TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

Meta Platforms (Facebook) / Equity Bottom-Up

<ul>
<li>Meta now trades at 14x P/E and 6x fwd EV/EBITDA...valuation inline with Paramount and Warner Brothers Discovery. This is nuts!</li>
<li>While the drumbeat of competitive concerns and self inflicted wounds has piled up in the past month, even core Facebook is not in a death spiral of engagement.</li>
<li>META is investing in new ad tech and ad formats, and has the ability to cut significant opex from its budget that could yield 10-20% upside to current 2023 consensus.</li>
</ul>


Meta now trades at 14x P/E and 6x fwd EV/EBITDA...valuation inline with Paramount and Warner Brothers Discovery. This is nuts!
While the drumbeat of competitive concerns and self inflicted wounds has piled up in the past month, even core Facebook is not in a death spiral of engagement.
META is investing in new ad tech and ad formats, and has the ability to cut significant opex from its budget that could yield 10-20% upside to current 2023 consensus.


What Are the Prospects for a Meta Rebound?

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Comcast’s strong financial performance off-late has been driven by a combination of Sky, NBCUniversal, and cable delivering solid growth.</li><li>At NBCUniversal, a particularly good recovery in the theme parks business has powered the growth in this quarter.</li><li>In this report, we have carried out a fundamental analysis of the historical financial statements of the company.</li></ul>

Comcast’s strong financial performance off-late has been driven by a combination of Sky, NBCUniversal, and cable delivering solid growth.At NBCUniversal, a particularly good recovery in the theme parks business has powered the growth in this quarter.In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Comcast Corp: JV With Charter & Other Developments

<ul>
<li>Intel warned that conditions outlined in 1Q22 have worsened, key to see what AMD says tomorrow.</li>
<li>Netflix - Roku rumor doesn't make much sense, we think its more likely Roku cut off insider selling because it is looking to acquire Starz.</li>
<li>Netflix churn is rising among longtime customers - going to ad-supported Peacock and Paramount. We think another guide down is coming in 2Q22.</li>
</ul>


Intel warned that conditions outlined in 1Q22 have worsened, key to see what AMD says tomorrow.
Netflix - Roku rumor doesn't make much sense, we think its more likely Roku cut off insider selling because it is looking to acquire Starz.
Netflix churn is rising among longtime customers - going to ad-supported Peacock and Paramount. We think another guide down is coming in 2Q22.


Equity Capital Markets

Comcast Corp Class A / Equity Capital Markets

<ul><li>Comcast had a decent quarter with revenues being driven well by their cable division which continues to be a standout performer delivering more than 7% growth in revenue.</li><li>For the last decade, the small business has led to the growth of the company, but it is significantly penetrated the enterprise and mid-market segments.</li><li>The Xfinity Mobile also delivered a solid growth in the last quarter.</li></ul>

Comcast had a decent quarter with revenues being driven well by their cable division which continues to be a standout performer delivering more than 7% growth in revenue.For the last decade, the small business has led to the growth of the company, but it is significantly penetrated the enterprise and mid-market segments.The Xfinity Mobile also delivered a solid growth in the last quarter.

Comcast Corp.: Cable Network & Peacock Upside

<ul>
<li>Netflix management came off as unprepared for its current circumstances. Ramping competition and TAM saturation have been known for 2 years.</li>
<li>Competitive responses sounded half baked: increasing price to deter password sharing and launching advertising tiers...in 2 years?</li>
<li>The viability of the longterm growth algorithm and 10 year DCFs that Netflix investors have leaned on for years has been rightfully vaporized. </li>
</ul>


Netflix management came off as unprepared for its current circumstances. Ramping competition and TAM saturation have been known for 2 years.
Competitive responses sounded half baked: increasing price to deter password sharing and launching advertising tiers...in 2 years?
The viability of the longterm growth algorithm and 10 year DCFs that Netflix investors have leaned on for years has been rightfully vaporized. 


United States

Sirius XM Holdings Inc. broadcasts various channels of audio from its satellites. The Company provides its services throughout the continental United States for a monthly subscription fee. Sirius delivers various streams of commercial-free music in every genre, as well as streams of  news, sports, weather, talk, comedy, and public radio.

News Corporation operates in the publishing industry. The Company provides publications consisting of newspapers, magazines, books and promotional inserts.

Live Nation Entertainment, Inc. produces live concerts and sells tickets to those events over the Internet. The Company also offers ticketing services for leading arenas, stadiums, professional sports franchises and leagues, college sports teams, performing arts venues, museums and theaters.

The Walt Disney Company is an entertainment company that conducts operations in media networks, studio entertainment, theme parks and resorts, consumer products, and interactive media. The Company produces motion pictures, television programs, and musical recordings, as well as books and magazines.

