FCF

DerSchamane

At 9+% Free Cash Flow Yield with solid numbers and a history of solid numbers and them using all the FCF cash for share buybacks I have huge difficulties not liking the stock. They just need to survive 1-2 years and with how much they can buy back at these prices it is bound to pay for itself. In my eyes it is priced for complete collapse and that is a tall order for the bears. Disclosure: I am already invested, bought first time a few weeks ago for around 255 I think

_hiddenscout

Few things. One is, PE is just a single metric, you should be using more than that. Second, you shouldn't compare PE's from companies in different sectors. Like there is different PE average for different sectors. [https://pages.stern.nyu.edu/\~adamodar/New\_Home\_Page/datafile/pedata.html](https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html) I like looking at P/FCF compared to PE and NKE is still showing 64. So even with a low PE level, it's still pretty expensive if you are basing it off the Price to Free Cash Flow. Also PEG is high on finviz vs stock analysis, meaning that EPS growth is probably wonky right now.

ensui67

Nope, it isn’t historically expensive. It is fairly priced and actually got cheaper since September/October. It is your simple math that is outdated. P/E does not capture the growth. Margins, FCF, etc. all matter and better analysts have pointed it out. Even by P/E, market got cheaper over the last few quarters, so, what data have you actually been analyzing? The market is always right. You always have to be in that mindset because the price is the price. You being in that much cash and having a long term investment horizon just goes to show that you are not smarter than the market. It is the collective thought of trillions of dollars and you don’t have trillions of dollars.

Crazy_Donkies

It also keep bringing up DCF and FCF but doesn't realize FCF is impacted by CAPEX that can also lead to margin expansion in the future. It lacks the understanding for why some of these companies have lower FCF. Also lacks the understanding that companies can stop spending on CAPEX when needed, thus returning to positive FCF.

Crazy_Donkies

You also keep bringing up DCF and FCF but don't realize FCF is impacted by CAPEX that can also lead to margin expansion. You lack the understanding for why some of these companies have lower FCF. Also lack the understanding that companies can stop spending on CAPEX when needed, thus returning to positive FCF.

drew-gen-x

AT&T $T earnings this morning EPS $0.57 beat est $0.55 Revenue $31.51B beat est $31.25B Guidance EPS for 2026 $2.25-$2.35 vs est $2.30. FCF $2.5 down from $3.1B YOY due to higher fiber cap ex investments. $T is down over 3% this morning. I think the market is worried about their decreased FCF and increased cap ex fiber investment. I added another 100 shares @ $25 as part of my dump $TLT for At&T b/c it rhymes portfolio re-balancing.

Sensitive-Talk9616

Yes, but what prevents Adobe from doing just that? They have billions of designs already, and the cash to spare for developing such tools. I'm not in the Adobe ecosystem and not following closely their products. But I remember the same kind of "what if" with Google a year ago. In the end, it turns out having billions in FCF, thousands of corporate clients, millions of users, and petabytes of data was enough to build tools comparable to openAI&Co.

BrownEyesWhiteScarf

There is no Cook premium - Apple’s PE ratio stayed below 15 for the first six years of Cook’s tenure, and increased largely due to the increased buybacks issues starting around 2017. Cook has both successes and failures when it comes to innovation. He and Ternus were major parts of Apple’s transition away from Intel silicon. At the same time, Cook’s tenure also includes multi-billion dollar failures such as Project Titan and the Butterfly keyboards. So from the outside Ternus seems to be more competent than many other Apple VPs. The real question is if we expect Apple’s margins and FCF prospects to change anytime soon with a new CEO, and in my opinion, no.

Dstein99

One is trading at a 27 Forward P/FCF with free cash flow expected to grow by 85% this year. The other does not have a Forward P/FCF because it’s FCF is expected to decline by $11B. Last year’s P/FCF is 225.

vcpowerlaw

Big headline, but the key is in the structure,$5B up front, the rest tied to milestones, and a 10‑year AWS spend commitment. If you’re trying to interpret it as an AMZN investor, it may help to keep an eye on capex/FCF, AWS margins, and whether the agreement ends up making Anthropic meaningfully stickier to AWS over time.

armadillo_stocks

FCF is 330m, EV is 1.9b. Less than 6x FCF.

_hiddenscout

It's a lot of sentiment right now, so you're going against that. I think overall, they are some good buys, but you should know what you're buying. Like MSFT was selling off less around SaaS vs their FCF expense and market thinking copilot is a loser. I think some names like ADBE has real risk vs buying stuff that requires regulatory or is mission critical. I think we still need another quarter or two before the market flips or the narrative changes and there is still the risk of like OpenAI or Anthropic announcing a new thing that will continue to push sentiment down. I think most investors don't understand how some software works or how it's integrated, so there is a lot of the baby being thrown out with the bath water.

Complete_Water_890

People who gets it gets it and see it as the undervalued stock it is. All those here shitting on Reddit will just try to rationalize not investing every step of the way to $400. A company with \- 90% gross margin \- 70% YoY Growth \- $1B in FCF \- early monetization platform \- The source of all AI training data Yeah, what a dog shit company.

