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SNAP, another fast growth quarter
Target price USD90.8
Last 12-month cashflow -USD 227 million
February 7th,, 2021
1 minute read
Sales
Sales had another very strong quarter, rising by +34% to reach USD 911 million after +49% in the third quarter. That’s 17% above our forecast. The average quarterly growth is now at +16%! We expect growth to average +6% a quarter in this next 12 months & sales to rise to USD 1.13 billion by the fourth quarter of 2021.
Cashflow
Free cashflow was at -USD 69 million in the fourth quarter after -USD 70 million in the third quarter as working capital is still very negative. The quarterly average is -USD 57. Using the latest investment spending USD 16 million, combined with higher sales gives a positive average quarterly free cashflow of USD 127 million in this next 12 months.
1 minute read
Sales
Sales had another very strong quarter, rising by +34% to reach USD 911 million after +49% in the third quarter. That’s 17% above our forecast. The average quarterly growth is now at +16%! We expect growth to average +6% a quarter in this next 12 months & sales to rise to USD 1.13 billion by the fourth quarter of 2021.
Cashflow
Free cashflow was at -USD 69 million in the fourth quarter after -USD 70 million in the third quarter as working capital is still very negative. The quarterly average is -USD 57. Using the latest investment spending USD 16 million, combined with higher sales gives a positive average quarterly free cashflow of USD 127 million in this next 12 months.
Another strong growth quarter, forecasting positive free cashflow, a higher target price...
Balance sheet
With negative free cashflow, the balance sheet net leverage of cash minus total liabilities was at -USD 2.15 billion in the fourth quarter from -USD 1.8 billion in the third quarter & -USD 1.2 billion a year ago. With our forecast positive cashflow & assuming no dividend payout, the net cash will be -USD 1.64 billion in 12 months time.
Profit
The fourth quarter net loss improved to -USD 113 million from -USD 200 million in the third quarter. The cash cost ratio of net profit add non cash costs minus sales as a percent of sales improved to 85% from 93%. We use the same 85% costs to predict a lower next 12 months net loss of -USD 423 million.
Value
SNAP has raised a net capital of USD 5.5 billion in the last five years. At the current market value of USD 93.5 billion, it’s a high 24X sales, 7.2X assets, 49X equity with no profitability or yield as yet. Our cashflow forecast is USD 610 million. At 1.6% with a 3.5X adjustment gives a higher target price, USD 90.8.
With negative free cashflow, the balance sheet net leverage of cash minus total liabilities was at -USD 2.15 billion in the fourth quarter from -USD 1.8 billion in the third quarter & -USD 1.2 billion a year ago. With our forecast positive cashflow & assuming no dividend payout, the net cash will be -USD 1.64 billion in 12 months time.
Profit
The fourth quarter net loss improved to -USD 113 million from -USD 200 million in the third quarter. The cash cost ratio of net profit add non cash costs minus sales as a percent of sales improved to 85% from 93%. We use the same 85% costs to predict a lower next 12 months net loss of -USD 423 million.
Value
SNAP has raised a net capital of USD 5.5 billion in the last five years. At the current market value of USD 93.5 billion, it’s a high 24X sales, 7.2X assets, 49X equity with no profitability or yield as yet. Our cashflow forecast is USD 610 million. At 1.6% with a 3.5X adjustment gives a higher target price, USD 90.8.