TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

I have over 20 years’ experience investing in the TMT and Consumer sectors, almost entirely on the buyside. Started at Bernstein covering software in 2001, moved to the buyside at Government of Singapore Investment Corporation (GIC) in 2003, covering hardware, software, and media. 

After getting an MBA at NYU in 2008 and a CFA, I spent 8 years at Coburn Ventures (a market neutral TMT/Consumer hedge fund). In 2015, I joined Deimos Asset Management, a low net multi-strat, where I managed a  TMT/Consumer portfolio.

I've spent the past few years at Obex Capital Management providing independent investment research to TMT and Consumer investors.

TMT & Consumer Independent Equity Research Analyst

TMT Megacap Earnings Observations: Google & Microsoft

Match 2Q21 Earnings: Still Waiting on the Resurgence

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

<p>The 2Q21 guidance is overly conservative…growth inline with 1Q21 despite a far easier comp (500bps revenue growth decel…17% comp in Q1 vs. 12% in Q2) and an EBITDA guidance calling for a 300bps EBITDA margin contraction…which seems massively unlikely given all the ARPU supportive commentary. Management is being cautious to set a low bar given the huge disruptions currently in India, Latin America , and Japan, its key global growth markets. Keep the eye on the ball… Match is still driven by the biggest US urban centers…and these markets are reopening fastest. We’ve said the past two quarters that Match is rarity in midcap internet properties – a wildly profitable platform quasi-monopolist which trades for a rightfully high EBITDA multiple and offers few entry points – much like Adobe in software. The fact that the company’s EV/EBITDA multiple is lower today (36x) then it was 6 months ago (42x) and we are 6 months closer to not just a normalization, but likely massive acceleration in the business means Match is really much cheaper than it appears and investors have a great entry point.</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>

The 2Q21 guidance is overly conservative…growth inline with 1Q21 despite a far easier comp (500bps revenue growth decel…17% comp in Q1 vs. 12% in Q2) and an EBITDA guidance calling for a 300bps EBITDA margin contraction…which seems massively unlikely given all the ARPU supportive commentary. Management is being cautious to set a low bar given the huge disruptions currently in India, Latin America , and Japan, its key global growth markets. Keep the eye on the ball… Match is still driven by the biggest US urban centers…and these markets are reopening fastest. We’ve said the past two quarters that Match is rarity in midcap internet properties – a wildly profitable platform quasi-monopolist which trades for a rightfully high EBITDA multiple and offers few entry points – much like Adobe in software. The fact that the company’s EV/EBITDA multiple is lower today (36x) then it was 6 months ago (42x) and we are 6 months closer to not just a normalization, but likely massive acceleration in the business means Match is really much cheaper than it appears and investors have a great entry point.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.

Match 1Q21 Earnings: Looking for an Opening

Match Group

Match 1Q21 Earnings: Looking for an Opening