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How fast can PYPL really decline? At 5% profit decline w/ buybacks and SBC falling at the same rate they will go private in 8.5 years. At 3% just under 8 years. Flat- Just over 7y. No matter how you slice it, thats a good business. They have BNPL and Venmo growing fast enough that in 2-3 years that combo should offset any other declines and flatten out metrics. Someone tell me what I'm missing or why theyre going to decline faster than 5% a year over the next decade
Saw some good data showing that Google tends to decline after earnings reports because of how SBC is paid out to employees. Still doesn’t explain a 20% crash after the stock pumped on earnings release. Seems like the entire AI ecosystem is shitting itself now whether good or bad earnings.
All 3 are solid stocks to own, just don’t look at your port with these 3 stocks till the end of the year. I personally don’t any of the 3 out of personal principles but I do have a lot in SBC from AMZN.
Question, where are you getting this 9% dilution rate? Looking at the investor relations shows dilution being flat YoY. Anyways, that doesn’t change anything brotha! EPS and Free cash flow growth was in the hundreds of percent. Revenue growth was right around 70%. Plus, markets are forward looking. The CFO stated net dilution going forward will be 1-3% with SBC % of revenue being in the high teens due to retaining talent and onboarding some more. Looking backwards, 7-1 revenue growth to dilution is completely healthy. There’s not much of a structural drag even if dilution was 9%. Anyways, as they say, history doesn’t repeat, but it sure does rhyme.
The support levels on SNAP are interesting, but comparing the two on price action alone misses the structural drag on RDDT. While SNAP is fighting for profitability, RDDT is battling a **9.3% annual dilution rate** from stock-based compensation. Even with their $1B buyback, they are mostly just offsetting that share count expansion. If RDDT stays under 150, that SBC refresh cycle becomes a major pain trade for shareholders regardless of the revenue growth. SNAP has its issues, but RDDT’s valuation still feels heavy at 50x P/E with that kind of dilution.
The 1-3% projection for 2026 is one scenario, but the current 10-K audit shows a **9.3% dilution rate (YoY)** right now. Historical outperformance is usually based on net dilution after buybacks actually reduce the float, not just offset the SBC refresh cycle. We’re looking at the same math from two different angles—I’m just prioritizing the current structural drag over the 2026 forecast. Happy to be proven wrong by the next few quarters of filings.
A $7.5M buy-in from the board is definitely a strong signal for the long-term vision. However, 'preplanned' or not, the math on the **9.3% dilution** doesn't change. Whether the C-Suite is 'happy' selling under $200 is secondary to the fact that the share structure is expanding faster than most retailers realize. An audit on the quality of earnings usually reveals that one big buy rarely offsets a systematic SBC dilution cycle.
Yea no. The price is low because of poor management, no moat and massive shareholder dilution through SBC.
The SBC cliff is brutal but honestly if they can keep milking the AI training data deals the valuation might hold up longer than expected
You have 75 shares of NOW and don’t even know that it’s forward PE is artificially low because it’s not including SBC lol
having high gross margin is the feature of a software company. I never come across low gross margin software co before. 80 is not even that high for aofrware, I have seen 90 before. It’s what happened when u strip away all the SBC. And u get -80 net margin
The point is that it's unsustainable. CVNA investors are fooled into thinking it is sustainable... by no disclosure They're making money from SBC
Stop asking why RDDT pump...it has gone down quite a bit recently and an insider just bought 7M worth of shares and it was not part of SBC
Yeah , this lines up with how I see it too. SBC explains most of it.
Very true. However just like Palantir there is a great profitable growing business hidden behind this damn dilution scam. And it takes 10mins to update any SBC program, and cut down dilution. So, im not happy but certainly not selling either
Stock market has finally said "Seen enough. We dont trust all of you guys promising to earn more Cash Flow than you pay yourself in stocks 'soon' anymore". Snap worst of the bunch. But also Reddit, Pin, Palantir, Hims All these SBC scams get called out now and will trade at a big discount, until this issue is fixed.
Stock market has finally said "Seen enough. We dont trust all of you guys promising to earn more money than you pay yourself in stocks 'soon' anymore". Snap worst of the bunch. But there is also Reddit, Pin, Palantir, Hims All these SBC scams get called out now and will trade at a big discount, until this issue is fixed.