Defiant_Fold_919

Kohls achieved 1b in FCF in 2025 and market cap is 1.7b still bizarrely undervalued, high SI can run to 60

TheConstellationGuy

You have to ignore PE with CSU. It's highly distorted due to amoratization of the acquisitions and non-cash expenses. It's not trading at a 80x PE or whatever your stock app or google finance says. The main metric to use is the FCFA2S (Free Cash Flow Available to Shareholders). Historically, CSU traded at FCFA2S generally no lower than 25x and as high as 35x, usually being in the range of 30-35x FCF. Right now, it's at about 19x FCF. This is much lower than even the low point of where it has traded before. It's definitely not as cheap as Adobe or other SaaS names, but relative to CSU, it's quite a bargain.

Holiday-Bid8464

It is exactly this logic that causes bag holders. SNAP does not have a P/E ratio because they are not generating positive earnings per share. Revenues are slightly up YoY but they continue to operate at a loss, tho that loss is shrinking. FCF is increasing and their end cash position indicates there is runway to improve however debt and restructuring executional risks remain. They should discontinue the SNAP glasses and focus on trimming employee work force (which they have started), and selling ad space along with their subscription model. IMO SNAP is a buy at $5 or below with a moderate tolerance for risk.

_hiddenscout

I personally don't use PE very much. I look at P/FCF and PEG. The PEG is currently at like 1.4, which isn't bad by any means. P/FCF is higher than what I like, which I try to buy under 30. However, it's a rad company with a great theme and growth. Plus they are spinning off some of the business, so things should get cleaner.

Double_Compote_5519

their services division has been carrying them hard but that LEAP production bottleneck still makes me nervous about hitting those FCF targets

Tfcalex96

40% yoy revenue growth, 82% gross margins, and a quarter billion in FCF. The 1.25b in losses is from stock-based comp and R&D with a balance sheet that has only 60 million in debt and 1.6b in cash and cash equivalents. While the stock price is still too high, figma is way more profitable than any LLM.

Neither_Ice_4680

Fair point to raise. The $1.97B matures in 2028, not 2026 or 2027. Near-term amortization is only $20M per year. The debt structure carries incurrence-only covenants — no maintenance triggers — so there is no automatic acceleration from performance deterioration. The 2028 maturity is the risk, but it gives management two years of FCF generation to improve the balance sheet before refinancing. The TRA step-down in 2027 materially improves the debt reduction trajectory.

EdgeIntelligenceAU

Exactly — I look for repeatable cash generation, not just a path to it. The tell is whether FCF improves from operations without fresh dilution doing the heavy lifting.

Defiant_Fold_919

50 percent short interest while still FCF positive and now trending up

bibibabibu

The hilarious part is when the market has any form of 5% correction, some genius on reddit will say "you ain't seen nothing yet kids, we are still xxx% from 2008" Because you know, it's not like companies haven't grown actual revenues, earmings and FCF about 20-30x since then.

pennquaker18

No. It indicates corporate growth and FCF have been great. You don’t even begin to understand valuation.

AttilaTH3Hen

Instincts built upon decades of experience and some rational inversing of sentiment. When SAAS and tech is trading at 12-15x forward revenue, with massive FCF… it’s a generational opportunity.

Sir_Fragles

Here is a professional summary of the current situation and operational outlook for **Prairie Operating Co. ($PROP)** as of April 15, 2026, based on the latest Water Tower Research Insights Conference and SEC filings. ## **Prairie Operating Co. ($PROP): Operational & Financial Summary** ### **1. Financial Outlook & Capital Strategy** * **Cash Flow Inflection:** The company officially projects becoming **Free Cash Flow (FCF) positive in 2026**, with a significant financial inflection point expected in **H2 2026**. * **De-leveraging Priority:** Management has shifted its capital allocation strategy to prioritize **strengthening the balance sheet** and paying down the **Reserve-Based Lending (RBL)** facility over aggressive near-term acquisitions. * **Dilution Reduction:** A pivotal agreement regarding the Series F Convertible Preferred Shares has **reduced potential share dilution by over 40 million shares**, significantly stabilizing the capital structure. ### **2. Operational Performance** * **Production Stability:** The company maintains a steady operational plan utilizing **one rig and one frack crew** for the 2026 fiscal year. This conservative approach is designed to ensure efficiency regardless of oil price volatility. * **Asset Integration:** The integration of **Bayswater assets** and personnel is complete and deemed highly successful, resulting in improved operational synergies and cost-of-service reductions. * **Drilling Inventory:** Prairie holds a permitted inventory of **128 pads**, providing a clear drilling runway of over **two years** without the immediate need for new regulatory approvals. ### **3. Risk Management & Macro Environment** * **Downside Protection:** The company utilizes a robust **hedge book** and has locked in long-term contracts for essential services and materials, providing price protection and cost certainty through **2027**. * **Regulatory Climate:** In Colorado, permitting timelines have improved to a **12–18 month window**, supporting the company’s long-term development plans in the DJ Basin. * **Cost Efficiency:** Current operations are consistently **beating AFE (Authorization for Expenditure) targets**, indicating that wells are being drilled and completed below original budget estimates. ### **4. Market Valuation Context** * **Asset-to-Market Cap Disconnect:** Despite a current Market Cap of approximately **$97M**, the company’s **PV-10 reserves** (estimated at **$1.22B**) suggest a significant disconnect between intrinsic asset value and current equity pricing. * **Analyst Consensus:** Wall Street maintains a **1-Year Target Price of $3.50 – $3.75**, driven by the transition from a development-stage company to a cash-flow-generating producer. ### **Key Upcoming Catalyst** * **May 13, 2026:** Q1 Earnings Report. This will be the first formal confirmation of 2026 production volumes and the pace of debt reduction following the April settlement.

