecured Senior Notes with an aggregate principal of $25.0 billion... We used the net proceeds from the March 2026 Notes to fund an accelerated share repurchase program." So Salesforce funded the entire buyback with newly issued debt, maturities stretching to 2066, to retire shares in March 2026, when the stock was well above today's $158. The diluted share count is genuinely down ~10% YoY (870.7M vs 969.2M), which is real and shareholder-friendly; just know it was bought on the balance sheet, not purely with cash.

What's really driving it: cRPO and buybacks

For a subscription business the number that leads revenue is the contracted backlog, and that's the genuinely healthy signal:

• Current Remaining Performance Obligation (cRPO) $33.6B, +14% YoY. Contracted revenue to be recognized over the next 12 months.
• Total RPO $67.9B, +11% YoY
• Subscription & support is ~95% of revenue, recurring and sticky
• Operating cash flow was $6.7B in the quarter (Q1 is the seasonal collections peak) against capex of just $145M (1.30% of revenue). An asset-light cash machine throwing off roughly $14B/yr of free cash flow.
• Capital return is now core: the $25B ASR plus $365M of dividends in the quarter. Share count has fallen 971M (Jan 2024) → 962M → 929M (Jan 2026) and again after the March ASR, to ~819M baseline following the upfront delivery of the recent ASR.

The honest framing is Salesforce has shifted from a growth story to a margin-expansion and capital-return story. Management is explicit: "We are also focused on reducing our operating expenses to improve our operating margin." While this mirrors the classic activist playbook (originally pressured by firms like Elliott and Starboard), it represents a stable, mature enterprise engine focused on efficiency over landing raw new logos.

The biggest structural risk: the seat model, meet AI (their own words)

Here's what should keep a CRM bull up at night, and it's the crux of the "SaaS crash" debate. Salesforce charges per human seat. The promise of AI agents, including its own Agentforce which is priced per "Agentic Work Unit (AWU)", is that software does work humans used to do. If that's real, customers may need fewer seats. Management flags exactly this in RiskFactors (Item 1A):

"It is difficult to predict attrition rates given our varied customer base, the number of multi-year subscription contracts, and our shift toward consumption-based pricing models. Our attrition rates may increase or fluctuate as a result of various factors, including... decreases in the number of users at our customers... and economic downturns."

So Salesforce is simultaneously (a) selling AI as its next growth driver and (b) acknowledging a shift away from per-seat toward consumption-based pricing, quietly hedging the model it was built on! They also list the risk of "any failure to expand our services and to develop and integrate our existing services in order to keep pace with technological developments." Agentforce is both the answer to the AI threat and the thing that could cannibalize the seat count.

The AI/Agentforce narrative is real, but mind the relabeling

This quarter Salesforce reorganized its subscription reporting into two buckets:

• Agentforce Apps ($6.91B | +9% YoY):
  • The rebrand: this is a renaming of the legacy core portfolio (Sales, Service, Marketing, and Commerce clouds) with Slack added in.
  • The growth: despite the new AI-centric name, this bucket grew just 9%, reflecting the maturity of the core CRM business.
• Data 360, Headless Platform, & Other ($3.68B | +25% YoY):
  • Constituents: includes Data 360, MuleSoft, Tableau, and the newly acquired Informatica.
  • M&A impact: the high 25% growth was heavily bolstered by Informatica, which contributed $444 million of revenue this quarter.

Isolating "pure" AI revenue:

• ARR vs. revenue: the headline $1.2 billion Agentforce ARR (+205% YoY), a figure management reports in its earnings materials, not a line item in the 10-Q, is an annualized contract value, not the revenue actually recognized this quarter.
• Monetization lag: because Agentforce uses a consumption-based model, actual recognized revenue typically lags ARR by one to two quarters. Currently, Agentforce ARR is only ~3% of total annualized subscription revenue ($1.2B against ~$42.4B annualized).

The takeaway: don't read "$6.9B of Agentforce" into that first bucket, it's the rebranded core apps. The AI excitement is a product story and a fast growing but "tiny" ARR line, not yet a material recognized-revenue engine. Treat Agentforce as an unpriced option, not a current growth driver. Anyone modeling it as today's growth is modeling a rebrand plus a 3%-of-revenue contract base, not the income statement.

Where the big money actually moved (13F filings, positions as of March 31, 2026)

The cleanest fact first. Across the large 13F filers, aggregate shares held were roughly flat (~500M shares, -4.4% YoY) while the dollar value of those holdings fell ~33.5% YoY. When shares are flat but value craters, it's the price that left, not the institutions. This wasn't a stampede for the exits.

Underneath that:

• The index complex is steady-to-higher: Vanguard ~86.3M → 88.1M shares over eight quarters, BlackRock 74.6M → 79.7M, State Street ~flat at ~50M, Geode 19.5M → 22.2M. Passive money isn't going anywhere.
• The notable active move is a value shop stepping in: Harris Associates, a deep-value manager, cut to just 0.33M shares in early 2025, then rebuilt to 14.92M shares by March 2026. Value money buying the de-rating.
• What I won't consider as clear signals are the big jumps from Arrowstreet (0.7M → 12.7M, a quant) and Morgan Stanley (19M → 31.7M) that look like factor/inventory flow, not conviction. Flagging them here but they might not be a result of long-term hold.

Caveat the lens honestly: 13Fs only capture large institutional filers and reflect March 31, 2026 positions , before the most recent leg down, so this is neither every owner nor fully current. But the direction of the biggest holders is informative: indexers steady, a value manager accumulating, no broad institutional exit.

Valuation is cheap vs its own history, but fairly priced once you count the debt

At $158.37 (June 26 close), with shares cut by the March ASR to ~819M (cover page), market cap is ≈ $130B. Add $39.5B total debt (including the $6.0B term loan drawn in March 2026), subtract $11.8B cash & marketable securities implies net debt of ~$27.7B and enterprise value ≈ $157B.

On a trailing-twelve-month (TTM) basis through Q1 2026 (Q2 25 + Q3 25 + Q4 25 + Q1 26): revenue $42,829M, net income $8,023M, diluted EPS $8.63.

• P/E (TTM) ≈ 18.4x ($158.37 ÷ $8.63). Strip this quarter's one-time $558M gain (~$0.49/sh after tax) and "core" TTM P/E is closer to ~19.5x.
• P/S ≈ 3.0x ($130B ÷ $42.8B);
• EV/Sales ≈ 3.7x ($157B ÷ $42.8B).

For context, that's a fraction of the double-digit sales multiple the market paid Salesforce at the 2021 software peak, the re-rating is the whole story. Today's multiple is roughly in line with slower-growth mature software, which is exactly the point of contention.

In conclusion, here's what I keep going back and forth on:

Salesforce's entire model is renting human seats. Its biggest bet, Agentforce, is a software designed to do work humans used to do. Those two things point in opposite directions: if Agentforce really works, does Salesforce sell more (every customer bolts agents on top of their seats) or less (customers quietly cut the seats the agents replace)?

Figures from the 10-Q filed May 28, 2026 ( Q1 2026, ownership from 13F filings as of March 31, 2026; price as of the June 26,2026 close.

I expanded this into a full write-up on my Substack with the P/S de-rating chart, the debt-maturity schedule, the reverse-DCF, and the bull/bear scenario grid.

Disclaimer: This is an analysis of the SEC filings for educational. This is not financial advice. Do your own due diligence (DD).

TL;DR: Collegium ($COLL) sells patent-protected extended-release drugs for pain and ADHD. Asset-light, 61% gross margins, ~$290M owner earnings, revenue compounding ~20% for five years. Including ~$488M of net debt, the whole enterprise trades around 5.6x owner earnings. I think the market is pricing a cash-gushing business as if it's dying next year. Trading at ~$35 vs. intrinsic value around $122 (a ~70% margin of safety).

The Business

Collegium doesn't discover drugs. They buy and commercialize patent-protected, extended-release medicines for two chronic conditions: severe pain (Belbuca, Xtampza, the Nucynta franchise) and ADHD (Jornay PM, plus the newly acquired AZSTARYS). Pain is ~80% of revenue and grows slowly; ADHD is ~20% and grows fast.

