You do not need to know much about the companies product, but it’s how the business is doing that matters. I finally get that, but not these numbers. Certainly the business is growing at a great pace but how long can it keep doing business with the numbers that I gleaned from Saul’s take.
Guidance for fiscal year
• Total revenue of $ $162 million for growth of 46%
• Adj. operating loss of $54 million
• Adj. net loss per share of 56 cents, assuming 99 million shares
• Billings of $196 million representing for growth of 44%
• Net free cash flow of negative $25 million
Where is the money to operate coming from?
It might help to let us know what company you are looking at, unless its a test and I just failed.
But I’m going to assume money to operate doesn’t come from revenue for this company (IPO, diluting shares, or debt). Theres a whole lot of ways to operate, and some of the companies this board follows don’t have positive earnings, but still have high valuations. I think it drives Strelna a little nuts (sorry if I am incorrect Strelna).
The irony is that this board used to only discuss companies with little debt and positive earnings, combined with a growth ratio (PYEG) that was under 1. But the market changes, and so does Saul. It’s a beautiful thing to see first hand.
Only a little nuts Robert! I I do fully accept the premise and invest on it. The premise is that recurring-revenue software companies, growing for years at rates (eg 40%+) never consistently seen before in the market, do not take many years to squash the very high PS ratio they may be trading on. Five mins. with a calculator neatly and simply demonstrates it.
I just draw a sharp distinction between such companies and others (they are sometimes, but rarely, the same) which may have lesser growth but also have the full line-up of figures, cash and ROIC being features, and a history of them.