FCF

Party_Shoe104

1) Number 3 (staying away from biotech) is the top lesson here. Biotechs are highly risky because they have nothing to fall back on (generating revenue/producing FCF, or have a huge stockpile of cash) if their drug does not pass all 3 trials. 2) If for some odd reason you get lured into a biotech, the next line of defense (protecting your cash / minimizing loss) is position sizing. Instead of selling 130 contracts, you should have sold 26 - 30 contracts. In my opinion, it is way better to tell a story where you said "I should have bought way more" than feeling the pit in your stomach from experiencing a $6200 loss. 3) Only sell CSPs on quality stocks (ones that have quality fundamentals)....the ones you WANT to own, not the ones you HOPE can give you a quick financial gain. 4) Speculation/hope is more of a gamble than it is a successful, long-term strategy (where probabilities are in your favor.) Always look for the small to medium-sized wins where the probabilities are in your favor. The silver lining is that now....you have a tax loss event to balance the many small wins you will get from now until December.

Worldly_Marketing665

LDI is basically trading on momentum + sentiment right now. CEO/insider selling looks scary but it’s mostly pre-set and small compared to float. Bigger risks are dilution (shelf/ESOP) and the macro… subprime + tightening credit is rough. If origination volume/FCF improve, upside’s there, but one miss and this retraces fast. Not a dumpster fire, but definitely still a high-risk turnaround play

valuevestor1

I use the website stockanalysis.com. For me the screening starts with ROIC, PE ratio and P/FCF. I try to invest in companies that maintain consistent P/FCF. After something catches my eyes, I read their latest annual report and quarterly report. Then try to make a prediction about the business based on macroeconomics and competitors. Then go all in on that company. I invest in the small caps. Because I invest only in Canadian stocks, my current investments are Pulse Seismic(PSD.TO) and Renoworks(RW.V). Beyond that I'm very optimistic about three other stocks HME.V, HMM.A.TO and DRX.TO. However I didn't allocate anything as I don't have any more capital and I feel at the current price of PSD, this one is a better investment than the other three.

Kachowxboxdad

I think it would make it easier for companies to invest for growth so their stock doesn’t eat shit because FCF dropped

IWantToRetir3Now

My main issue is their dividend doesn't seem sustainable without revenue increasing. I don't know who thought it was a good idea in 2022 to increase it by 50% (which was approx. a 5x increase over previous years). Sure 22 was a good year but +50% is crazy. The payout ratio from fcf is 90%+ I know that management has said the dividend is a hallmark / priority but their margins are already stressed. Assuming they hit 2025 guidance they have 7.5B FCF that leaves a 4% cushion meaning any negative surprise could force them into a corner. We are also going into a holiday season that is forecast to be growing slower yoy with most of the growth coming from inflation / higher unit prices vs quantity (of packages) increasing. All that plus the 4 million de minimis shipments per day turning into likely sub 1 million per day will keep me waiting to see how the next earnings call or two play out. Best of luck to any who do enter and long term I'm fairly confident that it'll pay off.

Bespoke-Esoteric-123

Well obviously - the problem is just getting the right growth assumptions. DCFs are garbage in, garbage out.  Also, specfin names like SOFI aren’t really valued on a DCF the same way FCF-driven stocks are. 

phosphate554

It’s not truly trading at 20x earnings. As a shareholder, (down a lot) and someone who’s been following this company for years, it’s actually trading at 5x FCF. If FCF or Net Income falls 25% (ouch), it’s trading at a little over 6x earnings. It’s dirt cheap, maybe for good reason. If growth continues, the stock should soar.

MitchCurry

[Here's](https://www.reddit.com/r/stocks/comments/1nbo9o7/comment/nd38s73/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) a comment I posted 4 days ago: StubHub looking to IPO at a range of $22-$25/sh, with the high end of that range giving them a MC just over $9B. Revenue in 2024 rose 23% to $1.77B while 2023 was up 24%. Operating loss in 2022 of $217MM swung to operating profits of $253MM and $138MM in 2023 and 2024, respectively. That balance sheet though... yikes. $2.7B in goodwill terrifies me. Also, $2.85B in debt against $1B in cash and cash equivalents and they're paying 9.1% on the USD loans and 7.9% on the EUR loans. Their interest expense in 2022 was $120MM which rose to $156MM in 2023 and then to $180MM in 2024. At least they're healthily FCF positive with $557MM over the past 2 years but an economic slowdown in the near future and I could see that debt tightening around their throat. Also slightly concerning is the US, which is 90% of their revenue fees in 2024, dropped from 25% growth in 2023 to 17% growth in 2024. That was partly offset by $40MM in ROW revenue growth and an $86MM jump ($3MM in 2023 to $89MM in 2024) in controlled ticket revenue but that jump seems one-off with that segment appearing to be lumpy. So a slowing(?) primary market, a lot of debt at high interest rates, a large amount of goodwill that could become a large impairment, and possible regulation of the ticket market also. It's a pass for me. Don't know if this is a yellow flag or no flag but that goodwill came from Eric Baker, who founded StubHub and was fired in 2004 after clashing with his co-founder, started Viagogo in 2006, and then purchased StubHub from eBay and re-branded Viagogo as StubHub.

OverwroughtPraise

The crux of my argument is that the market priced in a very high probability of all $455B in RPOs coming to fruition on time, when those are just contracts with exit/early termination clauses, not revenue guarantees. If OpenAI shows red flags, it won't be the typical tech startup red flags. I'm not concerned about negative FCF either. I'm concerned that they are attempting to raise an unprecedented level of capital for this project and offloading a lot of the execution risk to Oracle, who is already doing a victory lap as if the money is on the books.

Jeff__Skilling

Why are you making the argument that SoftBank controls OpenAI's ability to raise capital? [OpenAI seems to have had no trouble raising incremental equity on their own](https://techcrunch.com/2025/08/01/openai-reportedly-raises-8-3b-at-300b-valuation/) Also -- why are we acting like OpenAI is some overhyped, pre-revenue ShitCo? Sure, they're private so we don't have audited financials or much insight to what their margins or operating cash flow looks like, but [they've hit $1bn / month in revenue](https://www.reuters.com/business/openai-hits-12-billion-annualized-revenue-information-reports-2025-07-31/), and they woudln't have such an easy time raising cheap capital if they were in a perpetual state of negative FCF or having major net working capital problems or some other major redflag associated with tech startups that have a cool idea but have absolutely no clue how to turn that idea into a self-sustaining business that can consistently generate organic free cash flow period-over-period.

