FCF

k3t4mine

Where are you getting these numbers from? TTM FCF? If so, that's not really relevant, at all. Take Meta for example, they have an estimated 2026 Cash Flow from Operations (CFO) of 130B. They guided for 135B in CapEx at the high end of the range. If they end up hitting the high end and coming in line on CFO, they'd have negative free cash flow. 130-135 = -5. Amazon is even worse. 179B estimated 2026 CFO and a CapEx guide of 200B, so it's firmly cash flow negative. Google and Microsoft have bigger cushions (10-30B), but these megacap tech stocks clearly aren't the asset light cash flow machines they were like just a year ago. This is why they're all funding a substantial amount in the debt market. Considering every single issuance has been oversubscribed, saying the "funding is running dry" is an insane overstatement, but the spreads on these bonds are widening a little bit. Market is clearly a little nervous that their CFO won't grow fast enough to match their CapEx. They aren't defaulting anytime soon, for sure, but anyone claiming we're "early" in the cycle is fucked in the head, because META and AMZN mechanically can't raise CapEx faster than their cash flow grows. If they do, they have to fund it entirely with debt. MSFT and GOOG aren't far behind. The second they start to slow the growth in their Capex, the whole "NVDA is still a growth company" narrative dies immediately.

elgrandorado

I'm confused about this. They're growing all their metrics (Rev, FCF, earnings, paid subs, etc.) but they're going to decline? We've had Google Translate for a long ass time now, and even easier ways to translate languages, yet their business has continued to grow sequentially. I'm confused. LLMs have been out for years now and their company has continued to grow unimpeded. Are you saying that in the next couple years we'll have chip implants that will directly translate everything in your brain immediately and perfectly to speak with everyone in any language in the world? Because that's the only scenario where people will stop trying to learn languages. I'm confused as to how little research you've done into this company and the habits of language learners. I'm confused as to why you even bothered making such a bad take. I

Newflyer3

RDDT down 40% YTD essentially earning 90% gross margin, 3.2M capex spend which probably replaces some chairs and a microwave at their office, and FCF for days to buy back shares also getting punished lol

Dependent_Try_7199

I had a closer look on the numbers. I think the market is overreacting. The company is much more focused on improving the experience - which would create more loyal customer base - rather than short-term FCF and revenue growth at the expense of user experience. With current share price of $98-ish the market cap is $4.5bn - and the company authorized up to $400m share buyback. That's almost 10% of the current market cap - which has very much been unnoticed by the media (e.g. no mentioning in the Bloomberg article). I don't think they will be disrupted by AI anytime soon - they are actually very good at integrating AI in their product. With a P/E of 12-13, the stock looks to be on the cheap side, taking into consideration that the revenue guidance for 2026 is 15-18%

Dependent_Try_7199

I had a closer look on the numbers. I think the market is overreacting. The company is much more focused on improving the experience - which would create more loyal customer base - rather than short-term FCF and revenue growth at the expense of user experience. With current share price of $98-ish the market cap is $4.5bn - and the company authorized up to $400m share buyback. That's almost 10% of the current market cap - which has very much been unnoticed by the media (e.g. no mentioning in the Bloomberg article). I don't think they will be disrupted by AI anytime soon - they are actually very good at integrating AI in their product. With a P/E of 12-13, the stock looks to be on the cheap side, taking into consideration that the revenue guidance for 2026 is 15-18%

Key-Plant-6672

Both are highly successful, FCF machine enterprises 🤣

MutaliskGluon

Because you are looking at non GAAP earnings. Look at cash flow. Their spending on CapEx + Buyback commitments are greater than their cash + projected FCF this year. The market doesnt like that. They want their companies to earn money, not burn cash. Not to mention META is fraudulently depreciating their GPUs, which is making their EPS seem higher than it actually is.

rockets_go_boom

I don't think anyone disagrees that data center revenues will eventually slow down, but pricing that in as a near term certainty is insane while ignoring all the other positives. Nearly all the largest companies decided this expense is so crucial that they will dump their entire FCF into it, and we think that spending is just going to disappear in a year or two? This is oversimplified math but they have a backlog of over $500B and growing, which is more than 2x ttm revenue and still larger than their projected revenue next year. The money from data centers alone is going to be flowing in for at least another couple years. My disagreement is that you can't just say a specific PE is unreasonable if there is actually profits being generated to justify it. I agree long term they will have to diversify income streams, but it's not like they're unaware of this, failing to do this already, or that this will be an issue in the next year or two. None of this factors in NVDA itself growing. They're being valued like a data center provider like Oracle. I'm more interested in NVDA because of future exploration into things like AI hardware integration in self driving. There's room for further growth.

Smooth-Sentence5606

You’re highly misinformed. That is only one portion of their business. They also own Venmo and Braintree. And they actually have the largest customer base out of all payment providers. Not to mention their pristine balance sheet and monster FCF.

Meetdreys

Post-deal, the new Paramount-Skydance will inherit WBD’s ~$33B debt + the fresh $57B+ from the bid, so yeah, interest payments alone could eat billions yearly. Cash flow’s already thin from linear TV decline, and adding that $2.8B Netflix payout (licensing/settlement stuff) is a straight gut punch basically 15-20% of current market cap gone in one check. Budget restrictions are real: they’ll likely have to cut corners on big swings like the Harry Potter series (which needs massive VFX/marketing spend) or delay stuff to protect the balance sheet. Netflix, meanwhile, prints cash (~$7-8B FCF projected) and could’ve thrown real money at those IPs without blinking. It’s a classic “win the battle, lose the war” vibe Skydance gets the keys to the kingdom, but the kingdom might be crumbling under debt. Antitrust might slow it anyway, but if it closes, quality could take a noticeable hit for years.

