Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

<ul>
<li>ARLO reporting better than expected third quarter results would rely on paid subscriber additions remaining on their current trajectory</li>
<li>The pause in ARLO’s stock price creates greater upside potential as ARLO demonstrates its ability to generate positive earnings and free cash flow with each passing quarter</li>
<li>ARLO has released a new line up of Essential cameras. ARLO had previously indicated it would update its Essentials cameras this year ahead of the holidays</li>
</ul>


ARLO reporting better than expected third quarter results would rely on paid subscriber additions remaining on their current trajectory
The pause in ARLO’s stock price creates greater upside potential as ARLO demonstrates its ability to generate positive earnings and free cash flow with each passing quarter
ARLO has released a new line up of Essential cameras. ARLO had previously indicated it would update its Essentials cameras this year ahead of the holidays


<ul>
<li>ARLO reported another quarter of net subscriber adds above expectations and putting the Company on a faster pace to achieve 3 million paying subscribers</li>
<li>At the end of the June quarter, ARLO had annualized recurring revenue of approximately $200 million even though hardware revenue has remained at levels not seen in two years</li>
<li>The recurring revenue model gave ARLO the ability to generate free cash flow in the Q2. This inflection point should solidify ARLO’s valuation on a recurring revenue basis</li>
</ul>


ARLO reported another quarter of net subscriber adds above expectations and putting the Company on a faster pace to achieve 3 million paying subscribers
At the end of the June quarter, ARLO had annualized recurring revenue of approximately $200 million even though hardware revenue has remained at levels not seen in two years
The recurring revenue model gave ARLO the ability to generate free cash flow in the Q2. This inflection point should solidify ARLO’s valuation on a recurring revenue basis


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Thematic (Sector/Industry)

<ul><li>Energy- Rotation to Laggards or Something More Brewing?</li><li>The worst S&amp;P 500 sector so far in 2023 has been energy which is down almost 8% getting trounced by the technology and communication services sectors.</li><li>Inflation readings have benefited so far by energy “staying in the box” in 2023 versus the wild price spikes to $5/gallon gasoline and above which occurred last spring.</li></ul>

Energy- Rotation to Laggards or Something More Brewing?The worst S&amp;P 500 sector so far in 2023 has been energy which is down almost 8% getting trounced by the technology and communication services sectors.Inflation readings have benefited so far by energy “staying in the box” in 2023 versus the wild price spikes to $5/gallon gasoline and above which occurred last spring.

<ul>
<li>ARLO reported a non-GAAP profit in the first quarter of 2023 after the Company implemented a price increase on its subscription plan</li>
<li>ARLO added 182 thousand paid subscribers in the quarter and ended the first quarter with more than 2 million paying subscribers</li>
<li>Service revenue has allowed for greater operating leverage with gross margin expected to rise further in future quarter with the growth in service revenue</li>
</ul>


ARLO reported a non-GAAP profit in the first quarter of 2023 after the Company implemented a price increase on its subscription plan
ARLO added 182 thousand paid subscribers in the quarter and ended the first quarter with more than 2 million paying subscribers
Service revenue has allowed for greater operating leverage with gross margin expected to rise further in future quarter with the growth in service revenue


ARLO: Recurring Revenue Growth, PT to $11

<ul>
<li>ARLO initiated a new marketing strategy based on price and it seems consumers have responded well in an otherwise tough market backdrop.</li>
<li>The sell through led to ARLO growing the number of paid subscribers more than we were expecting, and on pace to surpass 2 million paid subscribers in first quarter 2023</li>
<li>The revenue achieved in the fourth quarter was approximately $3 million higher than the top end of the guidance range ARLO had previously provided</li>
</ul>


ARLO initiated a new marketing strategy based on price and it seems consumers have responded well in an otherwise tough market backdrop.
The sell through led to ARLO growing the number of paid subscribers more than we were expecting, and on pace to surpass 2 million paid subscribers in first quarter 2023
The revenue achieved in the fourth quarter was approximately $3 million higher than the top end of the guidance range ARLO had previously provided


United States

Arlo Technologies, Inc. provides software solutions. The Company offers cloud-based platform with a variety of connected devices such as security cameras. Arlo Technologies serves customers in the United States.

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Weekly Stock Bullfinder - Week of 7/10

The worst S&P 500 sector so far in 2023 has been energy which is down almost 8% getting trounced by the technology and communication services sectors.

Weekly Stock Bull Finder

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ARLO: Profitability Back in View

ARLO is now focused on winning customers at the point of sale through lower prices and it is evident the strategy worked in the fourth quarter....

BWS Financial Inc

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