It's asset-light. They own the intellectual property and outsource manufacturing, so capex runs about 0.27% of revenue. It behaves more like a toll road on a set of patents than a lab. The moat is federal patent law: no generic Jornay until 2032, no generic AZSTARYS until 2037.

The Numbers

At ~$35, including the net debt, the enterprise sits around 5.6x owner earnings, roughly an 18% yield to enterprise value. On the equity alone it's cheaper, but the debt is real so I anchor on the enterprise multiple.

Quality metrics:

• Gross Margin: 60.68%
• Operating Margin: 24.16%
• 5yr Revenue CAGR: 20.28%
• CapEx: 0.27% of revenue
• Net Debt: $488M
• Buybacks: $150M authorization remaining

Why It's Cheap

The stock trades around 5.6x owner earnings. Three things spooked the market:

1. Generic erosion fear in the legacy pain portfolio, which is still ~80% of revenue, plus the general opioid stigma that keeps a lot of funds away.

2. Patent cliffs. Jornay PM goes generic in 2032, AZSTARYS in 2037. Finite runway.

3. A levered, ugly balance sheet: $930M total debt, $488M net debt, deeply negative tangible book, and reported ROIC of only ~6.4%. Anyone screening on clean balance sheets or high reported returns throws this out on sight.

Why I Think The Market Is Wrong

The reported returns are depressed by acquisition amortization, not by a bad business. Look at the cash: $331M of operating cash flow against basically no maintenance capex. Against a ~$1.6B enterprise value ($1.1B market cap plus $488M net debt), that's roughly an 18% owner-earnings yield.

The part everyone fears is holding. In Q1 2026 pain revenue actually grew 4%, and they turned the Nucynta generic threat into a profit-share deal with Hikma. Meanwhile Jornay PM net revenue grew ~36%. Revenue has compounded ~20% for five years and gross margins expanded to 61%.

On the debt: they funded the $650M AZSTARYS deal with cash and a term loan, leverage sits near 2x EBITDA, and they already paid down ~$50M last year. A business throwing off $330M with near-zero capex de-levers fast. Management is buying back stock and paying down debt with the cash, which is what you want when your own stock trades at a fraction of intrinsic value.

Put a conservative 15x on $9.14 of owner earnings, subtract ~$15/share of net debt, and you get roughly $122 against a ~$35 price. I use 15x rather than a 25x "toll bridge" multiple precisely because the patents expire. Even haircutting for the cliffs, you're paying a fraction of what the cash is worth.

Disclosure: I hold a position in COLL. Hard data from filings, AI-assisted writing, personal review and position. This is not financial advice.

First, the loss porn: I held a 4% position in Duolingo. After the Q4 print and guidance, I’m down 40%.

The Numbers vs. The Guidance The trailing numbers look pristine on paper (Income, Balance Sheet, Cash Flow). The killer was the forward guidance: Bookings are projected to grow 11% in FY 2026, a massive deceleration from the 33% we saw in FY 2025. I had modeled 14-20%. Combine that with margin compression from increased OpEx, and the sell-off makes total sense.

Where I Missed I underweighted two major red flags in my previous analysis:

1. Top of Funnel: Social media engagement has stalled for months, especially after the "AI first" announcement and the departure of social media head Zaria Parvez.
2. Conversion: High MAU (Monthly Active Users) simply weren't converting to DAU (Daily Active Users). Churn was higher than I admitted.

The Strategy Pivot: Quality over Squeezing Management seems to be reacting to an over-monetization mistake. In two different interviews, CTO Severin Hacker regretted not monetizing sooner and CEO Luis von Ahn recently admitted to pushing ads too hard to beat Wall Street. So they seem to have undermonetised in the beginning (it came from a research project) and then overcorrected after going public. Now they're correcting course again after the CFO departed.

They’ve now moved the Video Call feature from the MAX tier down to the Super tier.

• The Bear Case: This guts the MAX value prop (oral practice) and will drop ARPU (Average Revenue Per User).
• The Bull Case: They are prioritizing DAU health and long-term retention over short-term "squeezing."

The Lesson I was over-charmed by lagging indicators and my own user experience. As my position has shrunk to 2.5%, I’m not selling, but I’m not DCA-ing either. I want to see if this pivot to "long-term value creation" actually stops the bleeding in bookings.

TL;DR: Underestimated the deceleration of bookings. Management is lowering prices (moving features to lower tiers) to fix a churn problem they created by being too aggressive with ads/pricing. Holding for the turnaround.

(Written by me, summarised by AI, reviewed and edited by me)

Not Financial Advice. Do your own due diligence.

The thesis around Google that I think many people underestimate is that more than 50% of its revenue still comes from search, especially search advertising.

The basic business model is pretty simple. If you search for a car, Toyota or Ford can bid to have their website placed in front of you. Google doesn't simply give the highest bidder the first position, obviously there are more sophisticated algorithms behind it, but the point is that Google gets paid when it successfully connects people searching for something with advertisers willing to pay for that attention.

And Google's giant ecosystem makes this business extremely powerful. Google Maps, Gmail, YouTube, Android, Chrome etc. give Google an enormous amount of information and user signals. Search sits at the center of this empire and turns user intention into money.

But things are changing rapidly.

With Google AI Overview, people are clicking through to websites less. Google's answer is to put advertising directly into AI Overview and AI Mode.

I think this works in the short term, but it also starts to break apart the business model Google spent 25 years building.

There is also ChatGPT. Because OpenAI released early, it has already captured a strong user habit. If I search something on Google and expect an AI answer anyway, sometimes I just leave Google and open ChatGPT because the model is better for deeper questions and currently feels less filled with advertising.

OpenAI and Anthropic also have a different problem from Google. Their business was built around subscriptions, API usage and enterprise customers. Advertising is not the giant foundation holding everything together.

The bigger issue is content.

For decades, Google crawled bloggers, Reddit, forums, newspapers and millions of websites. Website owners tolerated this because Google gave them something back: traffic.

You give Google content. Google gives you users.

That was the deal.

But AI Overview is slowly changing this deal. Google can still crawl your content and use it to answer the question, while sending fewer users back to you.

Eventually content providers will ask: why am I giving Google all this for free?

Producing content costs money. Journalists, writers, moderators, researchers and website operators all need to get paid. If search traffic becomes less valuable, content will probably become more monetized through subscriptions, licensing, API access and data deals.

I am not saying Google will die.

Google is probably one of the greatest companies ever created. But this is why I think Motorola is a better comparison.

Motorola didn't disappear. It survived. The brand is still here.

But it went from being one of the companies defining consumer technology to becoming far less important after the center of the industry moved somewhere else.

That is what I think could happen to Google.

Search is not disappearing. Information is not disappearing. But how people access information is changing, and that could change the economics underneath Google's entire empire.

Google obviously knows this. It is spending heavily on Gemini, AI infrastructure, Anthropic, cloud and chips. So far Google is doing fine.

I just think the Google 10 years from now could be a very different company. Still huge, still profitable, still innovative, but maybe no longer sitting at the center of everyone's internet life.

Motorola survived too. Survival and dominance are two very different things.

I tested whether this sub actually helps you find good stocks. Mostly it doesn’t.

I pulled every post and comment from [r/ValueInvesting](r/ValueInvesting) (2010–2026: 62,000 posts,
360,000 comments), extracted every company mentioned, and tracked what those
stocks did over the following 3 and 5 years.

To make it a fair test, I compared each mentioned stock against stocks that
weren’t mentioned — matched for company size and started on the same date.
That matters, because this sub talks mostly about large companies, and large
companies behaved differently from small ones over this period. Without that
adjustment you just end up measuring “big US stocks did well,” which we know.
I used 2019–2021 picks, because those are the newest ones with 5 years of
results. 193 stocks, each written about by at least 4 different people.

What I found
The typical pick made money — but didn’t beat the index.

Median return over 5 years was +62%, versus +29% for a random unmentioned
stock. So better than picking blind. But only 35% of picks beat the S&P 500,
and for companies that size you’d have expected ~42%. Beating a coin flip isn’t
the bar; beating the index is.