Feeling_Ad_6671

Their FCF looks good

Portfoliana

bought at $85 in december thinking the turnaround under chriss was finally getting traction. down about 20% now and this drop today is rough but tbh the takeover rumor never made sense anyway. stripe doesnt need paypal's legacy checkout baggage the real question is whether paypal can grow venmo into something that actaully monetizes. $68 is like 11x forward earnings for a company doing $5B+ in FCF, thats insanely cheap if they can even get back to mid single digit growth. im holding but not adding until i see a quarter where unbranded checkout stops shrinking

elgrandorado

I unwinded the last of my ASML position because of this. We're definitely in the throes of the AI CapEx supercycle, but the moment one of the hyperscalers flinches, the ride down will be gnarly. It could be two years from now, but the time to buy into the shovels was 2-4 years ago. I'm debating on GOOG. They've proven their ability to reinvest in the business and continually fend off competitors, but I don't like to see FCF multiples compress like this to starve out AI labs.

xyztome

I've said it once, I'll say it again until I'm vindicated in 6 months time. AI is NOT the enemy of SAAS. It's Jerome Powell. We've never seen rates at this level for this long. It is absolutely choking the jobs market. Why do you think companies are focusing on FCF and revenue instead of growth? You've got this generational productivity booster in AI and hiring is at all time lows because with AI, it's easier to maintain with less. Who tf is SAAS supposed to sell to? Even still, I'm looking at these earnings and seeing >20% growth YOY. It's not as high as when rates were sub 1%, but it's still pretty strong. Once the new Fed steps in, SAAS will be back with a vengeance.

jrex035

Again, all of this is based on other trillion dollar companies dumping all of their FCF into building out data centers indefinitely, despite growing opposition to building them, rising costs, delays in connecting them to the grid, and of course a currently non existent ROI for this literally unprecedented infrastructure spending. It's not sustainable at face value and when the most valuable company in the world is in full blown speculation territory, that's bad news for everybody. It's genuinely funny thay you think a forward pe of 24 for a $5T company is reasonable.

Icy_Letterhead4893

Numbers are clean but read the capital allocation. £7-9bn buyback on \~£3.6bn annual FCF means 70-80% of cash goes back to shareholders. Capex was £257m. They're pricing in a world where the transformation is done and the cycle doesn't turn. That's not strength... that's a confidence bet with a thin cushion. Net cash £1.9bn won't absorb much if flying hours flatten.

FishWings1337

Three rounds of layoffs in three years (18% → 6% → 12%) while simultaneously doubling production. Revenue is growing but they burned $3.8B in FCF last year on $1.35B revenue. That's not a path to profitability, that's a cash bonfire. $4.6B liquidity with \~$1B/quarter burn rate = 4-5 quarters of runway. No permanent CEO for a year. Stock at record lows. Polymarket pricing about 44% chance of bankruptcy before 2027. The tech is legitimately best-in-class but at some point Saudi PIF has to ask whether they're funding an EV company or a very expensive jobs program. What's the realistic path to positive gross margins here?

Separate_Anxiety3347

At that valuation, buybacks can be rational if management sees durable FCF and limited higher-ROIC alternatives. I’d check whether repurchases were mostly anti-dilution vs true share-count reduction, and whether leverage stayed controlled. If AI pressure is more cyclical than structural for their moat products, this could look like good capital allocation in hindsight.

Separate_Anxiety3347

Target-price gaps can be misleading because analyst targets often lag fast sentiment shifts. Market may be discounting slower billings growth, tougher comps, and compression in premium SaaS multiples. I’d compare ZS/CRWD/PANW on NRR trend, large-deal velocity, operating-margin expansion, and valuation on EV/FCF, not just narrative. Could be undervalued, but only if growth durability plus margins re-accelerate.

Artistic-Contact-270

They make 100B FCF/yr, and they are growing 20% Q/oQ, that means they will very feasibly make more than 5T dollars throughout their existence

HaveAKlondike

Investor pushback on Capex spending will force big tech to cut costs. No one wants to invest in negative FCF. Once big tech shows they are cutting spending its game over for the NVDA hype.

marcelolx

Software companies are down because they are about to start to get priced based on FCF, so I would look at that. They used to get priced based on their growth, but with AI, I think investors will look at FCF. Also, as some pointed out, why don't go with MSFT?

Asleep_Emphasis69

MAG 7 will bottom when FCF turns positive again in a couple years is my theory (except NVDA)

Asleep_Emphasis69

Market will not reward negative FCF I think that premium stays where it is or goes lower for at least another year

Laxman259

The commerical revenue is growing at 120%/year and government is growing at 60%. they should be at 22bil in FCF by 2035.