Defiant_Fold_919

Hey why is no one talking about Groupon right now Massive SI with uptrend starting and still FCF positive. This thing has multibagger potential

Defiant_Fold_919

Groupon stock has a 45 percent SI, while being FCF positive and now in an uptrend.

Defiant_Fold_919

GRPN stock, 43 pcnt SI, uptrend started, and still FCF positive

hammer85time

Purely anecdotal but have had decent growth with some CAC40 stocks during the past year - Engie, BNP Paribas, Airbus, Air liquide, publicis. Bought the last 3 during the past month since they had dipped nicely and seem to be recovering. Also, I identified Publicis using Claude to search for CAC40 stocks trading (1) near the floor (2) decent YoY growth (3) good FCF with minimal debt.

Forgetwhatitoldyou

I'd never heard of them, actually, but it seems like every week I hear of some optics company I'd never known before.  Today I read half a dozen articles on Credo lol.  Macom looks ok from a quick glance, but its Forward PE, P/B, and P/S are nosebleed territory, and decent debt and low FCF.  Growth rate of 35-40% is nice but doesn't justify the multiple.  

themattissue

I do not get how I am getting downvoted. Forward p/e of 36 is not cheap… PEG ratio is still at 1.2, P/FCF of 41x, gross margin is amazing but it’s net profit margin isn’t close to Meta’s because they will have a much harder time advertising as aggressively and getting data on its anonymous users is much harder. There are structural reasons Reddit will not likely get Meta’s net profit, at least not any time soon.

pennquaker18

P/E of 21x given the FCF conversion and earnings growth of many of the biggest companies (NVDA chief among them) is fine. Yes volumes were low today - there's clearly a squeezy element to many stocks.

_hiddenscout

I guess, but it's also communication services sector, which is like GOOGL, META, DIS, which also sold off. Could be some technical things like ETF selling off, impacting the some of the names. Probably less AI fears and just general selling in the sector. Also with the sale off, it's still kind of expensive. Not saying it's the worst, but even at today's price, the P/FCF is still at 30, with a forward PE of 30. I wonder if investors not wanting to pay for software feel the same for other names in the space. Nothing feels related to the company as much of just narrative surrounding some of this stuff.

_hiddenscout

Hhahah yeah. MWH is pretty rad company. I own a lot of these type of names like PWR, AGX, PRIM. MWH valuation isn't too bad and it's always cool to see a company IPO to use the money to pay down debt vs enrich themselves, especially since the company is already profitable. NXT is great because it's software and the stuff that moves the arrays, so it's not a panel play. They are growing a lot intentionality too. Another non solar name that is not an American company, but CDLR is really interesting. They are going to be ramping up pretty big the next year or so, they been building all their FCF on new ships. They do offshore wind installation, mainly in Europe. Which I think will be a big winner after this war. Right now they are exiting the high ramp up phase, since the ships are built.

dljmonkeyboiz

FCF is 💀 they’re gonna burn all their cash by year end

Gold-Guy-8

You mean the AI companies that have massive amounts of debt compared to ADBE which has a record FCF and its own built-in AI? I’ll bet on ADBE to maintain its 90% recurring revenue

niaqr

This is genius - people need to wise up to the reality here and look at this logically: 1. Enterprises need to be geniuses to harness AI and make something useful of it 2. If they were as smart as they say they are, they would be smarter than a bag of rocks 3. If they were in fact, smarter than a bag of rocks, they wouldn't have signed an SLA with the garbage that is service now in the first place. Anyone who's worked with it knows this by heart. 4. Therefore, they'll be regarded enough to keep resigning a new SLA rate - and we have the number on just how regarded these enterprises are 5. Servicenow's renewal rate is 98% and their FCF margins are 36% which implies a $190 price target just on FCF multiples alone 6. You'd be a complete idiot to bet against this FREE MONEY PRINTER of a company Jesus Christ

augustus331

Adobe generates roughly 13% of Microsoft's FCF at roughly 3.5% of its market cap. The valuation gap between the two is enormous and can't be explained by growth rate differentials alone. Microsoft is growing revenue \~17% vs. Adobe's \~10–12%, but that doesn't justify a 3.5–4x P/FCF premium. There are companies that are providing far better returns from Saaspocalypse narratives.

ShootsnLadders

I follow several creators who are giving different AIs capital to trade with and having them compete. Several of the Claude agents bought Service Now today, which I think is quite ironic. On its entry it wrote, “ServiceNow is the portfolio's first direct entry into enterprise workflow SaaS, and we're initiating because the market just handed us a gift wrapped in a category error. On April 8, Anthropic launched Claude Managed Agents, a cloud-hosted AI agent platform for enterprise. The market read this as "AI will replace SaaS" and sold NOW down 7.56% to $89.53, a 52-week low. Down 58% from its high of $211. What the selloff missed: ServiceNow is an Anthropic design partner. Claude is the default model powering the ServiceNow Build Agent platform. This company is not a victim of the AI agent buildout. It is infrastructure for it. The valuation: 24x forward P/E against a 5-year average of 50 to 55x. That's a 50%+ discount to its own history. Still guiding roughly 20% subscription growth, 32% operating margins, 36% FCF margins. This is a strong business at an irrationally cheap multiple. Street consensus PT: $185, which is +107% from our entry.”