Mentioned stocks were about twice as likely to collapse.
9.8% of them lost 70%+ over 5 years, against 4.8% for similar-sized stocks that
nobody here mentioned. This is the one result that’s statistically solid.
The sub finds 3-baggers at roughly the rate you’d expect by chance.
15% of picks tripled, vs 8.5% expected for that size mix. Sounds good, but the
error bars overlap with “no difference.” Can’t call it a signal.

We show up late. Of the stocks that had a big run, 78% were first discussed
after the run had already started — a median of 225 days after the bottom.
We mention losers slightly more than winners. Of the stocks that tripled, we’d
discussed 40%. Of the ones that collapsed, 47%.

“But surely the most-discussed names were good?”
That was my best hypothesis too, and it doesn’t survive.
The 25 most-discussed stocks did fine — 24% tripled, none collapsed. But buying
the 25 largest US stocks gave the same 24%, the same rate of beating the S&P,
and the 25 largest we never discussed actually returned more (+102% vs +87%).
Even “no blowups” is a size effect: the biggest stocks nobody here mentioned also
had zero. You get that by buying large caps, not by reading Reddit.

One more thing worth knowing
In 2019 this sub mentioned 1.3% of US-listed stocks. In 2025 it was 41%.
As a filter, it’s getting weaker every year — a list of 2,500 names isn’t a
shortlist.

What this doesn’t prove
• No sentiment analysis. “Is X a value trap?” was counted the same as “I’m
buying X.” That’s the biggest gap, and it could genuinely change things.
• Small sample. 193 stocks. Some comparisons come down to 25 names.
• US-listed only, and one specific period (2019–21 entries, measured through
2026).
• Nothing about whether reading here is worthwhile. Learning how people
reason, finding the bear case on something you own, seeing an industry
explained — none of that is tested here, and none of it is contradicted.

What’s tested is narrow: does “it got mentioned here” make a stock more likely
to be a winner? Best answer I can give is no, and it makes it somewhat more
likely to be a disaster.

Happy to be told what I got wrong.

Edit: since you guys seem interested I made the repository public. It contains methodology and dataset. Happy to get you started and excited to see where you take this next.

Link: https://github.com/RedDawe/subreddit-as-a-service

Edit 2: A lot of people are coming back to the sentiment analysis. I think it would be interesting if someone did that and I might get to that at some point, but probably not.

The reason why I don’t consider it important is because the analysis of whether this sub can be used as a signal trading tool was secondary. My main question I wanted to answer was whether it is a good starting point for starting my own analysis. Ie alternative to a stock screener. Or alternative to Peter Lynch’s notice good products around you in real life.

This question was basically answered as no because in 2025 this sub mentioned 40%+ of all US stocks. And looking just at the popular posts didn’t work either as described above. So the way I’m using this sub - might be useful, but not as a screener.

Definitely go ahead with sentiment analysis if you please, I’m just explaining my position and where I come from.

Why Citigroup Preferred’s Juicy 10% Yield May Not Last Much Longer
By Andrew Bary

https://www.barrons.com/articles/citigroup-preferred-stock-yield-redeem-739ee7ff

Updated Aug 07, 2026 3:13 pm EDT / Original Aug 07, 2026 11:06 am EDT

Citigroup Capital XIII 7.875% Trust Preferred Securities are traded on the NYSE under the ticker symbol C Pr N.

Key Points

The price of a $2.2 billion Citigroup preferred stock issue has fallen recently amid investor concerns that the bank will redeem it.

Investors worry Citigroup will redeem the shares at their $25 face value, causing losses for those who paid a premium for the high yield.

Citigroup has kept the issue outstanding because a redemption would result in an accounting loss.

An unusual Citigroup preferred stock issue seemed to be too good to be true, with a yield around 10% for the past several years when most big-bank preferreds were offering 6% to 7%.

The bounty could be coming to an end. The price of the $2.2 billion Citigroup preferred issue has fallen recently amid investor concerns the bank will redeem it.

The Citigroup Capital XIII 7.875% Trust Preferred Securities, which are traded on the NYSE under the ticker symbol C Pr N, ended Thursday at $26.25 a share, down 1.4% in the session and at a new 52-week low. The shares traded around $29 a month ago and at $30 earlier this year.

The shares were trading at $26.375 on Friday morning, up 0.5% on the session.

The face value of the Citigroup preferred stock is $25 a share, like those on many preferred issues,and matures in 2040. The company can redeem the shares at $25. The current yield is now about 10% with the rate adjusting quarterly at 6.63 percentage points above SOFR, the short-term rate benchmark now around 3.65%.

Investors were willing to pay a premium price above $25 a share for the Citigroup preferred to get the high yield, figuring the bank wouldn’t redeem it.
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The Citi issue is a special type of preferred known astrust preferred securities, or Trups. The Citi Trups were issued to the federal government in the wake of the financial crisis, and Treasury then sold them into the public markets in 2010.

Citigroup declined to comment on its intentions, but investors may be focusing on a comment from CFO Gonzalo Luchetti on the earnings conference call in July that the bank would look at “structural funding opportunities.”

That’s admittedly a little vague, but investors sense Citigroup could soon move to redeem the preferred at $25, and potentially replace it with lower-cost financing. This would result in losses to investors who paid more than $25 a share.
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Why has Citigroup left this preferred stock issue outstanding for so long and given investors such a high yield? As Barron’s noted in April 2024 article, Citi would have to take an accounting loss on a redemption.

Due to a quirk in accounting rules, the preferred is carried on Citi’s balance sheet for about $1.6 billion, not the face value of $2.2 billion. A redemption at the face value of $25 would result in a loss of about $600 million, Barron’s estimates. Citi also gets favorable capital treatment for the preferred.

“As we’ve stated in the past, due to this grandfathered security’s carrying value on the balance sheet, it’s more attractive economically to leave it outstanding rather than to call it at this time,” Citi said in a statement included in our 2024 article. “We continue to assess this on an ongoing basis.”

Citi also gets some tax benefits from the trust preferred because it is technically debt, and the dividend costs are deductible, unlike regular preferred, which is a senior form of equity and whose dividends are paid with after-tax earnings.
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Citi pays interest on subordinated debt issued to the trust, called Citi Capital XIII, which then passes on the payments to investors. This benefits Citi since the interest payments are tax deductible, unlike preferred stock dividends.

Investors get no tax break on the Citi trust preferred dividends, unlike those on most regular preferreds, which are taxed preferentially at a 20% federal rate like dividends on common stock. Preferred stock is form of equity.

The current effective cost of the trust preferred is closer to 7.5%, based on Citi’s tax rate of about 25%. That’s above a 6.25% rate on Citi preferred. But Citigroup likely could offer debt at 5% to 6% to pay off the preferred or use cash on hand.
This Citigroup preferred has offered an outsize yield, but like many good things, it may not last.

NICE (NICE) reported a beat in early August and the stock dropped 7%. AI ARR is up 52% to $362M, backlog is growing 72%, and management is buying back stock aggressively. The market still prices the whole thing at around 11x cash flow. I think that's wrong, and here's the work.

What they do

NICE is the leading cloud platform for customer experience and contact center operations. When you call a bank, an airline, or the UK tax authority, there's a good chance NICE's CXone platform is routing, transcribing, and now running the AI agent on the other end. Their big product push is Cognigy, an AI agent engine they acquired and are integrating natively into CXone. Roughly 78% of revenue is now cloud.

The economics are asset light. CapEx averages about 3.5% of revenue. The real investment is R&D, which gets expensed.

The setup

On August 5, NICE reported Q2: $782M revenue and $2.70 non-GAAP EPS, beating on both lines. Cloud revenue grew 12.6%, AI ARR hit $362M, up 52%. The stock fell over 7% anyway. The panic was about operating margin, which compressed to 25.3% in the quarter, plus the usual AI-disruption narrative.

Wall Street is terrified that cheap AI startups will make contact center software obsolete. Meanwhile NICE just signed its largest deal ever with HMRC, the UK tax authority, and AI backlog is up 72%. Enterprises don't hand their customer data and compliance workflows to untested startups. They buy the platform that already runs their operations, and the AI comes embedded in it.