VisualWeek5189

i’m a software engineer and i kinda feel like GTLB at \~$24 is being ignored right now. it’s boring in a good way: subscription SaaS, high-80s gross margins, sticky recurring revenue. and their NRR has held up, which to me is the biggest “are customers actually getting value?” signal. the part i like is the *consolidation* angle. gitlab isn’t “just a repo.” it’s basically the whole devsecops workflow in one product: planning → code → CI/CD → security scanning → deploy. and i keep seeing companies get sick of paying for + integrating 5–6 different tools (jira + github + circle + sonarqube + snyk + whatever). whether they like it or not, consolidation is happening. also gitlab being the default devops platform on google cloud feels underrated. that’s distribution straight into real enterprise buyers, and gcp has been gaining share for a while now. financially they’ve been showing more operating leverage and FCF has been trending the right way. stock is still way below the highs even though revenue growth hasn’t fallen off a cliff. obviously not risk-free. github/microsoft is the 800lb gorilla and if enterprise spend tightens, these kinds of names get hit. but at \~$24–30, this isn’t “2021 SaaS fantasy land” pricing anymore. and they’ve got like \~$1B cash on the balance sheet, which buys a lot of runway.

u_spawnTrapd

I get the angle. It definitely feels different looking at SaaS at 30 bucks versus when everything was priced for perfection. My only hesitation is that high margin + platform story used to be enough on its own, and now the market seems to want very clear, durable growth plus real profitability. Improving FCF helps, but I think people are still nervous about how sticky enterprise budgets really are if things slow down. That said, a billion in cash gives them room to breathe, which I like. I’m not pounding the table, but I can see why it’s on your radar at these levels.

Dramatic_Agency_8721

Isn't it overvalued though? FCF was 1.3b in 2025 vs market cap of 88b at current prices - so a ratio of around 67. Makes me think this pullback is correcting to a more realistic stock price rather than being a prediction of complete replacement by AI.

Normal-Meringue7592

You start buying when money goes back into it. Its quite simple. No stock is ever cheap just because it’s down. It could go to 300 or even 200 for all we know. Wait until its in a up trend… PE this, valuation that… it’s all nonsense. Look at all the companies that are trading at all time low compared to their FCF and and improved margins. Once wallstreet don’t like a stock for a while just stay away from it.

raiderwrecked

Whats funny is all the tech companies will have zero FCF by next year. They're issuing 100yr bonds to raise cash

Gold_Revolution3658

it won't, Been looking at Duolingo (DUOL) for a while now, and I'm honestly surprised it's this heavily shorted. The short interest is sitting around 18-19%, while shared on loan are around 7M, which is pretty spicy for a company with this kind of profile. Now here's the part that doesn't add up: Strong revenue growth Expanding margins Clear monetisation path (sticky subscription+ increasing ARPU via ads) Actual product people love ( at least the DUO fans) Zero dying business vibes Steady and growing FCF And most importantly a great CEO Yet shorts are piling up in like this is some over hyped même stock with no cash flow. If we get a:- a solid earnings beat and better than expected guidance, then things might get entertaining P.s. I am not a financial advisor, just another idiot on the internet

Gold_Revolution3658

Been looking at Duolingo (DUOL) for a while now, and I'm honestly surprised it's this heavily shorted. The short interest is sitting around 18-19%, while shared on loan are around 7M, which is pretty spicy for a company with this kind of profile. Now here's the part that doesn't add up: Strong revenue growth Expanding margins Clear monetisation path (sticky subscription+ increasing ARPU via ads) Actual product people love ( at least the DUO fans) Zero dying business vibes Steady and growing FCF And most importantly a great CEO Yet shorts are piling up in like this is some over hyped même stock with no cash flow. If we get a:- a solid earnings beat and better than expected guidance, then things might get entertaining P.s. I am not a financial advisor, just another idiot on the internet

Gold_Revolution3658

Been looking at Duolingo (DUOL) for a while now, and I'm honestly surprised it's this heavily shorted. The short interest is sitting around 18-19%, while shared on loan are around 7M, which is pretty spicy for a company with this kind of profile. Now here's the part that doesn't add up: Strong revenue growth Expanding margins Clear monetisation path (sticky subscription+ increasing ARPU via ads) Actual product people love ( at least the DUO fans) Zero dying business vibes Steady and growing FCF And most importantly a great CEO Yet shorts are piling up in like this is some over hyped même stock with no cash flow. If we get a:- a solid earnings beat and better than expected guidance, then things might get entertaining P.s. I am not a financial advisor, just another idiot on the internet

MasterDebator691269

Yeah…why would you even still own these with FCF expected to plummet? Never fall in love with a stock. They’re nothing more than concubines to be used and then forgotten about

_hiddenscout

Just my opinion, but yes and no. I think it depends on your perspective of how long you are planning on holding it. If you are thinking long term, then I think it's solid here. In the short term, there is still some headwinds to the stock. For one, the backlog of their cloud is like 45% OpenAI, which has it's own risks. Also the amount of FCF going into the data centers is going to turn off investors.

_hiddenscout

Just my opinion, but yes and no. I think it depends on your perspective of how long you are planning on holding it. If you are thinking long term, then I think it's solid here. In the short term, there is still some headwinds to the stock. For one, the backlog of their cloud is like 45% OpenAI, which has it's own risks. Also the amount of FCF going into the data centers is going to turn off investors.

Separate_Anxiety3347

I agree that “software is dead” sounds overstated. Enterprise software still has strong stickiness through integrations, compliance requirements, and switching costs. That said, durable demand doesn’t always mean durable multiples. Valuations can still compress if growth slows. For cybersecurity, I’d focus on NRR trends, sales cycle length, consolidation pressure, and FCF quality.

Due-Reporter-7004

The main problem are the margins on paypal https://preview.redd.it/3d9widir3wkg1.png?width=1090&format=png&auto=webp&s=2e18b7e2807032c35f7580f7df047dfadf007c87 if you look at the Net FCF Gross and Operating they are all pretty bad compared to competitiors.