The rise is driven pretty much solely by SBC issued to employees/prospective talent. As you mentioned, not as concerning because Amazon is profitable with a healthy balance sheet whereas a company like SNAP is dilutive because they’re a dumpster fire on life support with no path to profitability. The bet is it’s more accretive for AMZN put their capital towards expansion projects (we can argue about AI Capex spend) betting on longer term growth over shorter term EPS pops by implementing a buyback program of lowering their employee equity comp plans.
Google buybacks counter dilution via SBC unlike Amazon/Dilutazon who keeps diluting shareholders.
I did it solely based on insiders dumping their shares heavily. Looks like they are almost solely paid by SBC.
There is only one thing you need to know to understand this. Evan Spiegel, is the worst CEO in tech. Him and Murphy have 100% of voting rights in a bizzare setup. With this power they award themselves and CO SBC and then just plow investors nonstop. As long as this setup remains, SNAP is nothing more than their personal piggy bank, and they hooked in big money during covid mania, and now feed off them like some kind of shitty vampire.
Well no. Because it describes a made up mechanism that results in interest bearing debt to own your own cash. Again the knowledge gap you have is believing this can happen, which creates a contradictory scenario. At one point I was genuinely curious what you were thinking, I honestly thought you maybe were just badly describing a potential abitrage of future stock price expectations against SBC where one could maybe argue you paid employee costs with less valuable "paper" now. But your entire argument is based upon something that literally cannot happen. It converts cash into debt, through a mechanism that doesnt work to generate a profit that cant be booked. If you understand this then the contradiction has nothing to do with then and than. Have you at least by now verified this critical assumption of yours? Curious how thats going.
Their share count has been growing like nuts. It’s a machine to pay the c suit with SBC
ROBINHOOD Q4’25 EARNINGS HIGHLIGHTS 🔹 Revenue: $1.28B (Est. $1.33B) 🔴; +27% YoY 🔹 EPS: $0.66 (Est. $0.63) 🟢; vs. $1.01 YoY 🔹 Adj. EBITDA: $761M (Est. $833.2M) 🔴; +24% YoY 🔹 Crypto Revenue: $221M (Est. $242M) 🔴; -38% YoY 🔹 Transaction-Based Revenue: $776M (Est. $791.6M) 🔴; +15% YoY Other Metrics: 🔹 Net Interest Revenue: $411M; +39% YoY 🔹 Other Revenue: $96M; +109% YoY 🔹 Options Revenue: $314M; +41% YoY 🔹 Equities Revenue: $94M; +54% YoY 🔹 Funded Customers: 27.0M; +7% YoY 🔹 Investment Accounts: 28.4M; +8% YoY 🔹 Total Platform Assets: $324B; +68% YoY 🔹 Gold Subscribers: 4.2M; +58% YoY 🔹 ARPU: $191; +16% YoY Financials: 🔹 Net Deposits: $15.9B; $68.1B TTM 🔹 Net Income: $605M 🔹 Total Operating Expenses: $633M; +38% YoY 🔹 Adj. OpEx + SBC: $597M; +18% YoY 🔹 Cash & Cash Equivalents: $4.3B Capital Return: 🔹 Buybacks: $100M (0.8M shares; avg $119.86) 🔹 Buybacks since Q3’24 start: $910M (~22M shares; avg $40.64) 🔹 FY25 Buybacks: $653M (12M shares; avg $54.30) Commentary: 🔸 “Our vision hasn’t changed: we are building the Financial SuperApp,” 🔸 “2025 was a record year where we set new highs for net deposits, Gold Subscribers, trading volumes, revenues, and profits, and we closed the year with a strong Q4,”
HOOD Q4 **1.Revenue** Q4 net revenue: $1.283B (+27% YoY) FY 2025 net revenue: $4.47B (+52% YoY) **2.What drove it (Q4 mix)** Transaction revenue: $776M (+15% YoY) Options: $314M (+41%) Equities: $94M (+54%) Crypto: $221M (-38%) Other transaction: $147M (300%+) Net interest revenue: $411M (+39%) Other revenue: $96M (+109%) Gold subscription revenue: $50M (+56%) **3.Profitability** Q4 net income: $605M, diluted EPS: $0.66 FY net income: $1.883B, diluted EPS: $2.05 Q4 adjusted EBITDA: $761M (about 59% margin) FY adjusted EBITDA: $2.52B (about 56% margin) **4.Customer and asset engine** Funded customers: 27.0M (+7% YoY) Total platform assets: $324B (+68% YoY) Net deposits: $15.9B in Q4, $68.1B for the year (about 35% growth vs prior-year platform assets) Gold subs: 4.2M (+58% YoY), adoption rate 15%+ ARPU: $191 (+16% YoY) Extra context on activity (FY 2025): Equity notional volume: $710B (+68%) Options contracts traded: 659M (+38%) Crypto notional volume: $82B (Bitstamp $48B, Robinhood app $34B) **5.Capital returns + 2026 early signal** Cash and cash equivalents: $4.3B Share repurchases: $653M in 2025 (avg $54.30), plus $100M in Q4 (avg $119.86) Prelim Jan 2026: Net deposits $4.5B Margin book $18.4B (+121% YoY) Equity notional $227B (+57% YoY) Options contracts 200M (+20% YoY) Crypto notional $22.9B (Bitstamp $14.2B, app $8.7B) 2026 cost guide (non-GAAP): adjusted operating expenses + SBC $2.6B to $2.725B (midpoint about +18% vs 2025)
Do not look at stock price. Look at Enterprise Value. If a company sells a lot of stock, the share price can look historically low while the value of the company has actually increased. Just a warning. 2018 EV: $14B 2025 EV: $24B The company's value has grown 70%, revenue +7x, still loses money, no FCF once you back out SBC. If a company grows revenues 7-fold and cannot produce positive OCF, when will it?