SuperRedHulk1

With how hot the IPO market is right now and how corrupt our administration is, I’d say it’s more likely than ever. At a rumored valuation of $500B, they’d have cash hand over fist to whatever they wanted with. Also, by 2029 also by Sam’s admission, they plan to bring in $125B. The scale of that is immense. If they can convert even 1% of that into FCF, they can afford to start paying off chunks of that obligation

Glock7enteen

Tesla has rapidly declining sales, shrinking margins and dropping FCF btw. But yeah let’s pump it back to all time highs. Clown market

fLukeozade

There's no single answer, it really depends on the maturity level of the company. P/E is fine for a mature company, but for one still in growth mode, you might get more nuance from P/GP or P/FCF. For the earliest stage companies, you can really only use P/S. Where I can, I'll use Mauboussin's Reverse DCF approach. It's a decent shorthand sense check.

nilgiri

In the long term, this is the way. Look at the FCF and DCF but man, in the short term it really looks like it's what the AI narratives around the company is and how many times the CEO brings up AI deals during their conf calls.

LiberalAspergers

I decided it was still a bit overvalued at 250, and sold puts at 220. So, Im pocketing my premium and moving on. Not touching this as these prices, dont see a plausible route for them to generate the FCF to jusitify these prices, and I dont do "greater fool" theory.

wattap

“$ORCL has $11B in cash, $105B in debt, generates $20B in cash from operations and is now FCF negative. How is this all going to work exactly? ORCL has to buy the chips, take on more debt, while OpenAI has $10B in revenue but will spend $60B/yr in CapEx for five years. What?” Oracle market cap increased 230bn on this news

RandyTomfoolery

🐂 Bull Case for Adobe (ADBE) Current price: ~$350 Market cap: ~$158B Free cash flow (LTM): ~$9.4B (~42% margin) --- Why Be Bullish? Recurring Revenue Machine – ~96% subscription-based, highly predictable cash flows. Cash Cow – ~$9.4B in free cash flow (41% margin). Plenty of ammo for buybacks, R&D, AI, and M&A. AI Upside – Firefly, Acrobat AI Assistant, Express integrations = potential multi-billion ARR opportunity. Could justify price hikes & upsells. High Switching Costs – Creative professionals & enterprises are sticky. Hard to rip out Adobe from workflows. Valuation Reset – Stock has pulled back, leaving room for re-rating if growth re-accelerates. Balance Sheet Strength – Low net debt, steady buybacks, optionality to acquire AI players. --- What They Can Do With FCF 🔬 Reinvest in AI (Firefly, document cloud, AI agents). 📈 Sales & Marketing expansion for global growth. 💸 Buybacks (EPS boost, capital return). 🛒 M&A (bolt-on AI/creative tech acquisitions). 🛡️ Debt paydown / buffer for downturns. --- Numbers to Watch Revenue FY25 guidance: $23.5–23.6B Adj. EPS FY25 guidance: $20.50–20.70 FCF margin: ~41% --- Scenarios Base Case (9% growth): 3 yrs rev ~$29B; stock +30–50% 5 yrs rev ~$36–38B; stock +60–80% Bull Case (10–12% growth, AI monetization): 3 yrs rev ~$30–32B; stock +50–70% 5 yrs rev ~$42–44B; stock could double Aggressive AI Upside (12–15% growth, higher margins): FCF $20B+ in 5 yrs → stock potentially 2–3× TL;DR Adobe is a cash-rich, high-margin subscription machine with massive free cash flow and sticky customers. If AI monetization works, it could re-accelerate growth and drive the stock 50–100%+ higher in 3–5 years.

FindingZen4

I also bought early, with my first purchase at $380. Then the next couple of days it went straight down. Doubled my position on 5/15 then continued selling puts through 7/29 and getting assigned, bringing my cost basis way down. I was in the red by around $75k on 8/1 but held with diamond hands, because I know this is a money printing machine of a company. Wait until next year. This thing will print so much FCF in 1Q26 and the stock will go up to at least $400. I learned this lesson Meta unfortunately. I panic sold around the bottom at $90/share on 11/4/22, and it was the same thing--a money printing machine, and I knew it. And the stock went up >7x after that. It's painful to talk about, but I learned a lesson.

bursuq

Well, I don't think investors should necessarily be given this "multi year backlog". We have no idea what are the clauses in those contracts. A lot will happen until FY2030.I don't remember any large company giving guidance 4 yrs in advance. It's very unorthodox and reminds me of the SPAC craze. Historically they haven't scaled as fast as AWS/Azure/GCP. What guarantees they'll now grow \~100% every year? Plus the most important question is profitability. They guide for +77% IaaS revenue in FY2026. Well, they are already +55% in Q1 2026 yet EPS is down YoY. FCF also down : -5.8 bln vs +11.2 bln one year ago.

Phil-OSOPHY

22% increase in Revenue, modest...tomatoes/tomotoes. As collectible business continues to grow the 60% figure will only go down and down, but who cares, they are now making money just from operations and they have 8.7 billion (possible another 1.9 billion from warrants given out free to retail), and you have a company that keeps stacking cash, investing into T-bills, making more money and waiting for opportunities to expand into diff omni-channels. Do any FCF valuation you want and GME is undervalued with a unique opportunity.

I_Own_A_Fedora_AMA

What are your FCF assumptions? Time frame? Discount rate?

JRshoe1997

Imo this is the biggest issue with the stock for me right now. In 2024 they had about 6.2 billion in FCF and paid a 5.4 billion dividend. That doesn’t leave a lot of wiggle room especially considering income and operating cash flow have been falling since 2022. They either need to cut the dividend or start finding a way to grow earnings again.