DieOnYourFeat

CRDOF is looking good. Currently they FCF their market cap in sanout 1.5 years. The list of non impaired companies currently doing that is.... Negligible. Already up about 5x in last year. Obviously there are risks so bet sizing is requisite. But I would not be a bit surprised if 3x this year. As Ray Dalio points out most people still are way underweight precious minerals and need to move away from their Treasury allocations. So in addition to being a superb value stock investment it helps a lot of people properly diversify. Disclosure: I own a LOT of it

undertaker2k8

Hope that is the case, even silly Cramer had a valid point about CRM and WMT having the same FCF, CRM having 2x the growth and yet WMT has 5x the market cap.I'll just be happy if my existing positions recover substantially soon.GLTA.

boogi3woogie

Future cash flows are determined by… cash flows from the future. So if FCF drops, then valuation drops.

MJ_Wave_Algo

You’re not alone. It does feel like we’re moving from “AI in every press release” to “show me the margins / cash flow.” AI can be a real productivity shift and still be a terrible investment at 50x earnings if revenue growth stays mid and the benefits get competed away. I’d separate “AI winners” from “AI label”: the stuff that holds up in the prove-it phase usually has pricing power, distribution, proprietary data, and you can actually see it in numbers (FCF, retention, margin expansion). Rotating some exposure into energy/industrials isn’t crazy either—data centers are literally a power + capex story. The only trap is trying to manually time the narrative flip out of frustration. Better to use simple mechanical constraints: cap position sizes, diversify, and rebalance based on what earnings/cash flow are doing—not what the hype cycle feels like.

Heavy_Discussion3518

That's the trick, it begins and ends with the insane FCF that Nvidia has from operations outside these investment schemes.

HighlightCautious897

Good businesses, but applying true buffett principles here the margin of safety is basically non existent. Looking at the raw valuation models, paying 77x earnings for pwr right after it ripped is pure momentum chasing, not value. Same with cohr, the optical data center thesis is real, but their Q2 earnings just showed operating cash flow dropping 69% while capex spiked. FCF is literally negative right now, which is exactly why the stock tanked 12% after they reported despite the top line beat. To actually manage a portfolio with under-the-radar infra plays that aren't completely priced to perfection, the midstream energy or legacy grid operators are much more insulated. something like ENB pays a massive dividend while the grid expands, or IRM is quietly pivoting legacy vaults into high margin data centers at a fraction of tech multiples. They are great companies but at these prices, any slight execution miss is going to get crushed

Friendly-Excuse400

KD - Price $12.79, Fwd P/E 3.7x, EV/EBITDA 3.4, Net Debt to EBITDA 0.7x, Just returning to revenue growth post the IBM split three years ago and they have two more years of continued margin expansion as low margin business signed under IBM rolls over and they renew it at higher margins. Their retention rate with existing customers is 95%. Their business is longterm contracts averaging 5 years. They have $1.3B of cash and their debt is rated investment grade. They have a $350M left on their stock buyback they can execute on the recent drop which would represent over 10% of outstanding shares. FCF this FY (FY26) will be about $350M and is expected to grow to over $1B in FY28 due to margin expansion. The accounting review issue announced during earnings release last week was a non-event as they released the 10Q earlier this week. A lot of shorts that rushed in on the accounting issue news will be on the wrong side of the trade. Long term (2 years), KD is a $40+/share stock. I am at about 5% of my portfolio with purchases during the recent drop and would like to take it up to 10%.

Nervous-Tour-884

Nothing close to that gloomy, but I would have to really look at their balance sheet and 10-Q to say. 120-150 mil a year in debt interest, 320 mil in share buybacks and dividends in 2025, declining revenue and margin compression, higher prevailing interest rates, not a lot of FCF, they are fine now, but mid to late 2027 will be an inflection point. They will need to start refinancing their debt before it matures, and if they aren't doing well and keep going down this path of declining revenue and margin compression, they might just get crushed and end up fighting for their life and looking at Chapter 11, or simply just be in a state where they have to refi for 7, 8, 9% interest and their interest costs just start to balloon. It is a turnaround project for sure.

DrElkSnout

Blowout earnings from the miners didn't do shit this go around becasue of what gold and silver did a couple weeks ago. People understand the FCF explosion, but they need to see if it will stick. I'm still long, but with stops in place if it turns unexpectedly. By long, I mean I am in for the next decade, but not afraid to be stopped out if it corrects temporarily. Good luck.

pink_ego_box

Beat guidance while gushing cash lmao The past cash flow machines will have negative FCF this year

regardraging

> The concern with buying PayPal is that it's a value trap It's definitely no growth stock (anymore). It's just another bubble stock that lost its appeal but with healthy financial numbers unlike most of the other garbage out there, so that's a big plus. > I'm interested to see if $40 is a bottom Probably for now, based purely on market sentiment. When growth investors exist, value investors eventually enter and provide a floor. During an actual recession could go to $25 or lower. If co can sustain its FCF after a recession and new CEO actually has a competent strategy to anchor the financial metrics for 5+ years than $80 is not out of question just on the company's own dime.

Mariox

Lockheed martin growing 5%. GD growing 4%. NOC growing 4.5% Analysts think PLTR is not going to beat their guidance of 62% but I think 2026 growth will be closer to 85%. My estimate for PLTR FCF is $4.6 billion this year and growing to $52 billion in 2030. (based off of Karp's guidance of 10x US revenue over 5 years that he said a year ago) And 80% FCF margin I put a 55 multiple on the P/FCF with a continued 30% growth in 2031 and I get a fair value of $1,247 at the end of 2030. PLTR continues to deploy their platforms faster using less manhours and plan on use AI instead of people in the future to deploy their platforms. Customers sign on and then expand their use of PLTR and those customers get their suppliers onto PLTR. My current estimate for 2026 is 85% growth with a bullish case for 95%. Which does sound crazy but looking at my quarterly estimates for 2026 isn't crazy. If I was forced to buy just 1 company today, i would actually pick PLTR over TSLA just because there is less risk for PLTR. Burry thinks PLTR is a consultancy company. The guy don't even know what PLTR even do.

sorocknroll

Why are they cutting? Because they are giving up on their AI program because they are in 8th place? Probably a rally because it already sold off at this point. Because they came up with more efficient models that don't need as much computing power? Rally. Because they have sufficient capacity? Probably a small rally as FCF increases.

