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.

Equity Capital Markets

<ul><li>Roku is witnessing a slow period as a significant slowdown is seen in TV advertising spending because of the macroeconomic environment that is pressuring the platform business growth of Roku in the short term.</li><li>However, the active accounts of the company and the TV advertising market share of the company continue to increase.</li><li>Roku remains differentiated by its unique assets, proprietary Roku TV OS, innovative advertisement platform for connected TV, and The Roku Channel.</li></ul>

Roku is witnessing a slow period as a significant slowdown is seen in TV advertising spending because of the macroeconomic environment that is pressuring the platform business growth of Roku in the short term.However, the active accounts of the company and the TV advertising market share of the company continue to increase.Roku remains differentiated by its unique assets, proprietary Roku TV OS, innovative advertisement platform for connected TV, and The Roku Channel.

Roku Inc: The Buzz & Other System Enhancements

Equity Bottom-Up

<ul>
<li>This is our first report on streaming major, Roku.</li>
<li>The company had a strong first quarter of 2022 with Platform revenue up 39% yearly, driven by increased content distribution and advertising revenue.</li>
<li>As one of the industry's top platforms for streaming TV, the company anticipates long-term growth in active users and platform revenue.</li>
</ul>


This is our first report on streaming major, Roku.
The company had a strong first quarter of 2022 with Platform revenue up 39% yearly, driven by increased content distribution and advertising revenue.
As one of the industry's top platforms for streaming TV, the company anticipates long-term growth in active users and platform revenue.


Roku Inc.: Initiation of Coverage – Business Strategy

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.

<ul>
<li>Tesla is a short. We know. You can't short it. But it is a short.</li>
<li>We continue to look for businesses that overearned and pulled in growth during the pandemic...some more recently identified examples: CHWY, ROKU</li>
<li>Spotify remains one of our top short ideas, bad business model, and now increasing competition from alternative listening services. </li>
</ul>


Tesla is a short. We know. You can't short it. But it is a short.
We continue to look for businesses that overearned and pulled in growth during the pandemic...some more recently identified examples: CHWY, ROKU
Spotify remains one of our top short ideas, bad business model, and now increasing competition from alternative listening services. 


<ul>
<li>DoubleVerify is a provider of advertising solutions to businesses that helps with ad verification, fraud prevention, and brand safety.</li>
<li>Profitable business model and reasonable valuation (12x forward sales) for its growth/margin profile that ranks well on the Rule of 40 metric.</li>
<li>Recent acquisition of OpenSlate looks synergistic as it expands DV's prebid offerings.</li>
</ul>


DoubleVerify is a provider of advertising solutions to businesses that helps with ad verification, fraud prevention, and brand safety.
Profitable business model and reasonable valuation (12x forward sales) for its growth/margin profile that ranks well on the Rule of 40 metric.
Recent acquisition of OpenSlate looks synergistic as it expands DV's prebid offerings.


<p>We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, but have turned bullish for the simple fact that Netflix’s stock performance tracks the pace of sub growth, and we see growth reaccelerating in the back half of 2021. The kicker for us is the potential for gaming to be leveraged as an ARPU lever…and an upward estimate revision cycle. We may be early….but the stock’s flattish AH reaction on a pretty mediocre quarter and weak guide reads bullish to us.  </p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, but have turned bullish for the simple fact that Netflix’s stock performance tracks the pace of sub growth, and we see growth reaccelerating in the back half of 2021. The kicker for us is the potential for gaming to be leveraged as an ARPU lever…and an upward estimate revision cycle. We may be early….but the stock’s flattish AH reaction on a pretty mediocre quarter and weak guide reads bullish to us.  Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

United States

Endeavor Group Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, offers entertainment content, as well as specializes in marketing and licensing, representation, and event management. Endeavor Group Holdings serves customers worldwide.

Lions Gate Entertainment Corporation develops and distributes film entertainment contents. The Company produces motion pictures, television programming, animation, and digital media. Lions Gate Entertainment serves customers worldwide.

AMC Entertainment Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides theatrical exhibition, movie screening, food distribution, online ticket booking, and other related services. AMC Entertainment offers movie theaters worldwide.