Last I checked they were spending 20% of their revenue on SBC and I hard passed on it. How do you view that?
Not good comp. Rddt has one of the best tech mnmgmnt team, a super-focused one of the best run company. The stock is down because on a lot of metrics, it looks expensive and maybe they are overmonetizing. At least that's what the bulls are worried. Snap on the other hand is really cheap but it has one of the worst tech mngmnt team around. They can be really profitable but they spend 1 billion/yr on SBC printing new shares like no tomorrow. Ceo is an idiot with super-voting shares & chance of activist action is low. New worried hv emerged from New législation worldwide to ban social media for kids below 15. Slowdown in America MAU in last q.
But other companies are profitable. At this price, you’re looking at >5% annual dilution and/or loans to service the huge SBC. I’m a bag holder as well but have been trying to unwind by selling covered calls and buying put on the recent decline. Their compensation model makes SBC a bigger problem when prices are low since they’ll have to grant mores to get to target compensation. Throw in a recession in the mix and this can easily tank another 20-30%.
Sure, but I don't think it's as easy as you are making out. I don't think I've heard of companies doing material pay reductions for existing employees, which is what you are suggesting. More likely would be giving less/no SBC for new hires and gradually reducing SBC over time through attrition/hiring, but that takes time to have an effect.
it’s got high SBC but after trump revoked the clearance and saas being destroyed it’s a tough one
Not touching this ticker until they change SBC. War criminals
Can they meaningfully cut SBC though? Employees will not stick around if you start cutting their compensation. And moving the amount into base salary obviously doesn't help share price.
It’s easier to be a rule of 40 company if you simply reduce cash comp drastically and replace with stock based comp. I would agree SBC on its own is not super interesting, but the keep diluting their shareholders little by little over time. They buy back 2 - 3 percent of outstanding shares on an annualized basis but their outstanding share count keeps increasing by 1 - 1.5 percent every quarter. So no, if you want to look at long term discounted cash flow on a per share basis you HAVE to look at repurchases and dilution.
What's wrong with SBC? Wouldn't cutting it make talented employees leave for other big tech like Google, AMZN, etc.. as they still have SBC?...
I agree with your analysis. I recently bought them on a gamble they cut SBC. I dont know why the board doesnt push for less SBC given a glut of talented SWE who will waive SBC.
It’s possible they are including SBC in FCF? I am not too sure. Please let me know if you find out!
You won’t find anyone value to buy into a growth story for the future. That is what they have to sell, future growth. Yes SBC is high, the people are critical of their products. Name someone not critical of a company’s products really. There is always something. I think the SaaS winter is upon us but there is a lot of growth and management here that can turn the ship around and this could be another darling in the coming years. I hold stock and options in TEAM.
Looks good. Forward P/E of 19.4, PEG ratio < 1 and 23% yoy growth. Market expectations are predicting profitability this year and they regularly hit expectations, which could mean S&P500 inclusion. They also announced a stock buy back offsetting SBC. The current valuation has been beaten down on the idea that everyone is going to build and maintain their own tools rather than buy them. I've cut my fingers catching this falling knife but think in 2 quarters after more results with 20+% yoy growth the tales of Atlassian's demise will be seen as greatly exaggerated.