UnableWishbone3364

I went balls deep at 39 with stocks plus some 2Y leaps. PE7 with a FCF and authorised buyback that equivalent to the whole market cap in 6+ years is an easy win. It's not like they have negative growth, just slow growth. The value is superb at this price- I dont need paypal to turnaround to win; they just need to stay in their current position. People are talking as if its already dying and the price reflects that sentiment, but the cash flows, actual growth (small as it is) and bloody healthy balance sheet says otherwise.

csky

I purchased some @ 39-40. Even if it goes bust in 5 years (which I highly doubt it would), you still have decend FCF that would amortize your investment sooner than that. Hope they don't spend their flows on bullshit ai capex and just focus on digital banking, which is their only meaningful way out of this death spiral.

Spittin_Facts_

Free Cash Flow (FCF) margin dropped to 6.4% from 21% last quarter. they're straight up burning money now.

regardraging

This subreddit has the most regarded takes on market analysis and a memory of a goldfish. Should really be renamed to "how to lose your money" because investing advice this place is not. AI is in euphoria, revenue for big tech is all-time high, spending has now caught up and consumed FCF. Earnings will get compressed going forward, FCF already has and stock buybacks are now secondary so share support is purely on investors. $ impact on bottom line (revenue & earnings) is negligible for AI adopting end corporations so far. Some users are euphoric, not surprising considering the tech but this does not equal $$. This can be imploded a few ways, most likely is corporate spend on AI gets cut because $$ results aren't there or worse a negative liability event occurs (hello data breach, etc), just takes one brave CEO and the rest of the herd will follow. There's other implosion scenarios too like tech discovery making the current strategy non-competitive or just a plain old recession to push revenues and earnings down. Big tech is literally priced in for complete success on a extremely short timeline. Short timelines lead to volatility and disappointment. Dotcom investors weren't wrong on their premise, they were just early and over invested. Nothing new here. As for the tech, it's both profoundly useful and profoundly wasteful. Take for example the labor market, AI in theory would have made getting hired and hiring more efficient. It has not, it has caused an escalated hiring war which is killing direct applicant hiring. Applicants are spamming job applications with AI generated CVs and companies are using AI to filter massive volumes of applicants out. AI companies make $ on this but end result is actually net negative for both job seekers and companies. Folks are falling back on peer-to-peer networking to recover efficiency, eliminating the tech. Comparable shit happening in the medical field with AI listening tech. Net negative.

Jeff__Skilling

> They’re my favorite because they ran themselves into the ground, declared bankruptcy, stock went to $0, then promptly made $7bil in debt disappear lmao, dude, how [else do you think Ch 11 reorgs work?](https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics) - it's literally an entire area of civil procedure that stands on it's own two legs. [It's literally written into Article I of the Constitution](https://constitution.congress.gov/browse/essay/artI-S8-C4-2-1/ALDE_00013180/)......which makes it hard to take an accusations of crime seriously...... The entire goal is to restructure your debt to stop constraining FCF (usually by diluting the shit out of common equity and usually because there's no other option). The alternative option is creditors gain possession of all of CHK's assets and start liquidating it for cash at fire sale prices........which, if I'm a creditor of a publicly traded company with the largest position of natural gas acreage in the L48 is something I'm desperately trying to avoid, given the balance sheet is shit but the acreage hasn't changed..... Safe to say you saw CHK's prices tanking and abandoned ship without really understanding how the CH11 process works and what goals it seeks to achieve? Or really giving any consideration to the cash-flow producing assets that Chesapeake retained title to (looks like for FY 2019 they generated $1.6bn in OCF...)? Or really what longer term natural gas fundamentals were looking like... Guessing it probably added insult to injury when, after CHK had renegotiated all those onerous midstream contracts at muuuuch more favorable rates and emerged from BK in early 2021, [that Henry Hub would climb to heights I honestly never thought I'd see in my lifetime](https://imgur.com/a/1xpmWyI)

elgrandorado

I sold 70% of my stake in December. It's been real tough justifying holding the remaining 30% at 15x sales with a price to FCF of 50x. I know the growth projections for the new few years are ramping, but that kind of growth is beyond even my most optimistic projections from when I had the company valued at ~$1,070. I think I was pricing in high teens growth on top line, margins increasing 50bps every FY, with a deceleration in FY28 then an acceleration again into low teens in FY29. Terminal growth was at ~6% (which was already VERY optimistic). I need to dig through that valuation again, because it might be time to cash in on the remainder.

PinPsychological82

P/B is misleading for APP. They are extremely capital light and use almost all FCF to buy assets

SamLeCoyote_Fix_1

A retail investor is anyone whose trades don’t move the needle compared to institutional block orders. My focus remains on the 12.8 percent FCF yield and the data-driven anomaly, not on word games

SamLeCoyote_Fix_1

True. US oil producers do not have transport risk issues !! About CHRD, what I see also is that the 5.6% short float is rising right as FCF yield hits 12.8%. It’s a mathematical anomaly that shorts are about to pay for if ... if the stock goes up. I am not pumping, just watching a potential squeeze, not made by retailers, just because the situation is critical around Iran. I guess XOM could also jump, it's safe, 1T is also a target. We will see.