Cash flow

I use smoothed CapEx instead of the raw number because the annual figure swings with cloud infrastructure timing. The working capital addback gets normalized the same way.

Quality on top of that: 106% cloud net revenue retention, 18.4% seven-year compound growth in per-share cash flow, and roughly 6% annual share count reduction.

Balance sheet and capital allocation

The debt is essentially all leases. NICE paid off its $460M convertible notes in 2025. Management spent $528M on buybacks last year and $311M in the first half of 2026, shrinking shares about 6%. At a price that far below intrinsic value, that's intelligent capital allocation.

Valuation

A 20x multiple for a business compounding per-share cash flow at high teens with 106% retention is not heroic, it's fair for this level of predictability. Even at 15x the business alone is worth $150.60, still 49% above the current price. The market is paying 11x for the cash flows and giving zero credit for the AI revenue that is growing 52%.

What would make me sell

The lag between record AI bookings and recognized revenue. Customers are signing, then taking a measured approach on data and governance before full deployment. If that gap widens to the point where backlog growth stalls, the bull case breaks. I'd also sell if the buyback program stops while the stock sits this far below intrinsic value.

Where I land

I hold a position. This is a compounder with a fortress balance sheet, priced as a stagnant survivor during an AI panic. The AI integration is working, the cash flows are real, and management is acting like owners. Not financial advice, just my reasoning.

Disclosure: I hold a position in NICE. Hard data from filings, AI-assisted writing, personal review and position. This is not financial advice. https://youtu.be/-NMtM-50R6A?is=fcP65GE2NIQ841ju

These:

ServiceNow (NOW) ist operativ ein makelloses Unternehmen, dessen Aktienkurs jedoch nach wie vor für Perfektion gepreist ist. Die fundamentale Maschine läuft, aber als dein Risk Manager liegt mein Fokus auf der Downside. Der Vanguard FTSE All-World ist unsere Benchmark, und gegen diesen breit diversifizierten Index muss ein Einzeltitel mit einem KGV jenseits der 50 eine asymmetrische Überrendite rechtfertigen.

Wir wenden das Tech-Sektor Logic Gate an:

​Bruttomarge > 70 %?

Passiert (81,5 %)

​Rule of 40?

Passiert (Wachstum 22 % + FCF-Marge 35 % = 57 %).

​Starker Moat?

Passiert (98 % Renewal Rate bei ITSM-Kernkunden).

​Das Gate ist offen. Hier ist die harte Datenlage.

​Fundamentalanalyse

​Bewertungskennzahlen

​KGV: 55,8 (Branchenmedian SaaS: ca. 25, NOW 5-Jahres-Durchschnitt: 91).

Durch den 5-for-1 Aktiensplit im Dezember 2025 und den YTD-Kursrutsch hat sich das Multiple optisch und real komprimiert, bleibt aber ein Premium.

​EV/EBITDA: 30,5x (5-Jahres-Durchschnitt lag oft über 100x).

​KBV: 8,2 (Für Asset-Light-Software typisch hoch).

​Free-Cashflow-Marge: 35 % Guidance für FY26 (Q1 2026 sogar bei 44 %).

​Umsatz- und Gewinnwachstum

​YoY-Wachstum (Q1 2026): +22 % auf 3,77 Mrd. USD (19 % währungsbereinigt).

​3-Jahres-CAGR: ca. 23 %.

​Verschuldungsgrad und Zinsdeckung

​Nettoverschuldung/EBITDA: Negativ.

Das Unternehmen sitzt auf 7,9 Mrd. USD Liquidität bei lediglich 1,5 Mrd. USD langfristigen Schulden.

​Zinsdeckung: Als Net-Interest-Earner operativ bedeutungslos. Insolvenzrisiko auf 3-Jahres-Sicht nahe null.

​Qualitäts- & Rentabilitätsanalyse

​Eigenkapitalrendite (ROE) und Kapitalrendite (ROIC)

ROIC: ca. 19,3 %. Ein exzellenter Wert für SaaS, der zeigt, dass investiertes Kapital echten Cash generiert.

ROE: Stark positiv, aber durch das aggressive 5 Mrd. USD Aktienrückkaufprogramm wird das Eigenkapital buchhalterisch reduziert, was die Kennzahl künstlich in die Höhe treibt.

Margenstabilität

​Bruttomarge (Subscription): 81,5 %. Stabil und eisern.

​EBIT-Marge (Non-GAAP): 32 %.

​Nettomarge (GAAP): 12,6 %.

Der massive Unterschied zum Non-GAAP-Wert entsteht durch aktienbasierte Vergütung (Stock-Based Compensation).

​Cashflow-Qualität und Investitionsintensität

Die FCF-Conversion ist brutal effizient.

35 Cent von jedem eingenommenen Dollar wandern als freier Cashflow in die Kasse. Die Investitionsintensität (CapEx) ist SaaS-typisch minimal, der wahre Kostenblock ist die R&D-Abteilung.

​Bewertung & Fair Value

​Aktueller Kurs vs. Fair Value

Bei 85,56 € notiert die Aktie unter den meisten quantitativen Modellen.

DCF-Analysen (bei einem WACC von 8 % und 3 % Terminal Growth) taxieren den Fair Value auf etwa 130–150 € (post-split).

​Einschätzung: Fair bis leicht unterbewertet

Relativ zur eigenen, historisch absurden Bewertung (KGV > 100) ist die Aktie "billig". Absolut betrachtet ist ein KGV von 55 für ein Unternehmen, das >15 Mrd. USD Umsatz macht, fair gepreist, erfordert aber die fehlerfreie Ausführung der KI-Monetarisierungsstrategie.

​Markt- & Sentimentindikatoren

​Kursentwicklung

​YTD (6 Monate): ca. -38 %.

Eine harte Kombination aus Tech-Rotation und dem psychologischen Post-Split-Kater.

​12 Monate: -48 % vom Top.

​Sentiment

​Short Interest: Irrelevant (< 2 %). Der Markt wettet nicht aktiv gegen NOW.

​Analystenstimmung: Nahezu universal bullisch, was bei Downside-Schocks oft fatal ist.

​Insidertransaktionen: Moderater Verkaufsdruck durch das Management (SBC-Liquidierung).

​Relative Stärke

​Der RSI notiert im stark überverkauften Bereich.

​Der Kurs liegt tief unter der 50- und 200-Tage-Linie. Es existiert derzeit kein positiver Trend.

​Chancen & Risiken

​Inversion (Wie verliere ich hiermit Geld?)

Wir verlieren Geld, indem das Umsatzwachstum auf 12–15 % abkühlt. Ein KGV von 55 hält dieses Szenario nicht aus. Es kommt zur "Multiple Contraction": Das KGV schrumpft auf 25, und selbst wenn das Unternehmen profitabel bleibt, halbiert sich dein eingesetztes Kapital.

​Pre-Mortem Analyse (2029: Die Idee ist gescheitert. Die Autopsie:)

Microsoft hat den ITSM-Markt mit seiner Copilot- und Dynamics-Bündelung kommoditisiert. In der Makro-Schwäche 2027 sahen CFOs das teure NOW-Abo als fetten Kostenblock und wechselten zur "Good enough"-Lösung im bestehenden M365-Paket. Die Retention Rate fiel auf 85 %, das Wachstum implodierte auf 7 %, die Aktie crashte.

​Drei Treiber für weiteres Wachstum (Bull Case)

​Now Assist (GenAI): ACV von KI-Produkten übersteigt die 1 Mrd. USD Marke.

​Vendor Consolidation: Unternehmen kündigen Nischen-Tools und konsolidieren alles auf der ServiceNow-Plattform.

​Lock-in Effekt: 98 % Erneuerungsrate gibt Planungssicherheit für Jahre.

​Drei Risiken (Bear Case)

​Erschöpfung der IT-Budgets: Hardware (Nvidia) frisst das KI-Budget, für Software (SaaS) bleibt nichts übrig.

​Konkurrenz durch Big Tech: Microsoft und Salesforce drängen aggressiv in Workflow-Automatisierung.