LushLustPin

Yeah this is a really good way to frame it. “Small cap” feels like a factor but it’s really just a zip code on the market map. I’ve noticed a lot of the flashy ones are basically revenue-at-all-costs with constant share issuance. Curious what you look for as proof of a real FCF path besides just management’s slide deck.

_hiddenscout

SNOW is cool, but i don't really find them unique or that different than something like data bricks or even PLTR. Most of these companies are just ETL's that load over the your data into a BI table that allows you to run different models on your data. Even with it being down like 46% in the past 6months, the stock still isn't even cheap, using fundamentals. Still looking at a forward PE of 83, PS of 10, P/FCF at 43 and PEG of 2.8 [https://stockanalysis.com/stocks/snow/statistics/](https://stockanalysis.com/stocks/snow/statistics/) People will say "fundamentals don't matter", but I do think they do. They help you avoid over paying for something. Even at these levels, I find the stock expensive.

Obvious-Ad-3171

Ran $NVDA through my analysis tool. Diamond Rating 35/50 — Quality Stock, not overvalued by traditional metrics but P/E at 151 is pricing in perfection. Interesting insider data: Jensen has been moving massive blocks in December via "J" transactions (trust transfers, not open market sales). Classic wealth management move, not bearish signal. The real bear case: Blended fair value comes out \~$22 vs $182 current price. FCF is insane ($101B) but the market is pricing 10 years of perfect execution already. For $6K concentrated position — the business is real, but the valuation risk is also real. What's your cost basis?

dljmonkeyboiz

It’s losing money now .. FCF is gone

I_invest_in_AAPL

April 8th vs 9th, haha been there. On MU at 312 though... that's a tough one. Always tricky spotting the top/bottom on those hypergrowth names. For me, still thinking about where the FCF goes for my picks. Thinking more long-term for MSFT and even a little GOOGL, their moats still look wide even if the P/E is a bit stretched. TSLA, definitely agree on the regard strength. Wild ride for sure.

_hiddenscout

MSFT just has the openAI over hang. Just me theory around what is going on, is that since a lot of the hyperscalers are looking to spend almost all their FCF on capex it, the market isn't happy. Add in that like 40% of MSFT cloud backlog is OpenAI, with OpenAI being viewed as losing to anthropic. Then market looking at copilot as a loser. It's basically a lot of sentiment, but it's going to be a overhang on the company. Not saying it Google, but a lot of people where posting the same thing about Google like a year or two ago. The company has sound fundamentals and it's basically just going to take patience right now if you are investing.

microdosingrn

Tim Cook and Apple are so fucking smart. Not torching their FCF on this, just paying a pittance every year to buy whatever the best model is. Inference will be done locally by users on their own devices. Absolutely brilliant.

dljmonkeyboiz

FCF is gone .. TSLA losing money every quarter now

I_invest_in_AAPL

Interesting read. That kind of market cap hitting public markets at once, especially for companies with less traditional FCF profiles, could definitely be a test. I'm always looking at the moat and capital allocation more than the sizzle. Wonder what kind of P/E or FCF yield these companies will command out of the gate. I've got some holdings that might see a ripple if that much liquidity shifts. Not financial advice, just my two cents.

I_invest_in_AAPL

Interesting read. That kind of market cap hitting public markets at once, especially for companies with less traditional FCF profiles, could definitely be a test. I'm always looking at the moat and capital allocation more than the sizzle. Wonder what kind of P/E or FCF yield these companies will command out of the gate. I've got some holdings that might see a ripple if that much liquidity shifts. Not financial advice, just my two cents.

I_invest_in_AAPL

Interesting read. That kind of market cap hitting public markets at once, especially for companies with less traditional FCF profiles, could definitely be a test. I'm always looking at the moat and capital allocation more than the sizzle. Wonder what kind of P/E or FCF yield these companies will command out of the gate. I've got some holdings that might see a ripple if that much liquidity shifts. Not financial advice, just my two cents.

miguel_equivara

The PE isn't even the right metric here Tesla's GAAP earnings are so distorted by regulatory credits and one-time items that trailing PE is almost meaningless. The honest number is FCF. In Q4 2025 Tesla generated about $1.97B in FCF. Annualize that, apply it to a $1.1T market cap, and you're at roughly 140x FCF on a business that just missed delivery estimates, has 50K units sitting in inventory, and watched its highest-margin energy segment drop 38% sequentially. The PE looks bad. The FCF multiple is worse.

Good_Tap6905

Lol well said. But jokes aside, the situation with 50*k* vehicles sitting in inventory is exactly what my model predicted. Whether you call them “three-wheeled taxis” or unsold Model 3, the real issue is that working capital is tied up. At an average selling price of $45k that means $2.2 billion in cash is sitting idle in the parking lot, while free cash flow (FCF) is already under pressure due to spending on H100 computing chips.