Jayhwk1978

OPEN… compared to zillow revenue and FCF…should be 5-10x higher 🔥

Jayhwk1978

OPEN 5 bill rev FCF 10x 🔥

MitchCurry

StubHub looking to IPO at a range of $22-$25/sh, with the high end of that range giving them a MC just over $9B. Revenue in 2024 rose 23% to $1.77B while 2023 was up 24%. Operating loss in 2022 of $217MM swung to operating profits of $253MM and $138MM in 2023 and 2024, respectively. That balance sheet though... yikes. $2.7B in goodwill terrifies me. Also, $2.85B in debt against $1B in cash and cash equivalents and they're paying 9.1% on the USD loans and 7.9% on the EUR loans. Their interest expect in 2022 was $120MM which rose to $156MM in 2023 and then to $180MM in 2024. At least they're heathily FCF positive with $557MM over the past 2 years but an economic slowdown in the near future and I could see that debt tightening around their throat. Also slightly concerning is the US, which is 90% of their revenue fees in 2024, dropped from 25% growth in 2023 to 17% growth in 2024. That was partly offset by $40MM in ROW revenue growth and an $86MM jump ($3MM in 2023 to $89MM in 2024) in controlled ticket revenue but that jump seems one-off with that segment appearing to be lumpy. So a slowing primary market, a lot of debt at high interest rates, a large amount of goodwill that could become a large impairment, and possible regulation of the ticket market also. It's a pass for me. Don't know if this is a yellow flag or no flag but that goodwill came from Eric Baker, who founded StubHub and was fired in 2004 after clashing with his co-founder, started Viagogo in 2006, and then purchased StubHub from eBay and re-branded Viagogo as StubHub.

Ok_Neat9473

Q1: rev $217M (+3% beat), EPS $0.15 vs $0.12 est (+25%), TPV +53%, FCF +200%. Q2: rev $256.5M (+11% beat), EPS $0.14 vs $0.13 est, TPV $9.2B (+53%), FCF +156%.

Petit_Nicolas1964

The margins are way higher for tobacco companies than for the beverage industry. MO and BTI have FCF margins of around 35%, STZ a bit more than 10%. Tobacco companies have incredible pricing power and still can compensate declining sales volumes by pricing.

Global_Tear_4153

Borealis (BOGO) Checks the Boxes Borealis Mining Company Limited (TSXV: BOGO) (FSE: L4B0) (OTC Pink: BORMF) (the "Company" or "Borealis") I don’t chase drill hype. I look at the full picture: can a junior actually build and run a mine, and will it make money at today’s gold prices? Borealis stands out. Jurisdiction & Permits • In Nevada, top-tier mining district. • Borealis Mine is already permitted and producing gold. • Water permits secured → a big hurdle many juniors struggle with. • Sandman: oxide heap-leach with very low capex (~US$31.5M) and already aligned with Borealis’ ADR plant. Execution & Management • Crusher running since June 2025, gold pours started → speed of execution is obvious. • Management team with real track records. Strong endorsements from long-term names like Sprott, McEwen, Buchan. • Presenting at Beaver Creek 2025, showing they’re serious about institutional visibility. • Fast, clear communication — my own emails got quick, professional replies. That builds trust. Financing & Dilution • Yes, there are warrants (notably the Sept 2025 $0.75s). But many are held by Sprott, who is seen as a long-term holder. • Unlike most juniors, Borealis is producing now and Sandman has ultra-fast payback. • At record gold prices, payback could be less than six months → making self-funding growth realistic, instead of endless dilution. Project Economics (Sandman PEA 2023) • After-tax IRR: 81% at $1,800 gold. • Payback: 1.3 years at $1,800 gold. • At $2,500 gold → ~US$56M annual free cash flow. • At $3,500 gold → ~US$100M+ annual free cash flow from Sandman alone. • Add Borealis mine restart (~US$24M FCF at $3,500 gold). Combined → ~US$124M per year. Valuation • Current market cap ~C$91M (~US$67M). • At $2,500–$3,500 gold, Borealis could generate 1–2× its market cap in free cash flow every year. • That kind of leverage is very rare in this sector. Bottom Line Borealis isn’t just another story stock. It’s permitted, producing, expanding, backed by credible names, communicating well with shareholders, and showing speed of execution. With high gold prices, payback on Sandman could be under six months, setting up a genuine self-funding growth story. That’s why I see Borealis as one of the rare juniors that ticks nearly every box. Quality always wins.

PayingOffBidenFamily

Broadcom is a beast, bought 2900 shares earlier this year and it blipped over $1m for a little while yesterday. Solid growth, FCF, EPS, while Nvidia is the ai processor king they are also a 4 trillion dollar company. The likelihood nvidia doubles to 8 trillion in the next 5 years seems less than probable, the law of large numbers is staring them in the face and broadcom with it's fingers in every ai pie has a runway to 3 trillion sooner than nvidia does to 8 trillion in the next few years.

Kredit-Carma

Good call OP. Declining revenues. Flat vehicle sales. Declining profitability. Increasing shares outstanding. 40% SBC. 177x FWD PE. 0.3% FCF Yield. 6% profit margins. BUT, Elon said they will be worth $6T and he will create humanoid robots and eventually have a (driverless) robotaxi network ... maybe, once they get the tech figured out. What could go wrong?

Chiefrhoads

While I agree 97.32% is a very high payout ratio, it is worth pointing out that is based on FCF, and if you believe what UPS is reporting and projecting that they are increasing FCF after adjusting their business this means the payout ratio will shrink along with it. I see a a couple years of smaller dividend raises, but I do also see a pop in the stock over the next couple of years which will make this timeframe seem like an outstanding opportunity to buy. If the stock even just holds steady (dividend and stock price) you would be looking at a net increase of just above 6.5% APY. Assuming you reinvest dividends and your return will be well above 7% net APY which is not bad at all. I think they will continue to increase the dividend so they can stay on track for dividend aristocrat status and anticipate my yield on cost in 5 years to about 10%. I am a buyer at today's prices and will try to load up with free cash flow before the stock pops.

