In today’s briefing:
- What Really Happened to Tesla’s Latest Ex-CFO?
- Seeking Shelter in Gold on Rising Geopolitical Risks
- S&P 500, Nasdaq 100 Back at Support; Downgrading Discretionary to Market, Materials to Underweight
- Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance
What Really Happened to Tesla’s Latest Ex-CFO?
- Tesla’s Q3 10-Q reveals CFO Zach Kirkhorn was suddenly out because he was fired.
- The company also made Kirkhorn reveal any whistleblower efforts he pursued—and then declare Tesla broke no laws. Tesla threatened “legal action” if he talks to the press.
- Is Tesla setting up its ex-CFO to take a fall?
Seeking Shelter in Gold on Rising Geopolitical Risks
- Rising geopolitical tensions have driven gold prices 9% higher over the last 2 weeks. Risk of escalation provides further upside to gold prices.
- Gold is trading at a key psychological price level of $2,000/oz with a bullish momentum. Previous rallies were rejected from the price level of $2,100/oz.
- Consumption is expected to rise in India and China due to higher seasonal consumption in India and fading domestic premium in China. But, higher prices remain a drag.
S&P 500, Nasdaq 100 Back at Support; Downgrading Discretionary to Market, Materials to Underweight
- Equities not yet out of the woods, but as long as SPX is above 4165-4200, most signs point to this being a normal pullback within the ongoing bullish SPX trend.
- Similarly, the Nasdaq 100 (QQQ) is testing support at $350-$355 (the 4-month bull flag/falling wedge pattern). The Russell 2000 is also approaching 1+ year support at 1640.
- Breakdowns would be our cue to get defensive, as it would likely lead to precipitous declines. However, if supports hold, this is where risk/reward is skewed in favor of buyers.
Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance
- Waystar Holding will be valued like other unprofitable healthcare IT unicorns on a multiple of forward revenue. I used EV/Revenue valuation methodology and FY23 EV/Revenue multiples to value the Waystar.
- In 2019, CPPIB and EQT acquired a majority stake in Waystar, valuing the company at $2.7B, which implies an EV/FY23E revenue multiple of ~ 6x, including a debt of ~$2.3B.
- My ~$3.6B IPO valuation contemplates a ~5x EV/Revenue on my FY23E revenue of $795M and is supported by my analysis of healthcare IT comps.
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