8/21/24 - $cxm - More interesting at $9 but still non obvious8/21/24 :: VROCKSTAR :: NYSE:CXM
More interesting at $9 but still non obvious
- stayed away ahead of last results for the right reasons (go search/ read that one), a lot of our biz is simply avoiding problems. most co's will underperform the index. always helpful to keep this in mind.
- CEO transition always tough. in a bit of a transitional phase.
- still a tough mkt for these sub $5 bn B2B software types
- but do have a pretty significant cash pile 600 mm and debt of 50 mm so net cash is great. they also don't burn. subtract that from the 2.4 bn of mcap and you're sub 2 bn... about 1.85 bn enterprise value to be more precise
- so 2-2.5x EV to sales (doesn't matter if it's '24 or '25 bc the numbers are single digit growth... not amazing, that's the rub)
- gross profit seems to be stalling out in the ST with higher opex. so that flex that we noted last Q isn't necessarily going to continue "guaranteed" in the 2Q... 2H of this year... not great for a setup.
- and lastly, since the dumpity doo da aug 2 to aug 5 japanese chopstick sui extravaganza carry me out on a stretcher sell off... the stock is actually a rare example among the B2B software's not to be catching a bid. this is what i caught my eye. but being the skeptical person i am... this also worries me that there's less reason to get excited into this print and especially bc it's not for another 14 days (2 weeks).
- does anyone use or have familiarity with this software. if it's a good solution I think it's a possible take out for 2H esp as there's more visibility for the end market. but the anemic growth and the not obvious cash gen still have me probably side lined all else equal vs. the opportunity cost of other stuff I like ( NASDAQ:NXT is my top position by a long shot rn at $40).
- help! what do we do here? perhaps if we get a mkt dump and this goes with it, the setup is more obvious. 10 days to cover is a pretty highly shorted name which also could improve the setup if we leg lower.
opinions welcome always!
V
