In November, some companies covered by Long-Term Pick (updated page) released their quarterly earnings reports. It's time to update their valuations and review the latest reports. Some explanations regarding screenshots with fair price estimates:
I marked cells that I updated as grey (after the latest earning reports)
Fair-to-Current Price and Current Price/Fair Price: green - undervalued, blue - fairly valued, yellow - overvalued
Some Future EPS Growth marked as green means that the projected earnings growth is even higher; 20% is my maximum
Additionally, I included updated current valuations alongside their 5-year averages for easy comparison. I also added average future price estimates from other analysts to compare with my Base Fair Price Estimates.
Adjusted EBITDA: $242 million with a margin of 27%, up approximately 280 basis points year-over-year.
Monthly Active Users (MAUs): 537 million, growing 11% year-over-year.
US and Canada Revenue: $719 million, growing 16% year-over-year.
Europe Revenue: $137 million, growing 20% year-over-year.
Rest of World Revenue: $42 million, growing 38% on a reported basis or 45% on a constant currency basis.
Ad Impressions Growth: 41% year-over-year.
Ad Pricing Decline: 17% year-over-year.
Cash, Cash Equivalents, and Marketable Securities: $2.4 billion.
Share Repurchases: $466 million in Q3, $500 million year-to-date.
Q4 2024 Revenue Guidance: $1.125 billion to $1.145 billion, representing 15% to 17% growth year-over-year.
Q4 Non-GAAP Operating Expenses Guidance: $495 million to $510 million, growing 11% to 14% year-over-year.
👍 Positive Points
Reported a record high of 537 million monthly active users in Q3 2024, reflecting an 11% year-over-year growth.
Achieved an 18% year-over-year revenue growth in Q3 2024, driven by strong performance in lower funnel revenue.
Has successfully integrated AI into its platform, enhancing user engagement and ad relevance, leading to a 300 basis point improvement in actionable engagement.
Has expanded its third-party demand partnerships, including an extension of its relationship with Amazon Ads in Canada and Mexico.
Launched Performance+, an AI-driven advertising tool that simplifies campaign creation and improves cost per action by 10% on average.
👎 Negative Points
The food and beverage subsector of CPG continues to experience softness, impacting overall growth.
Despite strong revenue growth, ad pricing declined by 17% year-over-year due to a mix shift from international markets.
The adoption of new features like Performance+ is still in the early stages, with advertisers limiting budget shifts during the holiday peak period.
Faces macroeconomic headwinds, particularly in the food and beverage category, which affects revenue growth.
Still in the early days of its international expansion efforts, which may take time to significantly impact revenue.
Reported a 19% year-over-year increase in gross profit, reaching $2.25 billion, with significant growth in both the Square and Cash App segments.
Achieved its highest quarterly profitability ever, with improvements in adjusted operating income and adjusted EBITDA.
Raised its full-year 2024 guidance for adjusted operating income and adjusted EBITDA, indicating strong financial performance.
Seeing strong momentum in Cash App, with improved attach rates on paycheck deposits and other financial products.
Investing in growth opportunities, particularly in go-to-market strategies, to drive further expansion in 2025.
👎 Negative Points
There are discrete items impacting gross profit growth, such as delays in transaction cost benefits and expansion of Cash App Borrow, which are now expected to materialize in 2025.
Faces regulatory uncertainties in the fintech and banking sectors, which could impact its operations and growth strategies.
Experiencing moderated growth in monthly active users for Cash App, with expectations to end the year at around 57 million, indicating challenges in user acquisition.
Making deliberate trade-offs in new active growth to focus on engagement and platform health, which may impact short-term user growth metrics.
Still in the early stages of rolling out new products like Afterpay on Cash App Card, indicating potential delays in realizing full benefits from these initiatives.
Organic Revenue Growth: 6% overall, with 7% in CAG Diagnostic recurring revenues and 13% in the water business.
EPS: $2.80 per share, up 11% as reported and 12% on a comparable basis.
Gross Margin: 61.1%, an increase of 140 basis points on a comparable basis.
Operating Margin: 31.2%, up 110 basis points year on year as reported.
Free Cash Flow: $192 million in Q3.
Net Income to Free Cash Flow Conversion Ratio: 91% on a trailing 12-month basis.
Capital Allocation: $225 million in share repurchases, supporting a 1.1% reduction in diluted shares outstanding.
Updated Full-Year Organic Revenue Growth Outlook: 5.3% to 6%.
Updated Full-Year EPS Outlook: $10.37 to $10.53 per share.
Global Premium Instrument Placements: 4,128 units in Q3, a decrease of approximately 10% compared to prior levels.
Orders for New IDEXX inVue Analyzer: 691 orders secured in North America.
👍 Positive Points
Reported a solid 6% organic revenue growth in Q3 2024, driven by 7% growth in CAG Diagnostic recurring revenues and 13% growth in the water business.
Achieved strong profit performance with an EPS of $2.80 per share, up 11% as reported and 12% on a comparable basis.
Secured nearly 700 orders for its new inVue analyzer, indicating strong market interest and potential future revenue growth.
Maintained high customer retention rates of over 97% and achieved double-digit growth in its premium instrument install base.
International CAG Diagnostic recurring revenue grew by 10% organically, supported by strong new business gains and high premium instrument placements.
👎 Negative Points
CAG Diagnostic recurring revenue growth in the US was constrained by near-term macroeconomic pressures and sector headwinds, leading to a reduction in full-year organic revenue growth guidance.
Experienced a 2% organic decline in Livestock, Poultry, and Dairy (LPD) revenues, impacted by lower Asia swine testing and herd health screening revenues.
Reference lab revenue growth was modest, affected by price realization impacts from major new customer agreements.
US clinical visit growth declined by 2.1%, with a higher 3.4% decline in discretionary wellness visits, impacting diagnostic revenue growth.
Faced challenges from severe weather events, which negatively impacted Q4 revenue growth expectations.