World Wrestling Entertainment, Inc. operates as a media and entertainment company. The Company offers live wrestling events, television programming, music publishing, advertising, licensing, and home video streaming services. World Wrestling distributes its programs worldwide in various languages.

Match Group, Inc. is a dating service provider. The Company offers diverse portfolio of apps and services which enables connections across the spectrum of age, race, gender, sexual orientation, and backgrounds. Match Group serves customers worldwide.

LiveOne, Inc. operates as a digital media company. The Company provides live music streaming platform that delivers digital music experiences streamed live through audio and on-demand from the world's top music festivals and concerts. LiveOne also helps users to have access to songs and various stations.

IAC Inc operates as a holding company. The Company, through its subsidiaries, provides media and Internet services. IAC serves customers worldwide.

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

Magnite, Inc. provides online advertising solutions. The Company offers real-time cloud and big data computing systems. Magnite serves customers worldwide.

John Wiley & Sons, Inc. publishes print and electronic products. The Company specializes in scientific, technical, and medical books and journals, as well as professional and consumer books and subscription services. Wiley also provides textbooks and educational materials.

HYBE Co., Ltd. operates as an entertainment company. The Company provides music production, album distribution, entertainers management, publicity, planning, training, and other services. HYBE also makes television shows.

37 Interactive Entertainment Network Technology Group Co.,Ltd designs, develops, and operates mobile games and web games. The Company also provides game promotion, customer service, top-up payment, and other services. 37 Interactive Entertainment Network Technology Group conducts its businesses in China.

37 Interactive Entertainment N (002555 CH)

Kunlun Tech Co., Ltd. offers comprehensive Internet value-added services. The Company focuses on social network interactive and online game fields. Kunlun Tech also provides localized translation outsourcing and agency advertising services.

Bilibili Inc. provides online entertainment services. The Company offers a platform that covers a wide array of genres and media formats, including videos, live broadcasting, mobile games, animation, and comics. Bilibili serves customers in China.

China Ruyi Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on online streaming video and internet community businesses. China Ruyi Holdings also manufactures and sells photographic, electronic, and multimedia accessories.

Netmarble Corporation develops and publishes mobile games. The Company develops and publishes casual games, action, sports games, strategy, simulation games, and social casino games. Netmarble offers services worldwide.

Pearl Abyss Corp. operates as a computer games making company. The Company offers games development, games exporting, and other services. Pearl Abyss serves customers worldwide.

Saregama India Limited manufactures, sells and deals in Audio Cassettes, CD's and DVDs, which they market in India, Europe, the USA, Canada, the Caribbean Islands and South Africa. The Group's range of music encompasses both new and old Hindi films, regional films, ghazals, classical, Indipop and International. Saregama also has a film business, which produces films and TV serials.

Kakao Games Corp. operates as a multiply platform gaming company. The Company provides mobile games, computer games, virtual reality games, and other related products. Kakao Games markets its products worldwide.

Zhejiang Huace Film & TV Co., Ltd. specializes in entertainment media production. The Company's products include Mandarin films, TV programs and advertisements.

Zhejiang Huace Film & Televisi (300133 CH)

Roku, Inc. designs and manufactures consumer electronic products. The Company offers wireless enabled devices that stream audio and video content from the internet to home entertainment systems. Roku serves customers globally.

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Roku (ROKU US)

Roku Inc: The Buzz & Other System Enhancements

Roku is witnessing a slow period as a significant slowdown is seen in TV advertising spending because of the macroeconomic environment that is...

Baptista Research

Roku Inc.: Initiation of Coverage – Business Strategy

This is our first report on streaming major, Roku. The company had a strong first quarter of 2022 with Platform revenue up 39% yearly, driven by...

Baptista Research

1H22 Obex Research Short Portfolio

Our top short ideas for 2022: Tesla, Roku, Palantir, Spotify, Doordash, Expensify, AMC, and Teradata. Continue to like pandemic related...

Aaron Gabin

Recent IPO Insights: DoubleVerify

DoubleVerify is a provider of advertising solutions to businesses that helps with ad verification, fraud prevention, and brand safety. Fast growing...

Aaron Gabin

Netflix 2Q21: Game On

We have turned bullish on Netflix recently because we see the pace of sub growth reaccelerating in the back half of 2021. The flattish AH reaction...

Aaron Gabin

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