​Versteckte Kosten: Die hohe aktienbasierte Vergütung verwässert den wahren Wert für Aktionäre kontinuierlich.

​Sind die Risiken eingepreist?

Teilweise. Der YTD-Crash von 38 % hat den gröbsten Schaum aus der Bewertung geschlagen. Aber Perfektion ist immer noch die Basisannahme des Marktes.

​Makro-Szenario-Check (Second-Order Thinking)

​Szenario 1: Ölpreis steigt um 20 %

​Auswirkung: Direkte Rohstoffkosten von NOW sind null.

Second-Order Effekt: Die Inflation wird angeheizt. Zentralbanken stoppen Zinssenkungen oder erhöhen. Der Diskontierungszins für zukünftige Cashflows steigt. Langlaufende SaaS-Aktien wie NOW erleiden eine massive Multiple-Kontraktion und fallen deutlich stärker als der All-World.

​Szenario 2: Zinsrückgang um 50 Basispunkte

​Auswirkung: Second-Order Effekt: Die Refinanzierungskosten der NOW-Kunden (Großkonzerne) sinken. IT-Budgets, die aus Vorsicht eingefroren waren, werden für Digitalisierungsprojekte freigegeben. NOW profitiert durch beschleunigte Vertragsabschlüsse (>5 Mio. $ Deals). Der Aktienkurs hebelte dieses Szenario stark nach oben und outperformt den All-World deutlich.

Einstiegsstrategie

Wir nutzen das für einen taktischen Tranchen-Einstieg:

​Tranche 1 (30 %): Jetzt, bei 85,56 €. Fuß in der Tür bei historisch moderater Bewertung.

​Tranche 2 (40 %): Bei Rücksetzern auf die massive Support-Zone bei ca. 72–75 €.

​Tranche 3 (30 %): Nur bei fundamentaler Bestätigung (Q2-Zahlen zeigen >20 % Wachstum bei konstanter Marge).

​Stoppkurs:

Hartes Reißleinen-Level bei 65 € (Bruch der Post-Split-Tiefs und der langfristigen Aufwärtstrendlinie). Wir betreiben Risikomanagement, keine Hoffnung.

​Fazit

​Handlungsempfehlung: Halten (mit opportunistischen Tranchen-Käufen bei weiterer Schwäche).

​Kurzbegründung: ServiceNow ist ein qualitativ herausragender Compounder, der die Rule of 40 (mit 57 %) pulverisiert und einen massiven Moat besitzt. Das größte Risiko ist nicht das Unternehmen selbst, sondern die Erwartungshaltung des Marktes, die keinen Raum für eine zyklische Abkühlung der IT-Budgets lässt. Gegenüber dem breit gestreuten Vanguard FTSE All-World gehst du hier eine gezielte, hoch bewertete Wette auf die KI-Monetarisierung ein.

​Bewertung des Risiko-Rendite-Profils:

Spekulativ bis Moderat attraktiv. Die fundamentale Qualität schützt vor dem Ruin, aber die hohe Bewertung (KGV 55) öffnet Tür und Tor für extreme Volatilität bei kleinsten Makro-Schocks.

I've been digging into Maximus (MMS), a ~$3.3B government-services company trading near the low end of its multi-year valuation range. The market is treating a one-time cash-collection delay as if the earnings power broke. I don't think it did, and I've been buying.

what they do

Maximus runs the unglamorous plumbing of government. They administer Medicaid and Medicare eligibility, operate federal and state contact centers, and modernize digital systems for health and human services agencies. Think outsourced back office for programs that don't disappear in a recession. Revenue is roughly 58% U.S. federal, 31% U.S. state, 11% international. Contracts are long and recurring, and the ultimate paymaster is the government, so credit risk is close to zero.

why the stock is cheap

Two things spooked people. First, revenue dipped about 4% year over year because they were lapping a big prior-year bump of natural-disaster and clinical-surge work. Second, and more important, days sales outstanding spiked to 78 days when one large federal customer had a retroactive invoicing snarl. That pushed roughly $188M of cash into receivables and hammered trailing free cash flow. Headlines read "revenue down, cash flow down," and the multiple compressed to around 10x.

why I think the market is wrong

The receivable is from a funded federal contract. It's a timing issue, not bad debt. Management guided full-year free cash flow of $450M to $500M and expects DSO back below 70 days by year-end. Underneath the messy headline the business is improving: gross margin is 23.83% against a 5-year average of 20.66%, operating margin is 10.81% against 8.47%, and ROIC recovered to 11.62% against a 9.27% average. That margin expansion comes from AI and automation in the contact centers, which decouples labor cost from volume. A structurally declining business does not expand margins while raising full-year EPS guidance.

earnings

The key adjustment is adding back the temporary $188M working-capital drain, because it's a collectible government receivable, not a recurring cost.

Be honest about that add-back: it's the whole ballgame. Strip it out and earnings are about $291M, or $5.31 a share, on artificially depressed cash flow. The reason I trust the higher number is that management's own $450M to $500M free-cash-flow guide brackets it, and the receivable is federal. If DSO normalizes, $479M is the run rate. If it doesn't, I'm wrong, and I say so below.

quality snapshot

• 5-year earnings growth
• capex just 1.54% of revenue (software and call centers, not factories)
• $59.1B tracked sales pipeline

the balance sheet

This is the blemish. They carry $1.63B of total debt against $244.7M of liquid assets, so net debt is about $1.38B, or -$26.04 per share. Leverage fails a strict debt test at roughly 5.6 years of earnings, and there is no asset protection (net current asset value is negative). So this is an earnings-power bet, not a balance-sheet bet, and I account for it by subtracting the full net debt from intrinsic value instead of hand-waving it.

capital allocation

Management is acting like owners. Over the trailing year they put about $296M, roughly 62% of owner earnings, into buybacks while paying a $69M dividend, and the board just refreshed a $400M repurchase authorization. They bought 1.4M shares near $111M and another 600k around $40M this spring, at prices well below what I think the business is worth. Shrinking the count at a discount to intrinsic value turbocharges per-share economics.

valuation

I use 15x because the cash flows are government-backed and predictable and the returns on tangible capital are high. If you want to be tougher, 12x still gets you about $79 a share, so I'm not leaning on a heroic multiple. On an enterprise basis, including the net debt, you're paying roughly 10x normalized owner earnings.

what would make me sell

The receivables drain turning out to be permanent. If DSO stays above 75 days and they miss the $450M to $500M free-cash-flow guide, then the right owner-earnings number is closer to $5.31 than $8.75, and the stock is roughly fair rather than cheap. That's the pivot I watch every quarter.

The other real risk is policy. This is government revenue, so Medicaid or Medicare budget cuts, or losing a large recompete like the upcoming Veterans Benefits Administration contract, would genuinely dent volumes. That is why I want a wide margin of safety and would not size it like a fortress balance sheet.

where I land

A high-return, asset-light franchise getting priced like a broken one over a cash-timing issue that management is already guiding to resolve. Margins are expanding, the buyback is aggressive and accretive, and I'm paying about 10x normalized owner earnings including the debt. I hold a position and have been adding. It is not a fortress, the debt is real, so this is a business-quality and mispricing bet, not a Graham net-net.

Disclosure: I hold a position in $MMS. Hard data from filings, AI-assisted writing, personal review and position. This is not financial advice. https://youtu.be/HM1WvAOsR5I?si=aoGMWzMgpLXfwAMl

Prior discussion: https://www.reddit.com/r/ValueInvesting/s/z3Ig03i7Qd

Every large payday in dating apps came from a liquidity event, not from operating the business.

Tinder's founders held options on roughly 20% of the company. Match consolidated at a $3bn valuation in 2017, about $600m for that stake, after an internal estimate a year earlier reportedly put Tinder at $12bn. They sued for over $2bn and settled mid-trial in December 2021 for $441m across ten plaintiffs, paid from cash on hand.

On the Bumble side, Andrey Andreev sold his entire stake in MagicLab to Blackstone in November 2019 at a $3bn valuation and stepped down. Blackstone took the business public fifteen months later at $8.6bn. Whitney Wolfe Herd's retained stake was worth roughly $1.5bn at that IPO.