Omnicom Group Inc. provides advertising, marketing and corporate communications services. The Company's agencies, which operate in major markets around the world, provide a comprehensive range of services including traditional media advertising; customer relationship management ("CRM"); public relations; and specialty communications.

Liberty Media Corp-Liberty Braves operates as a media company. The Company offers media, communications, and entertainment businesses. Liberty Media Corp-Liberty Braves conducts business in the United States.

Madison Square Garden Sports Corp. is a professional sports company that owns and operates sports franchises.

Madison Square Garden Sports Corp. (MSGS US)

The New York Times Company operates media businesses.  The Company publishes daily newspapers and operates Internet websites.  The newspapers and websites distribute news and entertainment.

The Interpublic Group of Companies, Inc. is an organization of advertising agencies and marketing service companies.  The Company operates globally in the sectors of advertising, independent media buying, direct marketing, healthcare communications, interactive consulting services, marketing research, promotions, experiential marketing, public relations, and sports marketing.

Liberty Global plc owns interests in broadband, distribution, and content companies operating outside the continental United States, principally in Europe, Asia, and Latin America.

REA Group Limited provides online property listings, web development and internet related technology services to the real estate industry along with providing advertising services to Australian companies.  The Company also offers online real estate search services to the Australian public.

Publicis Groupe SA offers advertising services.  The Company develops advertising campaigns and sells advertising on billboards and urban furniture, in newspapers and magazines, on radio, and in movie theaters.  Publicis offers direct marketing, customer relationship marketing, sales promotion, public relations and human resources services, and operates retail drugstores.

Informa PLC provides business information on a worldwide basis.  The Company provides information in the finance and insurance, maritime transport and trade, law and tax, telecom and media, commodities and energy, and biomedical and pharmaceutical global markets.  Informa provides its information through newspapers, magazines, electronic media, books, and journals.

Pearson plc provides education products and services to institutions, governments and individual learners in over 80 countries. The Company's major revenue markets are North America, 'Core' including the UK, Italy and Australia and 'Growth' including Brazil, China and South Africa. It also owns the Financial Times, 50% of the Economist and 47% of Penguin Random House.

TOHO CO., LTD. produces and distributes motion pictures for cinema, television, and video.  The Company also sells character merchandise based on their media productions, distributes foreign films, operates musical theaters, and produces musical shows. In addition, Toho manages movie theaters in urban areas.

DENTSU INC. mainly provides comprehensive advertising services.  The Company also provides marketing and event planning & promotion services.  Dentsu has associated companies in the US, Europe, and Asia.

TOKYO BROADCASTING SYSTEM HOLDINGS, INC. is a media company that broadcasts television and radio programs nationally.  The Company offers a variety of TV programs & film production, visual & music software production, and cable television programming.  Tokyo Broadcasting System provides digital satellite broadcasting services and also operates real estate business.

Compagnie du Cambodge is an investment holding company that invests in companies active in agriculture, industry, real estate and finance.  The Company owns and operates plantations in Malaysia and forests in Cameroon.

JC Decaux SA offers advertising services.  The Company sells advertising on street furniture such as bus shelters, free standing panels, columns, and automatic toilets, billboards, and posters on buses, trains, and subways, and at railroad stations and airports.

CTS Eventim AG & Co. KGaA produces, sells, brokers and distributes entry tickets for concerts, theater productions, artistic, sporting and similar events. The Company operates an online booking system that allows event promoters to sell their tickets over a variety of distribution channels. CTS also sells tickets directly over the Internet and a call center and offers system support services.

Comcast Corporation provides media and television broadcasting services. The Company offers video streaming, television programming, high-speed internet, cable television, and communication services. Comcast serves customers worldwide.

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Comcast Corp Class A (CMCSA US)

What Are the Prospects for a Meta Rebound?

Meta has seen its valuation converge with structurally impaired cable network / streamers with margins 50% lower. We think it can boost EPS through...

Aaron Gabin

Comcast Corp: JV With Charter & Other Developments

Comcast’s strong financial performance off-late has been driven by a combination of Sky, NBCUniversal, and cable delivering solid growth. At...

Baptista Research

TMT Quick Hits: INTC/AMD, NFLX/ROKU

Intel's overly bullish 2H guidance from last quarter is already getting talked down. Netflix-Roku rumor is unlikely...and only thing that could...

Aaron Gabin

Comcast Corp.: Cable Network & Peacock Upside

Comcast had a decent quarter with revenues being driven well by their cable division which continues to be a standout performer delivering more...

Baptista Research

Netflix 1Q22: Willfull Ignorance

Netflix management seemed unprepared for its current circumstances. Ramping competition and TAM saturation have been known for 2 years. Competitive...

Aaron Gabin

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