Artistic_Item_5710

Check Impax Asset Management (LSE: IPX), they manage in £24B in energy transition-related assets in public markets, private markets and fixed income. I expect their AUM to grow in the coming quarters as more investors seek exposure to clean energy and other transition-related investment. Of note, Impax has $0 debt, has over 20% EBITDA margin, 56% ROIC, 16% FCF, and trading 6 P/E (45% of marketcap is cash).

_hiddenscout

Haven't really dug into either of them too much, but I'm a big valuation person. Like, at the end of the day, you are buying a piece of a business. To me, WM just seems more on the expensive end of things. Like the PEG is 2.5, P/FCF is 33. Forward PE is still at like 28. So you paying a bit of a premium for a great company. Not the worst thing, but just you aren't really buying "low". Republic Services is more expensive based off those as well. PEG is 3.69, Forward PE is like 30, and P/FCF is like 28. [https://stockanalysis.com/stocks/rsg/statistics/](https://stockanalysis.com/stocks/rsg/statistics/) [https://stockanalysis.com/stocks/wm/statistics/](https://stockanalysis.com/stocks/wm/statistics/) If I had to pick one of the two, even though it's more expensive, RSG has better things I like in companies. Like RSG has better ROIC and tiny bit better margin. But for me, I'd pass on both at these levels, just don't seem like the returns will be as great buying here.

ElectricalGene6146

Yes if you use debt well it CAN have a better impact to your cash flows, obviously. But arguing that a company is healthier because they took on more risk and borrowed money is one of the more outrageous arguments. AVAV at this point can always take out debt if they need to, the opposite is much less true with companies already hampered in debt (and negative FCF).

ValueEquities

$100B FCF + services scale is why dips keep getting bought. though only I would argue at \~30–35x FCF, it’s not really cheap

_SirShackleton_

For pure gas plays I tend to invest in quality leaders like EQT. They are not cheap tho unfortunately. If you want an underdog have a look at Harbour Energy Plc, great gas assets in NorthSea and super low lifting costs in the british/norwegian coast shelf. They recently acquired longlife oil assets from LLOG in the Gulf of Mexico so they have assets in multiple markets opening arbitrage options. FCF will be insane. Coterra is a nice mixed play in my opinion. They will merge with Devon and have a decent amount of gas in their future portfolio. Long term LNG deals with UK linked to TTF pricing. Personally i hold CVX, DVN, EOG and OXY.

milkplantation

I'm finding it difficult to understand how this differs in any meaningful way from value investing. It seems you're suggesting that value investing hasn't evolved beyond Benjamin Graham's philosophy and that couldn't be further from the truth. That comes across as pretty disingenuous. Value investing today is wonderful companies at a fair price. Graham's concept of "cheap P/E” was updated to look for a good cash yield via FCF Yield, DCF, ROIC, adjusted EBITDA. Value investors want to invest in understandable businesses with a strong balance sheet, consistent earnings, high sustained returns on capital, and a meaningful margin of safety. I think anyone looking to learn more about this framework might be better served by reading something like Lawrence Cunningham's *"Quality Investing"* or Bruce Greenwalds, *"Value Investing: From Graham to Buffett and Beyond."*

stop-sharting

was thinking about this as well - not sure how easy it would be to hide. at the bare minimum it would show up in capex/FCF.

MeasurementSecure566

The point i was making is that no matter the outcome, the Free cash flow on these companies is superior to the spx500. for example, even at 100 dollar oil, oxy will have a 19-22% FCF. where as the spx500 is at like 4.5% fcf i think? and tech companies at 1-3%? so i say 100, because thats the middle ground between bearish and bullish. But if price went lower, the FCF are still going to be better than anything else. they are the safest play in the market, with the highest moonshot you can get.

MeasurementSecure566

There will be structurally higher prices on oil going forward. so these stocks will have exceptional FCF. and frankly, if nobody buys them, they will buy themselves at a cannibalizing rate of 15-25% of all shares per year.

WingWorried6176

Gotta see how May earnings + guidance play out. If oil is still elevated in the future and XOM FCF per share goes up, the street will rerate the stock on the new P/E an it will trade higher. As of right now they are trading at a premium already. From what I’ve read there can be some divergence until the oil companies post earnings.

Ancient_Plan2953

100%. Earnings can be manipulated by accounting, but cash doesn't lie. P/E just gets a stock on the radar, but FCF yield is the ultimate sanity check against value traps. And like you said, without looking at PEG, you're flying blind on whether that low multiple is actually justified or if it's just a dying dinosaur.

ryzetard

okay. so what about PEG and what about FCF in all of this? you can have low P/E company with high EBITDA and still be a value trap due to liquidity risk associated with low FCF

CowboysfromLydia

> They've been buying back $524M worth of stock on \~$31M of free cash flow. That's 1,600%+ of FCF returned to shareholders I've searched for this but i didn't find anything. Also looks unlikely if not impossible, its only a 3.5B market cap.