Jeff__Skilling

I'm with you here -- whats the incentive to buy a controlling stake? STZ seems to consistently be generating positive OCF and FCF per quarter + they pay a steady dividend. I could see BRK increasing their stake -- especially since it looks like management just revised forward guidance downward and their share price should take a hit -- but I don't really see any sense in BRK breaking either the 20% ownership threshold or the 50% threshold (especially since at that point BRK would have to fully consolidate, including STZ's ~$11bn in LTD)

MitchCurry

So does Klarna pull their IPO if the market suddenly starts tanking or do insiders want to sell so badly that Klarna will risk an underpriced offering? Their balance sheet isn't immaculate but it's not like they need the cash. They still run an operating loss but it isn't massive and it's improving, down to $121MM in 2024, They're very FCF positive. My guess is they go forward but wouldn't be shocked to see them shelve it like they did in April.

RiPFrozone

It’s definitely based on fundamentals, but many investors need to understand the companies they are investing in. They see the valuation of Broadcom and get scared because they learned what a PE ratio was a week ago. Those of us who saw the giant opportunity in AI + the giant revenue booster VMware was have been profiting greatly. FCF is growing, revenues are growing, company is firing off on all cylinders. Also helps it’s the #2 AI semiconductor giant by revenue behind Nvidia. These two are going to continue to compound and I can’t wait until inferencing makes up the majority of revenue. Training is just the beginning.

RiPFrozone

I’d listen to the call, 110b backlog 50% of which is semiconductors largely driven by AI expansion. They are well on track to reach FCF projections for 2027.

RiPFrozone

Earnings and profits, Broadcom made 7b in fcf this quarter up 47% yoy. It’s not a cheap stock but it’s on track to go from 30b in fcf to 46b by 2027 or 31.5x FCF. There is a strong case this company trades at 2t valuation in 2 years. Continued operational excellence and it’s gonna keep doing well as both a company and a stock. Any major dip where that FCF multiple is around 20-25 I’m buying very easily. For now I’m holding my position and am very happy with how they have performed in my portfolio.

_hiddenscout

For sure, but good management still trumps a moat anyday. Blockbuster had a moat and died. There are companies with moats that can lose them via poor management. I think it matter pre internet days where moats where stronger, but in the case of Meta, they still have competitors. Meta is just an advertising company with a ton of users. Even with Meta, the stock lost favor and started to fall when Zuck went heavy into the Meta Verse and they saw Capex go up and revenue slow. That's the thing with investing, you can totally define what you like and what you look for. I think moat's are cool, but I think looking for companies with good management, increasing margins and FCF will be much better indicator than just a moat.

thelastsubject123

so SBC is just not an expense these days? cause its not deducted from FCF

BasketRepulsive9347

Their FCF is better than GAAP earnings. Earnings = bullshit. FCF is what matters and the FCF multiple is less than 20x today

Jayhwk1978

OPEN 5 bill rev…FCF 10x 🔥

ClandestineGK

DOCU might be the win...zero debt, FCF of almost $1B and $1.2B in cash. If corporations are reducing travel and expenses their services will be further needed.

MitchCurry

I've started doing some DD and I'm pretty interested in Warby Parker. Accelerating revenue, FCF positive, doesn't dilute via SBC too much, investing heavily in retail presence which, for glasses, makes a lot of sense for obvious reasons. They have essentially no international presence yet (271 US stores, 5 in Canada, that's it). Announced a partnership with Google in May for AI-powered glasses. Current valuation has it at it's all-time P/S and P/GP average but it's trading well above the 3Y averages. Will have to dig more but may be worth a starter position at least. Anyone own/have thoughts?

MutaliskGluon

Read their 10Q and trace their AP AR FCF over time and check it out yourself. Dont forget to bring a red flag when you did this though

Technical_Cry_5878

Here are a few added layers to consider: Legal relief + AI engine: Alphabet just dodged a big antitrust bullet - no forced breakup, no Chrome divestiture, and the stock popped around 8% on the news. This gives them breathing room to keep betting big on AI (Gemini, TPU infrastructure, you name it) and cloud growth. Valuation vs. upside: The stock is trading at a relatively modest forward P/E - around 17–18x, which looks reasonable compared to other tech giants. Given Alphabet’s diversified portfolio spanning Search, YouTube, Cloud, and even Waymo, some analysts argue the upside remains substantial. Capital investment ramp-up: In Q2 2025, Alphabet’s capex surged 70% YoY, some $22B poured into infrastructure and AI support. Free cash flow dipped temporarily, but the trailing 12-month FCF still looks strong, up 10%. This feels like reinvestment in future scale, not a red flag. I’ve also been tracking Andrew Zatlin reviews (from Banyan Hill), and his latest commentary leans into structural resilience. He contrasts headline-grabbing moves with the importance of durable competitive moats - like Alphabet’s AI integration and infrastructure edge. Zatlin suggests companies that consistently reinvest in innovation and defend their core cash cows often outperform in the long run, even when near-term concerns linger.

joe4942

GOOGL has ~3x higher operating margins, less debt, nearly double ROIC. * AMZN P/FCF: 178 * GOOGL P/FCF: 41 Quite different companies.

Consistent_Dingo_530

Looking at FCF Is not cheap anymore.

shakenbake6874

Came here from your most recent post. This thing still trades like a dog. The only thing notable is they trade at a sub 20 P/FCF. They needs a decent earnings report. Will this be the one on 9/4/2025?