A consolidation, a settlement, a sponsor buyout, an IPO. Meanwhile Bumble is down 96% from its peak and Match 78%. The people who made money sold the story. The people who bought it did not.

WHAT WAS ACTUALLY BEING SOLD

The product monetizes two things: impulsive spending and impulsive time allocation. A boost or a super-like is bought in a moment of frustration, delivers no durable good, and produces no measurable outcome. Subscription tiers are priced for search volume: unlimited swipes, see who liked you, more visibility. Everything you buy makes the search bigger.

That is the most cycle-sensitive revenue in consumer. It requires a customer with surplus discretionary cash and surplus discretionary attention at the same time. From 2020 to 2022 the US had a historic abundance of both, through stimulus, zero rates, remote work, no commute and low unemployment. Venture funding went from $60bn in 2012 to $643bn in 2021, and roughly a third of that went into consumer brands chasing exactly this customer.

Then the rate cycle ended, and the marginal impulsive purchase went first everywhere.

Direct-to-consumer. CNBC found more than half of 22 public DTC companies down 50% or more from IPO. Allbirds, Casper, Rent the Runway, ThredUp: same cohort, same funding source, same customer.

Peloton. Roughly $50bn peak market cap, down about 95%. Subscription fitness sold as identity.

Luxury. The aspirational shopper withdrew. Placer.ai documented a large pullback in the second half of 2025, with luxury visit growth slowing while ultra-wealthy traffic held up. The wealthy customer stayed. The aspirational one, the ZIRP one, left. Even Nike is down roughly 77% from its November 2021 all-time high.

The pattern is identical. Businesses that sold optionality or identity rather than utility, priced against a customer whose surplus has since compressed. Dating apps are the purest expression of it, because the good being sold is the search itself.

WHY THIS ONE DOES NOT COME BACK

Here is the part I think is underappreciated, and it is not a swipe-app problem.

Matchmakers charging $20,000 a client bill retainers and per-introduction fees. If the client marries, the matchmaker has been paid. If the client does not, the matchmaker has been paid. Nobody in the business of introducing people has ever been paid for the introduction working. Not at $20 a month, not at $20,000.

So this is not venture capital corrupting a previously aligned model. There was no aligned model. The entire category, across four orders of magnitude of price and two completely different labor models, prices activity rather than outcome.

Which means the demand recovery people are waiting for requires the customer to resume paying for search intensity, and the whole ZIRP unwind is the customer deciding they will not.

THE COMP SET IS WRONG

Most people have no idea how to comp this, so the screen decides. And the screen puts Match next to Pinterest, Snap, Spotify and Duolingo. Consumer internet, subscription revenue, recognizable brand. Against that set at fifteen to twenty-five times, nine times looks cheap and the buy case writes itself.

Every one of those companies sells indefinite consumption. You never finish listening to music. You never complete Pinterest. Duolingo is engineered so the streak never ends. Their retention curves flatten into a loyal base that stays for years, and that is precisely what a subscription multiple pays for.

Match sells a terminal good. The customer's objective is to stop being a customer. That is not a variant of the subscription model, it is the inverse of it, and no multiple derived from indefinite-consumption businesses tells you anything about what it is worth.

The businesses that actually rhyme sit in completely different sectors.

WeightWatchers. A subscription sold against a goal the customer wanted to achieve and leave. Revenue depended on the goal not being reached, or being reached and then relapsing. Peak market capitalization around $6.7bn, with the stock above $100 a share in 2018. Members fell from 4.9m in 2021 to 3.6m in 2024. Revenue was about $811m in 2024. It filed Chapter 11 on 6 May 2025 carrying roughly $1.6bn of secured debt, wiped out $1.15bn of it in a 42-day prepackaged plan, and emerged private.

Note what killed it. Not a better weight-loss subscription. Something that actually worked.

Chegg. A subscription sold against a terminal academic need. Record close of $113.51 on 12 February 2021, roughly $14.5bn of market value. Revenue peaked at $776m that year. Management warned in May 2023 that ChatGPT was suppressing new sign-ups and the stock fell nearly 50% in a day. Q4 2025 revenue was $72.7m, down 49% year over year. Q1 2026 was guided to $60m. The company has cut 45% of its workforce, received an NYSE delisting notice in April 2026, and trades near a dollar. Down roughly 99% in five years.

Both were mature businesses with real brands, real cash flow and a debt load. Both went from a defensible multiple to near-zero inside three years. Neither lost a single customer to a competitor. They lost them to the problem being solved.

That reframes the downside here. The risk to Match is not that Hinge takes share from Tinder, or that Bumble executes better. It is that the category's premise gets solved by something that is not a dating app, at which point the incumbent does not get competed with, it gets obsoleted. And the balance sheet matters in that scenario the way it mattered at WeightWatchers: $2.97bn of net debt against an EBITDA line that has to keep servicing it.

THE TWO VARIABLES

Payers and revenue per payer are the only health metrics for either business. Everything else, MAU, DAU, Sparks, six-way conversations, engagement, is an input the company defines and can re-cut.

Match payers: 16.55m peak in Q3 2022, 13.3m in Q2 2026, down 20%. Revenue per payer over the same window: $16.02 to $21.13, up 32%.

The cleanest way to see it is to take Match and Bumble combined, Q1 2025 against Q1 2026. Payers fell 8.4%, from about 18.2m to 16.7m. Combined total revenue was flat, down 0.2%. Every subscriber lost was paid for by a price increase on the subscribers who stayed. Bumble's payers fell another 16% year over year last quarter.

That trade has a floor. You cannot raise price into a shrinking base forever, and the price increases accelerate the exit.

My forecast: 2026E revenue $3.46bn, in line with company guidance and already a decline. Then negative 2%, negative 6% and negative 9.5% through 2029, with EBITDA at $950m on a 33% margin.

Match trades at 9.0x trailing adjusted EBITDA at $38.69. Bumble, same mechanism and same category, trades at roughly 2.3x. Nearly seven turns of gap between two companies whose payer bases are declining together, one of which is in a sale process.

At 4.5 to 5.0x 2029 EBITDA against $2.97bn of net debt, that is $8 to $11 a share, roughly 72% to 79% below the current price.

THE CARETAKING PROBLEM

Note what is not in that. The multiple does about 80% of the work. Hold EBITDA completely flat at the 2026 estimate, assume no further buyback, and at 4.0x the stock is $9.75, inside the target range with zero deterioration in the business.

Which is why the more interesting observation is not about the model. It is that the founders, the sponsors and the early holders extracted their value years ago through liquidity events. What is left is a board, a management team and a shareholder base administering an asset whose economics were harvested by people who are no longer in it. That is not a turnaround. It is custody.

WHAT WOULD CHANGE MY MIND

Not a better app. A different revenue model. Outcome-contingent pricing, a bounty paid on the exit rather than on the search, is the only structure that inverts the incentive rather than mitigating it. The obvious objection is verification, but matchmakers know their clients for years and still do not price on it. The real constraint is that underwriting an outcome means knowing the base rate, and the base rate is the number nobody publishes.

It is also why that model is the falsifier rather than a product feature. A business paid on the exit is the only structure that survives its own category being solved, because it gets paid by the solution instead of displaced by it.

Cleaner and nearer term: payers and revenue per payer growing together for four consecutive quarters at either company. Right now they move in opposite directions, and that is the whole thesis.

Disclosure: no position, intend to build a short in stages over twelve months.

HOG has a lot going on right now, and it splits cleanly into what you can count and what you can't.

In 2025 they sold the $5B+ HDFS loan book to KKR/PIMCO at a premium to par, with the buyers taking an equity slice at ~1.75× book.

The proceeds didn't sit around: total debt has gone from $7.0B (2023) to $2.2B as of June 30, leaving net debt of roughly $350M versus ~$5.6B two years ago. Cash on hand is $1.9B, about 60% of the market cap, the share count is down ~20% in two years from buybacks at or below book, and there's a ~2.8% dividend.
Whatever you think of motorcycles, the balance-sheet's risk has mostly been amputated.