Personal_Repair_3579

Threw LEU through a tiil real quick - here's the short version. Balance sheet is actually solid. Net cash, current ratio of 5.6x, interest coverage above most energy peers. Real cushion there. Cash flow is the weird part though. They've been buying back $524M worth of stock on \~$31M of free cash flow. That's 1,600%+ of FCF returned to shareholders. Coming out of reserves, which works until it doesn't. Moat scores "developing" - not wide. The sticky revenue makes sense given long-term enrichment contracts, but margins are below the peer median and capital efficiency is weak. What I found interesting: over 3 years they've quietly shifted from growth to margin + balance sheet. Profitability up 32 pts, safety up 19 pts, growth down 11. Discipline or constraint - hard to tell. Uranium tailwinds are legit. Just watch the cash flow math before going full port

Personal_Repair_3579

Pulled $CEG through a tool - a few things stood out. The moat is real. ROIC is top of its utility peer group, interest coverage is strong, balance sheet has been quietly improving for 3 years. Not a broken business. The cash flow situation though - gross profit nearly tripled YoY but operating income dropped 36% and FCF is sitting at -$5B. They're still paying dividends and buying back stock while FCF is negative. Heavy CapEx is eating everything right now. Also, 3-year revenue CAGR is bottom 20% among peers. The recent growth looks better but the longer trend is weak. So basically: solid fundamentals, mid heavy investment cycle, and the whole thesis hinges on whether that AI/energy demand actually shows up. If it does, they're well positioned. If not, holding at $323 gets uncomfortable.

jretzy

Oracle is loading up on debt and I don't know what there moat is. OpenAI seems me behind Anthropic and Googles models. Oracle is loaded with debt same with Coreweave. I bullish on AI and super bearish on them. Google is in a much better postion they have so much FCF they aren't piling up debt, they have a good model and also have their own chips and use and sell their own cloud. I wouldn't touch Oracle with a 10 foot pole. Doesn't mean much in the big AI picture.

dragoon7201

So when you buy stocks, are you forward looking for trading based on history? Do you also drive staring at the rear view mirror? Cause their trailing PE is crazy due to one time expenses in 2025 (acquisition). Their free cash flow is growing and will likely accelerate from those acquisitions. It literally doubled after acquiring Alani in April. A put strike of 20 would give them a market cap of 5B. Their FCF is around 0.32B in FY 2025, and that is only capturing about half the growth from acquiring Alani. So lets say 0 organic growth next year, their FCF will still probably be around 0.35 - 0.4 M, A 5B market cap will would imply 7-8% FCF yield. Compare that to monster energy, which gives about 2.8% FCF, and grows at low 10% in revenue. And there is no reason to assume monster can grow at 10%, but Celcius with Alani and Rockstar grows at 0. They have shown much faster growth in the last 5 years at least.

ga643953

If you look at the current valuation of the mag 5 and think to yourself those companies are still too expensive with the FCF they are generating like Warren Buffett does, then you really should just put everything into the S&P.

ohgodthehorror95

Gotta improve that FCF Free cum flow

Shotgun516

Idk about high risk but JOE is going to be huge in the next few years. It’s severely profitable, great balance sheet, great FCF. Owns tons of northwest Florida real estate that’s been in development for the last 5 years. In the next 4-5 years, I predict it printing

ChefDry8754

100mio FCF, capex under 200mio, to early for EBITDA, expect improved comps and higher foot traffic + more franchising. Right now its a bet on if they execute the next two quarters really well. Neutral margin compression on their promotions as well, which I find very interesting, tbh I thought the $1 Eat and Play was compressing their margins, but it really has no effect.

Sea_Custard2892

We are witnessing a classic transition from the 'Hope' phase to the 'Show Me' phase of the AI cycle. The Q1 sell-off is a fundamental repricing of the Capex-to-FCF ratio. With the Big 4 projected to spend over $650B on AI infrastructure this year, investors are finally reacting to the inevitable margin compression. When you combine that with oil-driven inflation keeping the Fed's hands tied, the Weighted Average Cost of Capital (WACC) rises, which naturally punishes high-multiple growth stocks. It’s not just an overreaction; it’s a multiple contraction driven by the realization that AI monetization might take longer than the infrastructure burn suggests. Growth at a reasonable price (GARP) is back; growth at any price is dead.

Personal_Repair_3579

Checked out BP in a cash flow tool out of curiosity . FCF yield is solid at \~8.9%, but they're paying out 85% of it to shareholders. Leaves almost nothing for debt or reinvestment. Margins are also lagging peers across the board. The whole thesis basically needs oil to cooperate. If Brent softens, that payout ratio gets uncomfortable fast. At 70% up I'd probably trim a bit tbh. Not a disaster, just not cheap anymore.

ohgodthehorror95

Their capex spend puts a dent in their FCF. This buildout for agentic AI hoes isn't gonna pay for itself

solemnlowfiver

Which company? A lot of tech has supremely good FCF - and they’re also getting obliterated

MoreOutcome8541

Yeah so PE means nothing when the financials are based on overspending, debt, and negative FCF… sorry bulls

SamLeCoyote_Fix_1

* **The Musculature Thesis:** While LLMs provide the "brain," enterprise-grade execution requires the "musculature" of UiPath’s security and governance moat. Consensus underestimates the difficulty of replicating 15+ years of UI-automation libraries in a secure enterprise environment. * **Buyback Arbitrage:** Management is aggressively utilizing FCF to shrink the float (-2.69% YoY), moving from a "Capital Destruction" phase to a "Value Extraction" phase for shareholders.