SufferingFromEntropy

I've been looking for equities in the JP market especially semi, staffing agency, IT, and entertainment sectors as well as the trading houses Warren Buffett loves. JP companies tend to have way more cash and way less debt than US ones probably due to cultural reasons to the point that they seem very stingy with cash and would rather hoard that cash pile than return it to shareholders. This should be gradually improved in the coming years as Tokyo Exchange is pushing those firms with ridiculously low PB ratio. With the cash pile removed you can really see many companies have high ROIC, so you need to find those with good ROIC and hope that one day that cash pile is returned to shareholders. Semi firms such as Lasertec, Tokyo Electron, and Screen Holdings have strong fundamentals but are suppressed due to recent geopolitical uncertainties, so even tho the AI boom is still there they dont seem to benefit much from it. If semi is cyclical it looks like they are in the trough right now Staffing agency industry is an interesting one because as the whole population declines, companies turn to staffing agency for skilled laborers, advertisement, and digital transformation of hiring process/management. On the other hand the matching platforms and staffing agencies also have to compete with each other for new users/talent so this sector will get more and more competitive. For example Artner deploys IT and mechanical engineers and JAC Recuitment does employment consulting for JP firms all over the globe. Fun fact both Glassdoor and Indeed are owned by Recruit Holdings which is based in Japan IT wise there has been a demand to "digitize" Japanese companies and those that provide softwares or Salesforce service have been benefiting from this trend. Then there is Trend Micro whose top line is basically flat over the years. I still remember buying their antivirus many years ago. And there is NCD that digitalizes Japanese bicycle parking lots. Then the entertainment sector as Japan exports a lot of games and consoles. Nintendo for one I think a lot of folks hold its shares. Some other potentially good ones include Bandai Namco and Sanrio, tho Sanrio just had a good run and the PE is just too high at this point Finally the trading houses - they have business around the globe, which is important for JP firms as their domestic market is doomed to shrink with their population. However they are so huge that they cannot generate much profit from their large load of assets. For many companies when you remove the excess cash their ROIC looks good, but these trading houses has little cash to begin with, so their ROIC is in the lower single digits, which is a big red flag for me. If you are here for their stable cash flow, look for those with PE < 10 and high FCF yield. For example Sumitomo looks good while Marubeni and Itochu look expenseive Tl;dr semis are beaten down, staffing agencies are getting competitive, some are profiting from digital transformation (DX), entertainment firms with global exposure look good, and Sumitomo over other trading houses

Aretardinvestor

I got my data from TradingView, their TTM FCF/S is 3.41, I might've done the calculations wrong idk. Check for yourself what comes out

FatFireCat

Ok, point taken. ValueSense’s “implied FCF growth” is notably lower—17.7% required to justify the current price according to them. That is still high. Thanks for letting me know!

Aretardinvestor

Yes, but it's still under 10% net margins and you're currently paying 57x FCF/share. CLS would have to FCF per share at a 30.7 CAGR for the next 10 years to justify your investment at today's prices. If you think they can CAGR FCF over 30% for more than 10 years, sure, it's undervalued today. I honestly don't think they're even close to making that happen. But hey, that's what makes markets 🤷🏻🤷🏻

carl20172

Thanks for the comment. As far as ongoing lawsuits, that’s a yes and no. There’s a lawsuit against OddsJam involving allegations by Swish Analytics over data republished for commercial gain and they’re seeking $100 million in damages. Why I say no is that the date in which this was filed for, the acquisition by GAMB os OddsJam hadn’t been made. So technically there’s no lawsuits filed directly against GAMB itself. As far as valuations, the lowest of any analyst’s PT is $11. The intrinsic value I’ve got based very conservatively on FCF and EPS is about $30. A YT channel called Victor H Investing also calculated the IV value at $34. I can post YT links here but the title is “Gambling.com is a high Potential Micro Cap Stock”. Also for what it’s worth, nothing I write is AI. Wish there was something to verify this on Reddit as everyone naturally assumes it is now

ZeOs-x-PUNCAKE

“Hey dad, so I was reading NVDA’s 10k this last week and saw a nice uptick in their FCF. Applying this to my DCF analysis, I’ve determined that NVDA is undervalued by the market. Perhaps we shall consider adding this to my portfolio.” -OP’s 5 year old

mdatwood

NVDA would reset, but the FCF being spent has to go somewhere. This isn't like the Dotcom boom where shitty companies were being dumped on the public markets. Big tech is printing money and investing it in AI. NVDA obviously benefits and its valuation will reset if/when big tech shifts away, but it won't suddenly turn off the sectors money volcanos. The only way that happens is a recession which has been right around the corner for years. Google TTM EBITA - 139B Meta TTM EBITA - 95B MS TTM EBITA - 162B AAPL TTM EBITA - 141B After the initial fear, the market probably ends up in a better place with less concentration in NVDA.

FatFireCat

Momentum, PEG, Net Profit Margin Growth, FCF Growth, $ROICTTM > $WACCTTM. I don’t like PE when it comes to growth stocks.

Mean_Bumblebee1945

Fair-value estimate and suggested trading range in one sentence: Based on current fundamental valuations, Webull should be trading closer to about $4 (AlphaSpread) to $8.20 (Simply Wall St) per share well below its current market price of $13.59 suggesting the stock is significantly overvalued. • ⁠AlphaSpread calculates Webull’s intrinsic value at $4.09, indicating the stock is currently ~70% overvalued at its trading price of $13.59.   • ⁠Simply Wall St uses a Discounted Cash Flow (DCF) model to estimate fair value at $8.22, showing the stock is about 65% overvalued.  • ⁠A more detailed 2‑stage Free Cash Flow to Equity model yields a similar valuation of $8.18 per share, implying ~82.9% overvaluation.  If you’re looking for a fair-value benchmark: • ⁠On the conservative side, trading near $4 per share would align with AlphaSpread’s intrinsic valuation. • ⁠A more moderate and arguably realistic target, based on Simply Wall St’s DCF and FCF estimates, is around $8.20 per share. So Webull seems to be trading well above what its fundamentals support, and a “fair” trading level likely lies in the $4–8 range rather than its current $13–14 level. Conclusion: Short BULL - target range 4-8$

PartyReply5150

You need to look at the cash flow and cash on hand for Comcast to understand their debt situation. Comcast has \~$101B of total debt, current and non-current. Only \~$9.7B cash on hand. Their FCF is pretty good for the past 5 years (\~$15B), but a lot of that is going towards share buyback and dividend payment. They aren't aggressively paying down their debt.

lab-gone-wrong

Yeah casually dismissing *negative FCF and Current Liabilities > Current Assets* as "no solvency risk" is not a good look for OP

lab-gone-wrong

>Chegg trades below the price it paid for Busuu alone ($436 million in 2022). At today’s ~$1.40, investors assign zero value to Busuu No, it means they assign positive value to Busuu  but negative value to the core business, which more than offsets it due to the size of the core business and its large negative growth. Also analyzing equity value without bringing up debt, or the fact that the company has virtually 0 FCF and CL > CA, is wild

AssistanceChance5454

The business is still shit. Don’t let the memes and hype fool you. I sold for a big loss as well and watching this is gut wrenching but it doesn’t change the fact that the actual business has shrinking revenues and couldn’t produce FCF if their life depended on it. The life blood for Tilray appears to be new investor money and they are about at the share limit cap… unless they can actually make money a RS is pretty much unavoidable. Tilray has 1.1 billion shares outstanding… I believe their 2026 projected revenue is less than $1 billion.

