My thoughts on MBLY

I hate to be a wet blanket, and the company is obviously growing like mad, but…their market cap at the end of today was $9,360 million. Their net adjusted earnings and their free cash flow for the quarter were both about $10 million. So their price was 936 times the quarterly earnings (I haven’t looked back for trailing 12 month earnings, but let’s be generous and give them $30 million. That gives them a trailing adjusted PE of over 300).

Their total revenue for the quarter was $37 million. That’s 1/250th… yes 1/250th, of their market cap. That’s Revenue, folks. Yahoo gives them a trailing 12 month Price to Revenue of 82. That means if the had turned ALL their revenue to profit, all of it, they’d have a PE of 82. Their PEG ratio (expected) is 3.9(!!!). Their 12 month forward(!) PE is given as over 113.

Now if you feel comfortable putting your money in a froth like this, it’s your business, but you could get faster growth in SWKS or SKX, for instance, with PE’s of under or about 20 and forward PE’s of way under 20.

Just saying…

Saul

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Saul,

Thanks again for “Just saying…” and the education on what other factors to be aware of and the way to make honest bare bones assessments of companies most prime for investment.

KLVanLiew

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Hi Saul,

I wish I had seen this post before … I wouldn’t then write the long post that I wrote on the earlier thread. Darn!

An aside. I think it’s interesting to compare MBLY & AMBA … there are some parallels here except that one is selling for 9x sales another for some 65x sales.
http://discussion.fool.com/hi-vanliew-progress-is-great-have-sma…

Anirban

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I wish I had seen this post before … I wouldn’t then write the long post that I wrote on the earlier thread. Darn!..An aside. I think it’s interesting to compare MBLY & AMBA … there are some parallels here except that one is selling for 9x sales another for some 65x sales.

Hi Anirban, Glad you wrote that long post. It reinforced what I wrote, and the comparison with AMBA gives a reality check. Especially since 9x sales for AMBA is pretty expensive itself, which points out how wild 65 x sales is.

Saul

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