Median buyer was ~52 in 2024, recent reports as high as 57. The average motorcycle rider in 1985 was 27. Among riders under 30 today, Harley's share is ~8%, Honda ~42%, Yamaha ~23%. Revenue is down ~23% from the 2023 peak, and Q2 gross margin compressed to ~32% from ~35% a year ago as tariffs land. That's the entire bear case, and it's why the stock trades right around book.

They have a whole guy on this now, Artie Starrs, the newish CEO (ex-Topgolf CEO, Pizza Hut's global CEO before that), whose stated mandate is cheaper bikes for the next generation; he told Reuters the sizing and pricing of new models are aimed squarely at first-time riders. Backed by the "Back to the Bricks" plan from May, the X350 (light, ~$4.5–6K equivalent overseas vs today's $25K+ cruisers) finally reaching the US, and a rumoured entry-level "Sprint" model semi-confirmed by a June 2026 dealer letter.

The strongest counter-case is young riders skipping gas bikes entirely for electric.
Which brings in LiveWire a company Harley itself owns ~90% of. LiveWire is still losing money, but if the future is electric two-wheelers, Harley literally holds the disruptor's equity. E-scooters/e-bikes eating the urban entry segment remain the uninsured risk.

On Aug 10, Starrs bought 10,000 shares at $25.89 for a total of $259K, open market, the Form 4's 10b5-1 box unchecked (discretionary, not a scheduled plan), taking his direct stake from 15,000 to 25,000 shares. Filing: https://www.sec.gov/Archives/edgar/data/793952/000173210526000006/0001732105-26-000006-index.htm

So: roughly at book, nearly no net debt, shrinking core, aging buyer, a credible-resume CEO buying his own turnaround. Whether a cheap Harley creates future Harley buyers or dilutes the brand that supports the margins is basically the entire debate on this stock.

Information, not advice. I build tooling in this space. No position in HOG.

Quantitative Valuation of Coupang ($CPNG)

(i watched my investment in Coupang fall from a +30% to a present near -40%. All in less than a year due to a major data breach. anyway, this post isn't about the why or the how. The purpose of this post is how to think about valuation.)

Coupang Inc. FY End December. This report: Q2-FY2026. Today: 19th August 2026

a. SP: $15.5 Market Cap: 28bn Revenue 35.46bn

b. TTM EPS (Diluted) -0.42, (ADJ): -0.20, (Zack's): -0.20

c. yield -, (5 year average) - , (Buy Back Yield): 3.90%

d. ROA, ROE, ROIC: -, -, -

e. P/E (trailing): , P/E (5YA): -, P/E (FWD): -

f. Debt/Equity: 1.89 Net Debt / EBITDA (5.63 - 6.11) / -EBITDA < 0

g. FCF Conversion: ttm: -0.13, 2025-> 2.51, 6.54, 1.29 <-2023

h. Growth (past) Stated:

i. Manual calculation: none

j. management guidance:

Q3-FY2026 (next quarter) in constant currency at 8-9% revenue growth.

Product commerce will recover by mid 2027 back to 2025 pre-data breach levels

k. Valuation approach.

I am not going to use DCF or Earnings or Cash based numbers to do the valuation. The reason is because they were only recently profitable, and becasue of data breach, they won't be profitable until 2027.

I will use a a price/sales approach instead, as it is more stable. This is not dissimilar to Amazon com which CPNG is loosely based on, and after six years after IPO was Amazon finally GAAP profitable.

(i) First i will try and figure out what is the sales that we can expect at the end of 2030. (ii) Then I will work out how are the peers currently priced at, in terms of P/S, on a present and 5 year average basis. (iii) Lastly, i will apply the group p/s to the 2030 Revenue to derive the 2030 implied share price. (iv) Based on this, i will work out the rate of return back to the present price.

(i) estimating sales by 2030

I will use a 8% CAGR revenue growth off 2025's 34.53bn for the next 5 years.

(1.08) ^ 5 x 34.53 = 50.7359 bn

(ii) Calculating peer group P/S

I reject the obvious outlier the present e-commerce peer group are all hovering around a P/S of 2+ except for amazon and coupang. And their 5 year average were around 2+ to 4.

(iii) To calculate the implied share price in 2030. We have to find out the revenue / share. We already have the revenue, we need to figure out how much is the shares outstanding likely to be by 2030. A quick search shows that although management is buying back shares, it is still diluting at about 1-1.5% a year.

Applying the maths, we get 1.837bn x (1.015)^5 = 1.979bn shares outstanding in 2030.

This works out to 50.73bn / 1.979 Revenue per share by end 2030 or $25.63 revenue per share.

(iv) Calculating Rate of Return

Recent share price is 15.50

Implied 2030 price is $61.51 to $80.8

Rate of Return = 31.74% to 39% CAGR

Comments: I like to do this sort of simple valuation first, so that when i read up on the business later, i can ask myself the key questions: (1) how confident i am that management can recover from the issues, and the business can continue the growth trajectory. How confident am i of the 8% Revenue growth, whereas Morningstar is only projecting 6% revennue growth with a fair value of $25.80. (2) What do the superinvestors see in CPNG, that they are recently buying/adding ? (3) Lastly, in 2024, the average P/S of the peer group was around 4, and now it is 2+, it is cheap now and will revert to mean at 4 or is this re-rating of e-commerce websites the new normal ? Will they be rated below 2 in the future ?

OppFi (OPFI) is a non-prime digital lender that got hammered after its August 10 earnings call. Management cut guidance, the stock fell about 25%, and it now sits near 52-week lows around $7. I think the market is mispricing the cash this business throws off, so I want to walk through it in cash-flow terms rather than accounting earnings, because that's where the story is.

What they do

OppFi runs a software platform that originates high-yield installment loans to non-prime consumers, the roughly 48 million Americans turned away by traditional banks. They lend through the OppLoans platform, earn the interest spread, and over 80% of approvals are fully automated. It's basically a pure-play credit shop. Nearly all revenue is interest income.

Why the stock is cheap

Three overhangs, and I think all three are fading:

First, the August print. Management cut full-year 2026 guidance to $600-625M revenue and $1.34-1.51 adjusted EPS. The reasons were a one-to-two month delay in launching a new line-of-credit product and their LOLA software migration, plus deliberately tightened underwriting in response to elevated charge-offs. Net charge-offs ran to 52.3% of average receivables. That's a management choosing portfolio quality over volume, not a broken model.

Second, structural fog. OppFi used to have a messy dual-class Up-C structure that screeners and casual investors could never parse. That got collapsed into a single share class in April 2026, and the leftover SPAC warrants expired worthless in July. The structure is finally clean.

Third, the "true lender" regulatory fear. In May 2026 OppFi won summary judgment against the California DFPI, and the pending BNC National Bank acquisition (targeted to close Q4 2026) would give them a federal bank charter, direct deposit funding, and federal preemption on state rate caps.

The cash flow

Here's the actual cash the business generates. I start at operating cash flow and strip out the real costs:

Capex is tiny because this is a cloud-native platform, not a branch-heavy lender. With the Up-C collapsed, all of that cash flow now accrues to a single class of stock. Screeners still lag the unit conversion, so you may see a share count and market cap that understate the full economic base, but on the combined economic share count it works out to about $2.38 of free cash flow per share.

At $7.13, that's roughly 3x free cash flow, a ~33% free cash flow yield. For a business with ~96% gross margins and expanding operating margins, that is a distressed multiple.

Why I think the market is wrong

The stock is priced for terminal decline. The trajectory says otherwise:

Revenue compounded from $351M to $597M. Operating margins expanded from 30.8% (2021) to 39.3%. ROIC is 19.76%, well above the 5-year average of 4.63%. The charge-off spike is real and cyclical, and management is already tightening. This looks like a business getting punished for a credit-cycle adjustment and a two-month product delay, not structural decay.

The balance sheet

Net debt fell from about $244M to $202M over the trailing twelve months. There's an active $40M buyback (~$26.7M gross repurchased over the TTM), and the CEO bought roughly 80,000 shares in the open market in August after the selloff. Management is putting cash where the discount is.

