In today’s briefing:
- Grab Follows Suit with GoTo and Accelerates Profitability Timeline
- AMT/Cellnex: Lower Chances of a Bid
- Zee Entertainment- Litigations Scare
- Nvidia: Don’t Let Narratives Fool You (Again)
- Tencent Short Cover Target
- Airbnb Inc.: Major Drivers
- Gartner Inc.: Major Drivers
Grab Follows Suit with GoTo and Accelerates Profitability Timeline
- Grab reported 4Q2022 results yesterday. Q4 revenue more than quadrupled to $502m (vs consensus $403.48) while reported a negative adjusted EBITDA of $111m (vs consensus $137m) vs $305m in 4Q2021.
- Deliveries business went on to report positive adjusted EBITDA driven by improvement in take rate coupled with reduction in total incentives.
- Grab Holdings (GRAB US) share price dropped 8.29% at the end of yesterday’s trade despite the company accelerating its profit timeline to breakeven in 4Q2023 vs 2H2024 previously.
AMT/Cellnex: Lower Chances of a Bid
- American Tower stated during FY 2022 results presentation that debt reduction is its main priority. The probability of a takeover bid for Cellnex by American Tower and Brookfield is reduced.
- Cellnex on 14.7x EV/NTM EBITDAe is trading cheaply vs. AMT on 19.5x and below private equity deals at 25-30x. I believe that Cellnex’s fundamentals are solid, and would be long.
- Cellnex is the undisputed European leader in telecommunications towers with both high cash flow visibility (growth forecasted at 18% for the period 2021-2025e) and trading at 7.3% 22e FCF yield.
Zee Entertainment- Litigations Scare
- Zee Entertainment Enterprises (Z IN) have yet again been bombarded with a corporate hurdle since the NCLT has admitted the company into CIRP relating to Siti Cable Network (SITINET IN).
- It is found that ZEEL has created provisions in the balance sheet, however it should be noted that the CRIP might lead to cash outflow in future.
- Apart from the current CIRP, ZEEL also has other litigation risks that should not be overlooked.
Nvidia: Don’t Let Narratives Fool You (Again)
- Nvidia’s risk-reward profile remains unattractive, according to the company’s recent earnings report.
- Nvidia’s stock-based compensation also highlights some problems related to inventory levels and the amount of stock- based compensation.
- The company’s share price has risen 14% following recent earnings, the report says.
Tencent Short Cover Target
- Tencent faced formidable resistance at 385 where old lows and old highs coincided and was our short level outlined on January 17.
- 300 is our base line downside target. March will be a bearish month. Buy zone at sub-300.
- Macro is constructive if 270 holds. Current decline is labeled a deep correction of the October to late January rally.
Airbnb Inc.: Major Drivers
- Airbnb had a solid year in 2022 with revenues growing 40% year-over-year.
- Moreover, they saw that guest bookings for trips continued to rise, maintaining a robust backlog for Q1.
- Excluding all of the Mainland China listings, the team increased supply by 900,000 listings, or 16%, in comparison to a year ago.
Gartner Inc.: Major Drivers
- Gartner drove a strong performance with double-digit growth in contract value, revenue, EBITDA and EPS.
- Its research business continues to be its greatest and most lucrative segment, with a 9% year-over-year increase in revenue.
- In addition, they helped 9 of their top 10 countries experience double-digit growth, with the tenth experiencing high single-digit growth.
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