TheoryInttro

Sales in Europe fell another 40%. They're already running out of free cash flow, closing Dojo was because there was no longer the FCF to keep marketing projects like that alive.

cool_yuwen

So, they get a massive cash injection but FCF is guided down and leverage is going up. This feels more like a government-backend utility than a growth company right now.

mayorolivia

Their FCF is insane and they already spend a ton on R&D. At some point they’ll be like Apple and be able to prop up the stock via buybacks when revenue growth slows down. They’ve authorized $75B in buybacks. In a few years they’ll have $200B+ of FCF each year.

DoobsNDeeps

WEN is for sure the next pump. +10% FCF yields all being paid out or buybacks. You don't even need them to grow for this to be interesting. As soon as rates go back down, a 10% FCF yield will not be sat on regardless of brand interpretation. All we need is for you guys to keep sucking dongs behind the dumpsters and this thing will hit the moon.

xampf2

I'm not talking about P/E. It's not a good metric. I'm referring owner's earnings and EV/FCF. That being said, the cheaper the company with all else being equal, the higher the odds for a good return and the better your downside is protected. There is enough literature out there that confirms this heuristic. Again, I'm just commenting on what I'm seeing. Reminds me a bit of 2021/2022 when the big high multiple stocks such as EV companies (NIO, WKHS, ...), payment platforms (SHOP, PYPL) and weed stocks started collapsing.

DWmain12

There are multiple valuation methods people use. EBITDA/PE/FCF Yield and the list goes on. Can use NTM or NTM+12 etc … but ultimately most valuations are benchmarked against peers in the industry. So for example if you want to value Quanta Services some ways you can look at it is select a valuation method or a combination if you like. Look at its historical NTM FWD EV/EBITDA vs peers. Determine if it deserves a premium and assign accordingly. If you are using a combination you can use 50% EVEBITDA 50%P/E or do triple combination wtv u like. But bottom line it’s a “feel” that’s substantiated using some data most of the time

Mowr

Holy negative declining FCF, Batman!

ImakeBADinvestmentsx

Buying $GOOGL is like buying a ETF that is growing at 13% Revenue across all sectors. 185,000 employees - ready for margin compression 60b FCF after - 75b in buybacks, 80b in investments and other opex costs. INSANE under valued! free money at this point! $265 EOY PRICE TARGET :) NANO BANANA AND GEMINI 3.0 COMING TO COOOOOOOOOOOK OPEN AI AND SCAM ALTMAN

footballman25

Lol, and the guy down the street said it’s $40. Just kidding, those price targets are based on well before the phase 2 news and many recent developments. You can see the FCF analysis, which is what Wall Street analysts focus on among risk adjusted probability of approval. If it’s approved though, they will 50x their price targets overnight.

DWmain12

It would a combination: FCF generation, earnings sustainability, historical payout ratios, performance during periods of downturns, management commentary during earnings call

CanYouPleaseChill

SBC is never accretive. It's an expense, full stop, and should be deducted from FCF in doing any valuation work.

CanYouPleaseChill

Market Cap: 15.2B FCF - SBC: 0.2B P/(FCF - SBC): 77 So a lot of growth is already priced in and in my view, there's no margin of safety. There are so many other stocks out there that are easier buy decisions than this.

Aretardinvestor

But you also have to look at the price you're paying for the company, I have companies in Europe that trade a 9xP/FCF while growing +10% per year... I like to buy GARP and low PE businesses even if they're not the best quality. I've been outperforming the spx for a while now

thelastsubject123

\>With a PE of around 130, and a market cap of 15 billion,  these 2 numbers alone dont really tell the full story 1) 1B in cash so EV is actually $14B 2) because the stock is so expensive, SBC is accretive as it relieves pressure off the core business' balance sheet rule of 40: 37% FCF margin + 27% YoY growth (forward) = 64 score, very impressive full on growth company. it should not be benchmarked against a sp500 company. looking forward, it trades at around 31x FCF (which excludes SBC as an expense) but as the company grows and matures, we can start looking at PE as a ratio

himynameis_

If any company was solely dependent on one person like you suggest, it would have always been doomed. Fact is, their DAUs count continues to grow very fast. And they've been operating for a decade now. DAU growing 39%. 47.7M DAU per latest quarter. Revenue grew 41% YoY in the latest quarter. Of course the growth is slowing but it's still 41%. They have 10.9M paid subscribers. And a 9% paid subscription penetration rate, improving every quarter. Most important of all. They're very FCF positive. And have been positive consistently since Q1 2022. In latest quarter FCF grew 66%. Faster than revenue. The wonderful thing about the business is that it is very capital light. They rely on advertising as their expense. Meaning, they have strong operating leverage. This is very valuable for any business. There aren't many companies with the number of users that Duolingo has. Yes, the PE is high. But the company is also growing very fast. Especially dat FCF which will grow faster than the revenue. Also. You may say you don't like the app. But I'd be careful solely relying on anecdotal evidence given that, their paid subscribers and DAU has continued to grow very fast for a long while now. Despite the AI boom with chatgpt. Despite COVID. Despite interest rates cutting and rising and now cutting slowly. Despite all of it, Duolingo continues to grow. Chess is also a very popular game. And I think management saidits growing faster than math and music. And they only have it on iOS. They've added an AI tier which they're working to make much better because management acknowledged it works best for experts of a language. They're working to improve it for beginners too. Why does that matter? Imagine just speaking to the app in a language to learn how to speak it. Much more effective. People want to learn things. They just want it presented in an easy to digest way. And Duolingo, is by far and away, the dominant learning platform. And they have a ton of data and testing to continue to be so. I'm not a shareholder.