SamLeCoyote_Fix_1

The 5.6% short float is rising right as FCF yield hits 12.8%. It’s not a pump, it’s a mathematical anomaly that shorts are about to pay for.

SamLeCoyote_Fix_1

The 27 percent discount to book value is basically a hangover from the bankruptcy reorganization that the market narrative hasn't let go of yet. You are getting a 12.8 percent FCF yield and a tiny 0.19 debt-to-equity ratio because people are still treating it like a value trap instead of a cash cow.

MakeBigBucks79

Fair point on FCF, heavy capex is a real risk. But the ROI from the past 3-4 quarters proves the spend is working.

_hiddenscout

At the end of the day, buying drives up price of an asset and i think to the main point, without a story I just don't personally see people wanting to buy it. Payments are really crowded right now. Even with the company buying back all the shares, it's still growing revenues at like low single digits and the FCF isn't great. But that's the thing about investing, if you like buy it. Nothing is stopping you from owning it or liking the company. My approach is to go after GARP, which is look for growth at a responsible price. FCF growth and revenue growth is what investors like to look for. Plus it's usually great signs of a healthy growing business. I think if you are going to own stocks and take on that much risk, you should be looking for alpha. Personally, I don't see PYPL beating the market. However, if you think it will, go for it!

_hiddenscout

Not sure if that meant for another post below, but completely agree! I think the OpenAI is more of a hang on MSFT right now, which can keep some investors away, plus the added Capex spend. Valuation is great and if you are looking to hold the company long term, you will be happy with yourself in the future. But to the OP original point, the Hyper Scaler CEO's are stuck between you are fired if overspend and fired if you lose market share. At the end of the day, these companies still will generate FCF and be able to handle the pain for the short term. Probably will make investors unhappy, but all this stuff is so narrative based sometimes. I know you post here a bit, you probably remember the Ice guy who would complain about google all the time, like almost everday, when the stock was around liek 150. It's like doubled since then. Or that one person who would come in post about thanking michael burry.

_hiddenscout

Apples to oranges comparison. It's not really fair to compare Amazon to NYT lol. No idea why they did that, but it's not a great idea to try to compare companies when they are in different sectors. Birkshire is one of those companies that manage so much money and FCF is important to them. This year Amazon is looking to go negative into FCF for the CAPEX. Same thing happened to Amazon during the pandemic. It was around like 2021 to 2023, the company spent a ton on like warehouse, trucks, more logistics. It's kind of what Amazon does and what is really unique compared to the rest of the Mag7, they invest heavily back into the company. I used to work for them, their motto is Day 1. It's actually the building Bezo worked out of, since that's the idea of the company, is never to move out day 1. But during that Capex heavy period, there was recession fears as well as rising interest rates, but Amazon basically was basically down like 50% during that capex cycle. One of the worst performers of the Mag7 during that time period., Could be they are moving away from the company the next year, since they are expecting investors to avoid for the time being.

_hiddenscout

NTY is not really making it's money from the paper, it's literally a cooking and gaming app now. I think it's overvalued, but you can look up the revenue growth and see that is is growing: [https://stockanalysis.com/stocks/nyt/financials/?p=quarterly](https://stockanalysis.com/stocks/nyt/financials/?p=quarterly) Around high single digits with last quarter 11.5% QoQ. FCF flow is really solid though [https://stockanalysis.com/stocks/nyt/financials/cash-flow-statement/?p=quarterly](https://stockanalysis.com/stocks/nyt/financials/cash-flow-statement/?p=quarterly) Would be my guess that is what maybe attracted them?

MoreOutcome8541

Yah bro invest more on unsustainable demand and for a product where nobody yet knows best use case. Oh, and invest so much that FCF will likely turn negative in the following years. Really good business strat

elgrandorado

Devil's Advocate: Look at Google's price to FCF. If this CapEx super cycle continues, it's not such a nice picture anymore.

Glock7enteen

Less than a year ago = years ago now..? Google is actually in a worse place financially than it was a year ago, less FCF and more than double than forward Capex

pink_ego_box

So much work to guess the earnings and nothing on the net margins. You can sell a truckload of Blackwell cards to frenzied hyperscalers and be left with tree fiddy after paying SK Hynix triple the price for the 96GB of HMB3 memory on each card, which was (last year) half of the production cost. Do you think algos ignore the FCF, operating margins and net margins lines in the report?

Wowmuchrya

Burning FCF and announcing 100 year bond + imaginary 160b capex (with no real cash btw) is baffling?

Nervous-Tour-884

Well, imo it isn't the FCF I would worry about as much as how you indirectly expose yourself to so much concentrated risk in gaming, specifically casino gambling. Caesars and others have moved towards this asset light business model, with VICI owning the property. CZR is not in the greatest shape, and if CZR or MGM go under at some point, (CZR going BK in the next 5 years is entirely possible). VICI is going to get hit, and the market for CRE the last few years ... not great, and probably really not great for something like a casino, or worse yet, a Casino shaped like a fucking castle or pyramid lol. You are buying VICI for a 6% dividend yield, and the hope for a bit of property appreciation, but the stock has been dead ass since 2021, and you can get 4% for a certificate of deposit. Just buy anything else.