nvrForgettiSadghetti

I would argue: if you think a stock can triple its market cap in a year not based on hype... then a stock can just as easily lose 66% of its market cap.. again not based on hype. Many of the stocks you bought were near penny territory a year or two ago. Do you really think buying a stock that has quadrupled (reddit 6x or 7x, meta was 90... etc) during a World War and largest geopolitical situation in recent tines was a good idea? Stock picking works when you evaluate based on FCF, etc. In this case, everything is being re-rated to "new paradigm" sticky inflation, high gas prices, etc. Everyone is so used to stocks doubling their market cap in a year after changing a logo and saying the words AI and layoffs 11 times in their earnings report- nobody realizes that this is not organic. All the funny money floods in quickly, it can also flood out just as fast. When you buy funny money assets, you need to be ready for a roller coaster. You go stock picking after a crash or correction. ETFs are still holding up fine because it isn't funny money suspending them. BTC has been a yo-yo too even though the market cap is huge.. people are achieving 10-100x margin on a large scale and pumping stocks to astronomic highs. Nobody does the 10x margin thing to go all-in on J,&J or Ford, so these non-sexy stocks turn into "safe havens" when actually their companies are quite bad (imo about Ford). Trump econonics says wait for lows to buy, sell for profit at highs. You cannot stock pick organically when the president literally goes on TS and "bans" companies for not falling in line.

Eliav_1991

solid breakdown. one thing from the Alibaba 6-K thats easy to miss is how much the free cash flow dropped alongside net income. the cloud growth at 36% is real but the cash burn to get there is massive and the filing shows it clearly. the $52B capex plan with the CEO saying it "might be on the small side" while FCF is cratering is the whole bull vs bear case in one sentence tencent is the opposite story in their filings. steady margin expansion, buybacks retiring 3-4% of float annually, no crazy capex promises. boring but exactly what you want to see when you read the actual numbers

iyankov96

It's also not at 5x FCF. Commenter is lying.

Lost_Grand3468

Right. OP doesn't see the contradiction in his own post. Uses index statistics and then quotes people saying "stocks are cheap!", both things are true. I'm gobbling up some adobe at 5x FCF.

gdren

No way man. Canopy Growth is King Kong of cash burn. They burned $1.1 BILLION DOLLARS in FCF in 2020 alone. Those guys bought a fucking chocolate factory and tried to grow pot in it... they are masters of wasting money.

solemnlowfiver

Do we feel that way about MSFT and Google? With their growth and FCF, I donno. Precious support at 400 and 300 made way more sense but I’m regarded so disregard literally everything I just said

Personal_Repair_3579

Checked out TASK through some analytical engines out of curiosity. Balance sheet is fine - liquidity is solid, not over-leveraged. But revenue is declining and sits in the bottom 1% of IT services peers on growth. Operating margin is in the 19th percentile. And FCF is actually negative, which makes the dividend a bit of a head-scratcher. My guess? Market looked at stalling revenue + weak margins + debt refinancing + a dividend they probably can't really afford and said "nah." The dividend might've been the thing that triggered the closer look, not the reassurance they hoped it would be.

Always_Curious_One2

FOUR = extremely undervalued. RayJay downgrade is silly. “PEG” ratios completely miss ROIC and Free Cash Flow trends. And fundamentally: While AI can automate a digital checkout or a customer service chat, it cannot physically pour a beer at a stadium, check a guest into a Marriott, or manage the "split-check" chaos of a 200-seat restaurant. AI-native payment systems (like those being built into Claude or ChatGPT) are great for buying a digital subscription. They are Terrible at managing VenueNext—Shift4's software that powers over 50% of the major stadiums in the US (NFL, NBA, MLB). • The Physical Reality: In a stadium, you have 60,000 people trying to buy hot dogs simultaneously on a laggy Wi-Fi network. You need specialized hardware that works offline, integrates with inventory systems, and handles mobile ordering. • The "Sticky" Revenue: Once a stadium or a luxury hotel group (like Hilton or Mandarin Oriental) installs Shift4's hardware and software, they almost never leave. It is too physically disruptive to rip out thousands of terminals. 2. AI as an "Upgrade," Not a "Replacement" In 2026, we are seeing that AI isn't killing physical POS (Point of Sale) systems—it's making them more profitable for Shift4. • Shift4 + xAI (Grok): Management recently confirmed they are integrating AI (via Elon Musk’s xAI) into their SkyTab (now Shift4Dine) terminals. • The Benefit: Instead of replacing the terminal, AI is being used for "Physical World Analytics"—predicting how many burgers a restaurant needs to defrost based on local weather and events, or automatically flagging a waiter who is consistently forgetting to "upsell" appetizers. This makes the Shift4 terminal more essential, not less. 3. The "Experience Economy" Resilience The March 2026 data shows that while "Online Retail" (where AI is strongest) is slowing down, the Experience Economy (hotels, dining, travel) is booming. • Travel Surge: Shift4’s acquisition of Global Blue (completed in 2025) gives them a near-monopoly on "Tax-Free Shopping" in Europe. As international travel hits record highs in 2026, Shift4 collects a fee every time a tourist buys a luxury watch in Paris or Milan. This is a purely physical transaction that AI cannot commoditize. RE Debt Maturity: The reason the stock surged 19% this week (Tuesday, March 24) is that the market realized Shift4's debt isn't the "death trap" bears claimed it was. • The Refi: In January 2026, they successfully refinanced $1 billion of their term loans, lowering their interest margin. • The Schedule: They have no major "bullet" maturities until 2027 ($642M) and 2029. With $500M in FCF coming in this year, they can effectively "pay as they go" for their debt, significantly lowering risk

dietchlicious

My app is showing FCF took a 60% dump. Not seeing it anywhere else. Anybody know?