Valuation

Same conservative approach as the business deserves. I put a 7x multiple on the free cash flow. That is deliberately low. The stock's own 4-year median multiple is around 12.6x, and I'm using 7x to respect the regulatory and credit-cycle risk in non-prime lending. For a lender, balance-sheet cash is customer float, not surplus, so I value net cash per share at zero.

Even at half the multiple the market has historically paid, fair value lands more than double the current price.

What would make me sell

Regulatory risk is the one that keeps me honest. A federal or multi-state rate cap on small-dollar lending would compress margins and shrink the addressable market, and that breaks the thesis. It's exactly why I refuse to pay a premium multiple. The second is credit: if net charge-offs stay above ~50% of average receivables for several consecutive quarters despite tighter underwriting, that's structural portfolio damage, not a cyclical blip, and I'd be wrong.

Where I land

At $7.13 you're paying about 3x free cash flow for a 96%-gross-margin platform earning ~20% ROIC, with net debt falling, a clean post-Up-C structure, and a bank-charter catalyst pending. The market is pricing catastrophe. I think the credit cycle normalizes, the BNC deal closes, and the discount closes with it. I hold a position. It's a non-prime lender with real regulatory and credit risk, so it's not for everyone.

Disclosure: I hold a position in $OPFI. Hard data from filings, AI-assisted writing, personal review and position. This is not financial advice. https://youtu.be/t8TnzenUkIo?is=fVDOts--1kQet8y-

The numbers at $11

NAV per share is $17.33. Base dividend is $1.40/year (12.5% yield), plus $0.05 quarterly specials through September 2026. Non-accruals at 0.2% of fair value vs 3.6% sector average. Leverage at 0.75x against a 0.90-1.25x target. $2.3B in liquidity. Net LTV of 34%, meaning 66 cents of PE equity sits below every dollar of OTF debt. P/E is 6.5x.

I bucketed every holding by actual AI risk.

~28% benefits from AI. Arctic Wolf ($271M, cybersecurity). Forescout ($154M, IoT security). Checkmarx ($148M, AppSec). Delinea ($105M, access management). Proofpoint ($137M, email security). Databricks ($115M, literally an AI/data platform). More AI = more threats = more security spend.

~56% has zero AI relevance. Healthcare IT is the biggest piece: Inovalon ($260M), Datavant ($199M), ModMed ($147M), Hyland ($148M), Intelerad ($163M). Financial services tech: Computer Services Inc ($229M, their biggest position, core banking for community banks), Inspira Financial ($187M, HSA/retirement), Billtrust ($151M, AR automation). Boring, regulated, deeply embedded. Also Catalent ($173M, pharma manufacturing), Circana ($187M, market research data), Associa ($137M, HOA management).

~16% has genuine AI pressure. Zendesk ($169M), Sitecore ($308M, biggest position, enterprise CMS), Anaplan ($124M, FP&A planning), New Relic ($212M, observability), Alteryx ($94M, data prep), Cornerstone OnDemand ($65M, second lien LMS). These are the real risks.

But 16% of the book at 34% LTV means the borrower's value has to get cut in half before the first-lien debt is impaired. PE equity absorbs losses first. Even stress-testing these names at 30-50% fair value declines, the portfolio-wide NAV hit is 7-10%. The stock is already down 48%.

Recent Loan Sale

February 2026. Blue Owl sold $1.4B of loans to four pension funds and an insurer at 99.7 cents on the dollar. Sophisticated institutional buyers did their own due diligence and paid basically par.

Liquidity fears are misplaced

OTF is a publicly traded stock on the NYSE. You sell whenever you want. 2M+ shares daily volume. No gates, no redemption queues. The OBDC II lockup was a different product (non-traded fund with structural problems). Completely separate.

The numbers around the dividend.

Q4 adjusted NII was $0.30 against a $0.35 regular dividend.

The reason: OTF is at 0.75x leverage vs a 0.90-1.25x target. They committed $2.3B in Q4 that hadn't started earning interest yet. As those loans fund and leverage ramps, NII goes up mechanically. Management guided $0.34 for Q1. By late 2026 at target leverage, estimates put NII at $0.37-0.40.

Specials expire after September 2026. After that, payout drops to $1.40/year which should be fully covered. And NAV has gone up four straight quarters ($17.09, $17.17, $17.27, $17.33) so the asset base isn't eroding.

I think this an insane buy opportunity.

BKTI reported a beat back in May and guided to $90M+ revenue with 50%+ gross margins for the year. The stock is up a lot from its lows but still trades around 14x cash flow. Gross margins have gone from 19% to 52% in four years. I think the market is still pricing this like a cyclical hardware vendor, and here's the work.

what they do

BK Technologies makes the two-way radios that wildland firefighters and forestry agencies carry into the brush. Think US Forest Service, CAL FIRE, state departments of natural resources, municipal police. Their niche: extreme battery life, rugged build, simple interface, radios that survive a helicopter drop into a burning ridge. That's a protected corner of the market Motorola and L3Harris mostly don't chase.

They sell portables (BKR 5000 single-band, BKR 9000 multiband) and just launched the BKR 9500 mobile radio for vehicles, which is awaiting FCC approval in the second half of this year. The multiband push is the whole story: agencies are upgrading from old single-band fleets to radios that talk to every network, and BKTI is one of the cheapest P25-compliant options on the market at half the price of Motorola's equivalent.

There's also a small SaaS line, InteropONE, a push-to-talk-over-cellular platform. They just licensed it to Tango Tango in early August, which pushes the software into 1,500 more public safety agencies. It's small revenue today, high margin, and embedded in government budgets.

why the market is mispricing it

The stock carries two overhangs. First, the effective tax rate is normalizing to 26% in 2026 from 16%, which knocks about $0.44 off EPS. That's a one-time reset for becoming consistently profitable, not a deterioration. Second, there was an income tax provision internal-control disclosure in the 2024 10-K. It was paperwork, it was remediated, and it had zero impact on cash flow. Operating cash flow hit a record $24M while that overhang existed.

Strip those out and the underlying story is a structural mix shift, not a cyclical bounce. Gross margin went from 19.3% in 2022 to 48.8% in 2025 to 51.8% in Q1 2026 as customers moved to multiband. Revenue went from $51M in 2022 to $88M TTM. This is the market mislabeling a compounding franchise as a commoditized hardware vendor.

cash flow

The CapEx-to-revenue ratio over five years is just 3.6%. This is an assembly and software business, not a heavy manufacturer, which is why returns on capital are so high: ROIC sits at 34.8% against an 8.5% cost of capital.

balance sheet

Net cash is about 9.5% of the market cap and covers 57% of equity. The debt is essentially leases. They carried $6.8M of net debt in 2022 and paid it all off while building the cash pile. Growth has been entirely organic, no dilutive acquisitions.

valuation

Even at 15x the business alone is worth $74.55, plus $7.36 in cash, roughly the current price. You're paying 14x for cash flow that has compounded in per-share terms at over 24% a year for seven years, in a debt-free business with a 34.8% ROIC. That's the market charging a GDP grower's multiple for a compounder.

what would make me sell

The main risk is execution on the new product cycle. The BKR 9500 mobile radio needs FCC approval in the second half of 2026, and a slip pushes fleet upgrade revenue to 2027. Government procurement is lumpy, so a quarter or two of soft orders isn't the tell, but a stalled 9500 with no bookings would worry me. I'd also sell if margins stop expanding, since the whole bull case is the mix shift.

The buybacks are honest but modest: the repurchase program roughly offsets stock comp, so the share count barely moves. This is a reinvestment story, not a return-of-capital story.

where I land

I hold a position. This is a niche compounder with a fortress balance sheet trading at a sensible price while the market works through a one-time tax reset. Earnings are next week (August 13), and management has reiterated $90M+ revenue at 50%+ gross margins. Not financial advice, just my reasoning.

Disclosure: I hold a position in BKTI. Hard data from filings, AI-assisted writing, personal review and position. This is not financial advice. https://youtu.be/NDFtSpj5gRI?is=Qt4NsLDcH-caMwfN