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SNAP, cashflow turning positive
Current, target price USD57, 62 (+10%)
May 21st, 2021
1 minute read
Sales, down seasonally
Cashflow, about to turn positive
1 minute read
Sales, down seasonally
- Sales declined seasonally by -15% in the first quarter to 770 million dollars, which is -5% compared to our forecast.
- This is after a 34% increase in the fourth quarter & brings the quarterly average growth to 17%.
- We predict average growth of 5% a quarter in this next 12 months which will bring sales to 903 million dollars by the first quarter of 2022.
Cashflow, about to turn positive
- Cashflow was positive 126 million dollars in the first quarter after negative -69 million dollars in the fourth quarter.
- Average quarterly cashflow is now a smaller negative -24 million dollars.
- We use flat investment spending of -11 million dollars, which with higher sales, gives a positive average quarterly cashflow of 130 million dollars in this next 12 months.
Sales & margins lower seasonally, but cashflow is getting close to turning positive & we forecast it will, very expansive though with a lot of capital to pay back, flat target price...
Balance sheet, still Hugh leverage
Profit, margins down
Value, expensive
- The net leverage of cash minus total liabilities was -2,385 million dollars in the first quarter from -2,148 million dollars in the fourth quarter & -873 million dollars a year ago.
- With our forecast higher cashflow & assuming there’s no equity payout...
- ...the net leverage will be -1,866 million dollars in 12 months time.
Profit, margins down
- The net loss was higher at -287 million dollars in the first quarter from -113 million dollars in the fourth quarter as...
- ...the cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was up to -105%.
- We use lower -85% costs, to predict a lower next 12 months loss of -417 million dollars.
Value, expensive
- SNAP cumulative net capital is at -5,030 million dollars from the last five years.
- At the current market value of 88,420 million dollars, based on forecasts it’s 23.46X sales, 20.29X assets, 68.61 equity, with no profitability or yield yet.
- Our free cashflow forecast is 519 million dollars. At 1.6% with a generous 3X adjustment, gives a 10% higher target price of 62 dollars.
