Hi Saul, want to say thanks for everything. I’ve learned a lot and really appreciate your work and sharing of knowledge. And same to everyone else too
I had a question about adj numbers. The question I guess is … do you ever compare Adj to GAAP numbers to see the discrepancy? Like if there is a huge difference in adj vs GAAP, does that affect your thoughts? Or do you only look at adj?
Maybe that’s too vague but hope it makes sense. Any thoughts from anyone are appreciated
To illustrate, I’m looking at LVGO. I’ve read the posts here + Bert and a few other places. So to describe my question here are some numbers I pulled from their last report, which was Q3 2019
For Q3 2019 the GAAP vs Adj margins are:
GM: 73.85% vs 74.96%
Op Margin: (45.25%) vs (10.23%)
Net margin: (42.25%) vs (7.22%)
This is a huge jump for Op and Net margins in GAAP vs Adj
But the reason I’m compelled to ask is because the adj numbers improved dramatically yoy. Here’s what they look like
Adjusted margins from Q3 2018 to Q3 2019:
Adj GM improved from 70.97% to 74.96%
Adj Op margin improved from (50.78%) to (10.23%)!
Adj Net margin improved from (48.13%) to (7.22%)!
Just for reference here’s how those Op and Net incomes were calculated:
ADJ OP INCOME
(21,115) - GAAP Op income
15,580 - Stock based comp
696 - Amortization intangibles
11 - Acquistion related
55 - Change in fair value of contingent consideration
(4,773) - Adj op income
ADJ NET INCOME
(19,712) - GAAP net income
15,580 - Stock based comp
696 - Amortization intangibles
11 - Acquistion related
55 - Change in fair value of contingent consideration
(3,370) - Adj net income
So I guess to reframe my question, given that the adj op and net margins improved so dramatically yoy, does it trouble you that there is a huge discrepancy in adj vs GAAP in the last quarter?
AND SOME OTHER NOTES FOR FUN:
- Revenue growth from Q3 18 to Q3 19 was 18,782 to 46,658. An increase of 148%
- 2.5 bil market cap company
- P/S is approx 18
- didn’t see in their report, but Bert in his SA article said they have a DBE of 114%
- Looks like only about avg 930 shares traded daily