ZorosonD

Take a look at equivalents in the Triple-Net (NNN) Lease and Gaming REIT sectors. Keep in mind REITs are not measured by Net Income or standard FCF. Instead they're measured by AFFO (Adjusted Funds From Operations). GLPI is a good VICI comparison, or O (Realty Income)

Glittering_Water3645

Usually P/FCF and P/OCF since EPS can be boosted or the opposite by one-time events which doesn't effect the business. Take META Q3 for example which had a non-cash expense (write-off) which made the EPS miss by -87%. P/OCF however did show a more true picture of how the core business actually performed during the quarter.

iwasshotbyatigeronce

They gotta start showing revenue from all of the FCF they are spending before that's the case. So, possibly never if they are real fuckups.

Redditor2000000

MSFT and ADBE are down for two different reasons, which are ironically somewhat opposite to one another. ADBE is down due to the, in my judgment, totally overblown AI-driven obsolescence narrative. MSFT is down because they’re throwing piles of money into things like OpenAI which are not profitable (yet at least). The broad market rotation right now is to higher cash flow companies. ADBE has TTM price/FCF of 12, while MSFT is at 39. This is becoming a show-me-the-money / cash-is-king market (note how high flowing dividend stocks have become as of late).

Portfoliana

Selling MSFT and QCOM was a good call but holding ZS at -36% is risky – cybersecurity is getting commoditized and the valuation never made sense. CRM at -32% is more interesting, their FCF is massive and Agentforce could be a real catalst. Netflix at -29% feels temporary. The BABA/BIDU recovery is a good reminder that sometimes you just need to survive the drawdown.​​​​​​​​​​​​​​​​

Haisaiman

Umm Meta DAU (really DAP) Hasn’t decline since like 2021. This is really a bunch of uninformed fear mongering. I mean I am saying doesn’t have serious concerns like CAPEX and ROI and FCF….. But this is going overboard in the tinfoil hat direction.

Obvious-Guarantee

Lots of terrible answers in here. AI/data center race is real which leads to two issues: 1) depreciation lifespans are inflated (Michael Burry has write ups on this). 2) capex requirement just to run in place are exorbitant. All these tech companies were high margin/low capex companies. AI race will lead to much higher capex, higher energy expenses, faster actuarial depreciation which results in earnings & FCF compression, taking on debt, end of buybacks

Glittering_Water3645

Money will rotate into whatever have decent cash flow yield (both OCF and FCF), cash flow growth (both PCF and FCF) and can convince the investors that will persist for years to come. If the nasdaq 100 companies can achieve that they will see higher stockprices for sure.

SoSeaOhPath

Oops lol yeah I completely mixed up they’re 45% of backlog. Not sure why I was thinking FCF

Whole_Day9866

I mean yeah, there's a real difference in how cash is getting used. Nvidia doesn't have fabs eating their capital. But I'd push back a little, my grading system isn't saying "Nvidia good Intel bad." It's grading cash flow health as it stands right now. Intel might have a great roadmap but the balance sheet today is what it is. NVDA's FCF in 2022 was around 25% margin which still would've graded well. The AI spike made it absurd but it wasn't bad before either. You're right that AMD would be a cleaner comp though.

cbusoh66

Comparison between current Nvidia and current Intel. A more apt comparison maybe to compare two fabless semiconductors makers like Nvidia and AMD or if you want to compare CPUs only, then Intel and AMD. What was NVDA FCF in 2022 or 2023 before AI GPUs really take off? Intel is now a national security, too big to fail type of entity. Intel has 70% marketshare of data center and server CPU and is sold out for 2026. 18A is a breakthrough node internally and 14A is getting interest from Nvidia, Apple, Qualcomm and many others. Intel is re-entering the RAM market through a joint venture with Softbank's SAIMEMEORY with aim at HBM market (just showcased prototype at conference in Japan). As AI moves into inference stage, more work will be done at the edge with CPUs or similar to what Google is doing with TPUs. I could go on as why your comparison is outlandish?

Whole_Day9866

That's kind of the whole point. Nvidia chose fabless and Intel chose foundry. That decision is why Nvidia has 46 FCF margins and Intel burns billions trying to compete in three businesses at once.

sply450v2

how the hell can FCF include backlog? You have no idea what you’re talking about do you even know what FCF is?

MeesterWeen

You’re referring to RPO (remaining performance obligations) with that 45% number, not free cash flow. That is to say 45% of their committed cloud contracts for the future are reliant on OpenAI, which can be cancelled. Free cash flow is an entirely different metric. It did decline 66% in the last quarter because of their data center expenditure, which is a concern, but they do not share their percentage of FCF attributed to OpenAI currently and it would be much much smaller than 45% if they did share.

myironlung6

OpenAI is a cancer to their balance sheet and FCF

SoSeaOhPath

Because people are afraid of their reliance on OpenAI. About 45% of all free cash flow last quarter was attributed to OpenAI. The FCF number also includes backlog. So MSFT has not actually been paid all of this money yet. So that is insane that a $2 trillion company has almost half its FCF coming from a single source. And OpenAI has a lot of commitments to a lot of other compute providers, but it is unclear if they can actually follow through on all of these commitments.