DesertNomadAZ

Seen it as well, probably highest in 10 yrs on weekly. I am accumulating. Lots of FCF, low p/e, very cheap historically on all metrics. Only downside is growth isn't too strong.

FlyingCats17

Coming from someone who is short Tesla, you are insane to short this stock. The FWD PE is under 4 and they have significant FCF even while growing. If the market settles and this doubles, no one would be surprised.

ai-moderator

#TLDR --- Ticker: PLAY Direction: Up Prognosis: Buy Shares or Calls ahead of Tuesday's Q4 earnings Catalyst: Undervalued due to arbitrary SP600 index removal selling pressure and 29% Short Interest Fundamental Logic: It's priced like COVID lockdowns are back, but FCF is $200M and going outside is currently legal. Secret Weapon: The new CEO used to run KFC and is highly qualified to deliver the chicken tendies.

Junior-Valuable2071

Eh .. when people talk about stocks being overvalued the pillar this argument stands on is “if the growth stops”. When looking at the snapshot of these companies current FCF they look like terrible buys. But you just can’t price companies based on their current FCF anymore. The growth story has to be taken into consideration. Moats, monopolistic pricing power, and network effect products all contribute to the growth story.

ReDesignMe

It's from a paid subscription which is why you can't find it. It's an evaluation assuming TTF prices stay elevated at these levels for a prolonged period of time which TTF market hedges indicate to be the case, at least through December 2027. Again though, markets always price in the best case scenario. Truth is the situation is very bad and will only get worse. "Revisiting Tenaz Energy (TNZ). Since we launched our 2026 outlook with TNZ as our top small cap pick in early January, the stock is up a whopping 170%. With shares of TNZ once again advancing +5% yesterday, analyst Travis Wood revisited valuation on strip numbers on account of the material gain in European gas prices. In addition to pricing tailwinds, 2026 will be framed by a low-risk development program that will add TTF exposed volumes into this market where prices prior to the war were already being fundamentally supported by low inventory levels across Europe (notably Germany and Netherlands). • Under current prices, TNZ could generate at least $242mm in FCF in 2026 and $560mm in 2027 should pricing hold, reflective of a 12% and 28% FCF yield and implies EV/DACF multiples of 4.2x and 2.1x, respectively; • Assuming this pricing dynamic holds and a 4.0x multiple, the implied value of TNZ would be $110/sh."

Bitter_Chef3243

I have a few theory’s but at the end of the day snap has 100 different things they can do to boost the stock. -cut sbc -turn 60% of the 1.7 billion R&D spending into FCF -give us voting rights - cut the absurdly large workforce in half - Follow through with the damn 400m perplexity deal I’m just getting started. One thing I’m certain of though is this year consists of 3 huge catalysts. 1) snap subs is set to generate 300m q1 which will start making a dent and has a huge margin to make snap profitable 2) perplexity revenue (also huge margin) will push us to have at least 3/4 profitable quarters which will then cause the stock to re-rate multiples 3) specs launch which will probably fail but cause investors to buy the rumor and sell the news. Also it will free up a lot of revenue from r&d.

ElectricalGene6146

In a sane market, businesses are valued on FCF, not dreams.

illinformed-will

They were like the regards here discovering CSP in a bull run 'whoa infinite money glitch' Imagine last summer after the pop to 560 selling MSFT 250DTE 520p for big ass premium convinced surely by then even with some vol it couldn't be lower. And even if, impossible that the premium wouldn't net you profit nonetheless. No way this behemoth drop below EMA200. Being a bank, you can cook your books and pass that premium as cash so you leverage that position ten fold. At that time, show me one analyst/quant/wsb crayon eater projecting a 30% price drop. Everyone was shilling this shit ''the FCF machine vertically integrating the AI revolution, the everlasting flywheel of everything computer blablabla'' Institutions and funds were still buying. That's it.

_hiddenscout

I could be wrong, but I don't think tech earnings are too related to the war, since a lot of names where already declining like 20% before the war started. Like the hyperscalers are more about their capex spending, basically amazon, msft, and google are looking to spend like all their FCF is not more into capex this year. Software seems more of a multiple compression story, since a lot of SaaS usually traded at higher multiples due to things like higher margins. Market thinks AI will impact this and now are not willing to pay those higher margins, plus the story with private equity and software also adds an overhang. That's just my 2cents.

Stonkgang_

Zoom no need too, over $7bn in cash, 2bn FCF and 58m debt. Likely the opposite via share repurchase

Stonkgang_

Yeah I looked into them, but in terms of FCF yield and liquidity I much prefer ZM.