Leroy--Brown

Oh look it's another value investor. Great. What other metrics are possible to use to determine fair value of Walmart? Perhaps their FCF being utilized to pay for dividends and operations. Perhaps their excellent leadership. Perhaps their utilization of low interest debt to leverage growth into online marketplace. Perhaps the fact that consumer spending remains strong at WMT during economic downturns. Perhaps the fact that while consumer spending has begun to show slowdowns across other segments of the economy, it has continued to remain strong at WMT. Or perhaps it's the fact that their business is in selling consumer staples, which is by definition, a defensive strategy. So yes, they're one of my defensive positions, yes.

ImakeBADinvestmentsx

If they make google stop. What happens? Many people will just download chrome. Many will make chrome home page on safari. And Many will just use safari or something else. Apple loses $25b profit in bottom line. Google losses some users but not as many since safari is so bad, many will just get chrome and keep using it like nothing happend. Goog FCF goes up 20b overnight and they keep making money all though less. It's worse on Apple then Google.

EfficientAd7124

They gave 70-90% market share in Southeast Asia. It’s not in US markets at all. Most of Southeast Asia is developing still and we should see massive revenue increase. Founder led, low debt, 7 billion in cash, 200-300 million FCF next quarter, and they’re valued at 20 billion. It’s going to 60-80B by end of 2027

greenpride32

UPS is on the verge of becoming a dividend aristocrat - I think they'll push for it. Their mistake was raising dividend by so much during pandemic spike up in profits. All you need is sufficient FCF to support dividend payout - it doesn't have to come exclusively from the profit pool. Sure it's not the best thing, but plenty of companies have done it short term. Otherwise we wouldn't have all these dividend aristocrats and kings.

MaterialGuy007

Yahoo just posted today. Excerpt CRCL If CRCL stock is priced at 40x forward FCF, which is not too steep given its expanding margins, the company will be valued at a market cap of $57 billion, indicating an upside potential of 84%. Out of the 15 analysts covering CRCL stock, five recommend “Strong Buy,” one recommends “Moderate Buy,” five recommend “Hold,” and four recommend “Strong Sell.” The average CRCL stock price target is $181.54, above the current price of $137.64.

thri54

What % of that FCF is attributable to stock comp?

RiPFrozone

My choice isn’t the individual companies making the AVs but rather the service which has partnered with many AVs such as WeRide connecting the passengers to the drivers. Uber. Today it is trading at 21x FCF and 15x 2027 FCF. That’s growth from 9.2b FCF in 2025 to 12.6b FCF in 2027.

Creative-Cranberry47

1. once you understand the tone of the management you get used to it, and actually understand that he was actually bullish for q3. everything else was pretty standard stuff 2. the 15.5M one time non cash expense shouldn't make ROOT drop 500M in market cap nor should it make ROOT be capped in going up billions of dollars. it doesn't even impact FCF if anything this should be the easiest buy the dip, since intrinsically the company is growing extremely aggressively

No_Cake5202

They capitalize future earnings or FCF, using a DCF model or some variation of it. Here is how they estimate future earnings, they check past financials and do a simple extrapolation, then they adjust base on what management says, and they sprinkle some of their own opinions including fundamental and technical astrology. I first do my own analysis, and then compare it to theirs. if my price is significantly higher than theirs then I revise my analysis, if I believe it is still correct then I buy. I never trust their analysis only mine. The market doesn't know, the analyst doesn't know, the insider doesn't know, the "smart" money doesn't know, and you or I don't know, we are just placing bets on the future, making up stories about the companies we like/dislike.

CharismaEnigmaArt

Bull vs. Bear Case Bull Case Sticky ARR subscription model. Best-in-class integration (cross-sell strategy working). Global demand for cyber protection remains strong. Low debt and huge institutional ownership = stability. Bear Case Valuation leaves little room for error. Insider selling could signal caution. Competition is intense and pricing pressure is possible. Sensitive to Fed rates (long-duration growth stock). --- 🎯 Key Levels & Trading Plan Entry Range: $175–185 (current consolidation). Resistance: $191 (50-day SMA), then $200. Support: $170 (recent low), strong support ~$160. Exit Target (Swing): $200–210 (short-term retest). Exit Target (Investment): $250–300 over 18–24 months if ARR continues strong. Stop Loss: Below $160 if support fails. --- 📌 My Score Squeezeability (short squeeze potential): 65/100 (short interest only 5.2%, not huge). Swing Trading: 80/100 (good volatility, strong catalysts, but resistance overhead). Long-Term Investing: 88/100 (cybersecurity secular growth story, though valuation risk is high). --- ✅ If you’re thinking gradual accumulation, your approach makes sense — scale in on dips, adjust as fundamentals or macro shifts. For monitoring: ARR growth, FCF margins, customer penetration, Fed rates, and competitive wins/losses will be the top indicators.

GardenDesign23

Yup. Look at FCF. It’s down like 30%+ over the past two years. This is a turd that’s got another 20% to drop from here

meifx

I don't think Tesla does $60 billion in FCF from Automobiles, but that is what is required to support a $600 billion valuation. Agree with you that Tesla is facing INTENSE competition.

Gold_Dragonfly_3438

UBER grows 18% a yeae, has 16 PE and has same TTM FCF as Netflix, but maybe you’ll buy it in the next 2-3 years.

RiPFrozone

“The market is a voting machine in the short term, and a weighing machine in the long term” Remember this phrase and understand short term price action is mostly influenced by sentiment, however long term buying good companies with real FCF growth will pay dividends. It’s also why you can buy great businesses at a discount and take advantage of market wide overreaction like in April. Expectation and guidance matter more than great numbers, when expectations are high and a company doesn’t beat but still posts good numbers that’s when stocks fall, if guidance is lowered stocks fall. However tune out the noise and buy those great businesses cheaper while the market overreacts and you’ll do fine. Look at things with a 5-10 year horizon, don’t be swayed by short term price action (less than 3 years) especially when the business is still doing great. If I see consistent FCF and earnings growth but the stock dropping I’m not going to be swayed much, if anything I’m happy I can buy at an even bigger discount and reap the rewards 5-10 years from now.

tdogger88

10x is only $460B, almost what palantir is now, and Reddit growing a lot faster than palantir and I think reddits revenue growth and FCF will increase faster than palantir. And with Reddit you don’t have the meme stock crowd accounting for half the valuation.

tdogger88

DM me, I just sent a summary to another user. I mean this respectfully, open your mind to both sides. People said the same about Facebook when it IPO’d and the purchase of instagram, and so on. I don’t like X, never liked twitter, snap, Pinterest as investments ever, ew, gross. But Reddit it so much different, it has utility, there is no other moat like it, and it’s becoming a must to train all LLM’s and that listen my revenue will only keep growing. Users are so under monetized it’s insane, that’s why growth is so consistent. Also, the FCF is about to go on an explosive growth streak IMO.