Hungry-Can7929

First, I look at valuation. I form my own opinion on key multiples like P/E, EV/FCF and EV/EBIT to see whether the company looks expensive or reasonably priced compared to its situation. Then I check the latest events that affected the stock price. If there was a big drop or spike, I want to understand what caused it and whether that move is actually justified by fundamentals or just short-term noise. I also take some time to learn about the management team. I don’t go extremely deep, but I want to know who is running the company and whether they have a solid track record. Finally, I ask myself a simple question: does this business have real long-term potential? If the fundamentals, valuation and story align, that’s when I feel more confident investing.

endwithel

About dilution and debt load. I believe they paid 36m earnouts in the end of 2025. This was financed from existing unused credit line from Schwab and their own cash. Next payment is due in April 2027. If they pay until end of 2026, then they need to pay again only 36m. Based on their FCF and approved credit line amount they won't need any dilution. Also look at CEO post in x in 30 of December 2025. He explicity said they won't use shares to pay for earnouts in this share price level. Their share price was 5.40 at that point. So dilution is very low probability at this point, since company have other resources to get cash. About business. If they can keep growing as is, or even 10% per year, this is incredible bargain. Competition in this segment is great, but seems they know, what they are doing. My bear case is something in line with cigar butt, bull case is something much stronger. Valuation optics should increase in 2027, if they can keep their bussiness growing until then this will be 20$ stock then, of course asuming no more high debt load purchases. Lets see, but this price level is free money.

TheConstellationGuy

Totally, I get that. But based on my projections, if the AI narrative folds, it may take up to 10 years for FIX to reach this valuation again. Consider a sudden sell off of fears of cap ex growth slowdown (very possible in the next 1-2 years) - FIX will likely correct 30-60% back down to $400-600 based on how much of a rattle Deepseek caused. This can literally happen with any catalyst, and FIX is indeed a cyclical construction company. I will still hold 100 shares because this is my highest conviction play (50% of my potfolio), but I think I will continue to trim 65 more shares through April as there's just much more compelling names with higher FCF yields and much cheaper multiples (ie FCO, MCO, SPGI, CSU.TO...). Time will tell, but I think at ~60x earnings, time to de-risk.

nate_nate212

Netflix hasn’t been dropping because of the WB deal. It has basically been getting rerated for months. The P/E went from around 60 to around 30 in half a year, and that slide actually started back in Q3. So it is not just the WB deal or fear of getting outbid by Paramount. The market was already treating Netflix like a slower growth company. And even if Paramount wins the bidding, I would not assume the stock suddenly pops. Losing it does not magically reset anything. I think the market isn’t heavily valuing what NFLX is offering as a company: “not explosive” growth, high capital intensity, and inconsistent/lumpy FCF due to cost of content. Spotify is a good comparison. Also subscription based, also a media/content leader, and its multiple got hit even harder. In their case it makes sense because they do not own most of their content and royalties cap margins. Spot’s valuation one year ago was absurd. Netflix at least owns a lot of what it streams, but the market is still lumping both companies into the same bucket of mature subscription businesses instead of high growth tech. It used to be that the stock market loved subscription revenue and rewarded companies for it but that is changing. Software companies are another example as many of those rely heavily on subscriptions, although software has its own industry specific headwinds. Basically this is a broad shift in how the market values subscription revenue, not one deal blowing up the stock.

looool_k_libtard

Genuinely when does Jassy get fired from Amazon? The numbers are improving since he was hired but market fucking hates him. Longest losing streak since 2006 today. Most capex with least results. Still has like 8 billion employees and no FCF. GET HIM OUT!!!!

Healthy_Loan_991

Current P/E is much lower than 28. Q4 GAAP EPS was $1.24, Q1 2026 will likely be lower and then rise up from there. So use $5.00 as a full year 2026 GAAP EPS. First mistake often made in calculating P/E is not adding back stock comp. It must be added back for two reasons: 1) it is non cash and 2) the share impact is included in the diluted share count. That add back puts 2026 EPS on a properly adjusted basis at about $6.50. Second mistake is not deducting cash and marketable securities from the market cap when calculating the P/E multiple. You always use a market cap, less net debt (cash and equivalents, less debt). At today $139 stock price, the market cap is $28 billion. Subtract $2.5 billion for cash and equivalents to net $25.5 billion for P/E multiple calc purposes. If this doesn’t make immediate sense, think of it this way - if Reddit had $28 billion of cash and a market cap of $28 billion, it would be trading at a multiple of 0.00. When you adjust out both the stock comp and cash and equivalents - which is the correct way to calculate P/E, the multiple is 19…which is very low for a growth company with insanely high FCF margins

pink_ego_box

Because they'll go from 73B Free Cash Flow to a negative one because of Capex lmao They have NEVER posted a negative FCF since going public

sportingpool

Stock Market is dumping the "We issue insider stocks today / promise FCF later " model. No believe at all in these kind of scams anymore. For good reason (Snap !)

Rabitai_Trades

I mostly agree the bubble framing feels overstated, but I think it’s worth separating growth from valuation support. NVDA forward multiples look less extreme if you assume sustained data center demand, but the market is also pricing in high margins and continued capex intensity from customers. A small demand pause or pricing pressure can matter a lot. PLTR. The growth rates are real, but the debate is durability/quality—how much is repeatable software revenue vs. project-heavy work, and how sticky are contracts if budgets tighten? Burry/MBS analogy: Different mechanics, leverage/opacity aren’t comparable, but sentiment can still overshoot. What metric are you using to call NVDA shockingly reasonable (FCF yield, PEG, forward P/E, something else)?

LFG530

I understand I was taking about two things at once, but I think your PE metric is wild, I understand they may need to rein in the compensation package, but it also makes sense for them to want employees highly inventivized to keep up user growth. My point with FCF is that it clearly shows that the non-gaap earnings are actually very reflective of what is sustainable assuming they can keep a decent growth rate post layoffs. They have been making some solid money for a while now and I feel their ability to manage their cash is under appreciated by the market even if I'll give you that the stock grants seem to be overdone especially in the context of a very low valuation.

Transportation-Apart

P/E is Price to Earnings you are talking about P/FCF. They are giving away shares to employees and that very dilutive to bagholders.