IgorKis

Positive FCF, Elevidys is back on the market for ambulatory patients, and the 3rd death wasn’t due to SRPT. They redeemed their shares from ARWR which reduces financial risks even further. They had 850M in cash at the end of June, so I hope they paid some of their debt.

Leroy--Brown

Man value investors. Everyone focused on PE as a sole metric to indicate a good value, yet ignore FCF, low interest debt, margin growth, revenue growth, and intelligent utilisation of low interest debt to expand. Along those same lines it's a small/mid cap company focused on growth, hence why a PE ratio doesn't assign proper value to a company that plans to grow into their PE. Not to mention the simple fact that PE ratio across the board for basically all sectors has risen to higher levels than buffet would deem investable.... Ok so, if dutch bros was a SAAS company, and the company was being evaluated using a rule of 40 score to determine if it's growth rate was sustainable, their rule of 60 score is 65. That's insanely healthy. And that's a more appropriate metric to utilize, if one were to only look at one metric. But their FCF, their operations being funded by FCF, and their intelligent use of low rate debt are also big positives.

MarketingReasonable4

I was looking at those too , lol Price to FCF was like .5

WSBNon-Believer

FCF cow that was treated as an underdog, beautiful opportunity

Little-Lack-4062

P/E is based on net income (doesn't include CapEx), while CapEx is a cash flow item. CapEx-driven depreciation does lower net income, but Amazon has a 20% higher depreciation expense for TTM compared to a 60% higher CapEx. and, in turn, can affect the P/E ratio, it's not the full story. P/E (No CapEx Impact): AMZN @ 34.53 GOOGL @ 21.51 FCF/Yield (CapEx Impact) AMZN @ 0.55% FCF Yield GOOGL @ 2.7% FCF Yield Even if AMZN cut CapEx by nearly 40% just to match GOOGL's, it would still return only a 2.2% FCF/Yield. Regardless of the CapEx spent, its meaningless without resulting in a meanwhile increase in Revenue and Net Income. If AMZN could simply "choose to make more revenue" that would change things, but I don't think that's the case. On a Revenue Growth basis, Google's sitting at 12.65% (FWD) and 13.13 (YoY) versus Amazon's 10.64% (FWD) and 10.87% (YoY) respectively. The only valuation argument for Amazon that makes sense (and it definitely would for some) is on a muti-year growth roadmap (Zoox, Satellite, Pharmacy), but I think the same (if not stronger) argument can be made for Google when it comes to untapped revenue sources (Waymo, Gemini, Verily).

Spl00ky

Interesting. I'm using 0% growth in their FCF, a 5% discount rate, and 0% terminal growth rate and I get a fair value estimate of $262. My starting free cash flow is also taking their stock based compensation into consideration.

deflatable_ballsack

no, they’re not firms with larger caps than 60b their TAM is limited by approx: - firms with enough FCF to justify a contract (from precedent > 500m revenue) - firms with highly complex multi national, multi-stakeholder operations - firms with massive data integration challenges and high stakes decision making - The targets are therefore giants in aerospace, pharmaceutical, energy grids, logistics, and govt/military. - the above already excludes the vast majority of companies. - small firms can’t justify it and have much more cost effective solutions - majority of large firms are *already Palantir internally* i.e. Apple, Toyota etc - “Only 29% of large companies lack full upstream and downstream data integrations with governance roles in place” - Mckinsey - Government contracts are inherently limited in scope, and foreign governments/firms are naturally difficult to acquire (Palantirs Europe TCV actually decreased YoY). Going by the above criteria, that’s how I got to approx. 20b (which I also still think is a bit high). And for your final point: - “only 2 out of 12 analysts rate Palantir as “buy” or equivalent, with 7 “hold” ratings and 3 “sell” rating” - Morningstar analysts directly acknowledge the TAM issue, describing Palantir’s TAM as “truly a trillion-dollar question that is unfortunately laden with assumptions”. They assign Palantir a “Very High Uncertainty Rating” - Critically, Morningstar warns that “if our bear case on TAM emerges, the shares will likely prove worth far less than we expect” - Jefferies maintains an “underperform” rating with a $60 price target (62% downside from current levels), with analyst Brent Thill noting that while Palantir shows “strong fundamentals,” its valuation is misaligned with even the most optimistic growth projections - RBC analyst Rishi Jaluria explicitly accused Palantir of “AI washing,” stating that “actual technologists who are deep into AI and machine learning are expressing skepticism around Palantir” In my opinion, anyone who is invested in Palantir is going to get burned hard. The company is trading purely on the greater fools theory.

DoobsNDeeps

I'm buying WEN! +10% FCF yields all into the divi and buyback. As soon as rates start to fall it's going straight to the fucking moooooon

Ok-Recommendation925

1. Scaling up their supply chain solutions with heavy investments geared towards manufacturing (Factories, Packaging, API Labs, etc) to meet their drug sale demands. They are moving towards building their 4th factory in North Carolina, 1,000 jobs estimated incoming. 2. Pipeline is still robust. With the latest FDA application submitted, and awaiting approval for Oral Semaglutide. ETA: Late 2025. 3. Well managed Balance Sheet. The increase in debt isn't reckless, but is incurred due to scaling up their internal supply chain. Their avg FCF has increased from approximately $5B in 2014, to $10B in 2024. 4. New CEO appointment. 5. The GLP-1 Market is just getting started. Expected to grow to $130B in 2030. 6. The stock market has mis-priced Novo, as though Obesity/Diabetes are dead. Also I'm not going to shit on LLY, because the truth is, the market needs both NVO and LLY to meet the growing obesity numbers. Not just within the USA, but also globally.