I own a little bit of $TEAM. It's a trap. They have been executing really well on the top-line growing quarter after quarter steadily and very nicely. The latest quarter was excellent like you mentioned. Two things: a) Their SBC basically negates all their FCF. If they are using AI internally to improve operating leverage, it's not visible yet. b) They have also been making very expensive acquisitions - basically overpaying to try and hit an AI holy-grail. They are relying on acquisitions / bolt-on instead of thinking ground-up about an AI future.[*] Rovo is thus far unimpressive, and they don't have the "muscle" for ground-up innovation. [*] Caveats - they do have an official MCP server, and their Rovo agent is getting more functional. Howver, you do need to believe that their suite of products is a sufficient moat that in the future customers want to use Jira in spite of the poorly integrated AI. ---- I'm going to wait for a few quarters and sell my shares if there are is no materially positive news on the AI and operating leverage front. The current revenue growth is all smoke and mirrors.
i wont sell, its a great business. but the SBC sucks. also, the stock is heavily discounted right now. and maybe this SBC is part of the reason why. CEO selling
i wont sell, its a great business. but the SBC sucks. also, the stock is heavily disounted right now. and maybe this SBC is part of the reason why....
Looks cheap on a 5-year DCF basis: Assumptions # Current Cash Flow FCF/Share (TTM)$3.61 FCF Yield (TTM)2.58% SBC Impact-50.16% FCF/Share (TTM) $3.61 FCF/Share Growth Rate % 20 FCF Yield (TTM) % 2.58 FCF Yield (expected) % 2 Desired Return % 15 # 5-Year Projection # Calculation Results Annual Return from today's price 26.27% Entry Price for 15% Return $223.30 (And I expect they'll grow FCF faster than 20%.)
My main concerns with BMBL are not personal or about who is running it. They are structural and financial. Dilution from stock-based compensation is real. Bumble’s share-based compensation has been a material expense on its income statements, with tens of millions recognized each period as part of employee pay and incentives. That is a meaningful cost relative to a business with declining revenue. For example, total SBC expense was over $26 million in FY 2024 and remains significant in 2025 filings across functions such as G&A and product development. User metrics and revenue are under pressure. In Q3 2025, total paying users fell about 16% year over year to roughly 3.6 million, while revenue declined about 10% to approximately $246 million. Competitor apps such as Hinge and Tinder continue to add users while Bumble trends in the opposite direction. Industry headwinds are real and not just company specific. Analysts and news coverage point to “swipe fatigue” among users and slowing growth across the online dating category, which led Bumble to restructure and cut about 30% of staff to target $40 million in annual savings. The core risk is whether Bumble can reverse user declines and sustainably grow paying users while managing dilution and costs in a highly competitive environment. If that does not happen, even disciplined cost control will not be enough to restart growth. That is a much stronger argument than making it about who should be in management.
It's still expensive... Even if you look at FCF, so excluding all SBC, they are trading at 40 per FCF per share, higher than MSFT's 38, and mich higher than Adobe and Autodesk which make much more money: https://sg.finance.yahoo.com/compare/FIG?comps=ADBE,MSFT,ADSK Figma's TTM FCF margin is 25%, Adobe's is 41%, Autodesk's 30%, and Microsoft's 25%. ... and if you take SBC back into account, it's even worst. They still have about a billion in vesting RSUs. As someone else said, I wouldn't be surprised if it goes down to single digits.
I agree SBC is way too low.
stocks valued on expectations. falling us dau is a long term negative. There’s an easy path for it to double, cut 20 percent of staff, reduce SBC, hire new ceo. There it’s now a 10 dollar stock. If super voting shares didn’t exist Bending Spoons( who acquired Vimeo and other apps) would probably already placed a bid. But Evan doesn’t seem like he will ever give up control.And he still doesn’t seem to care about burning money because he already sold billions of stock. So it’s just going to keep grinding lower until he quits.
There’s an easy path for it to double, cut 20 percent of staff, reduce SBC, hire new ceo. There it’s now a 10 dollar stock. If super voting shares didn’t exist Bending Spoons( who acquired Vimeo and other apps) would probably already placed a bid. But Evan doesn’t seem like he will ever give up control.And he still doesn’t seem to care about burning money because he already sold billions of stock. So it’s just going to keep grinding lower until he gives up.
Yeah they do more SBC than buyback. Effectively they award themselves shares then have the company buy them back. My math says its about 60% of SBC over trailing 12 months. So its still net dilution Trash company lead by trash execs. No idea why investors tolerate this.
And almost all of the money they’re hemorrhaging is ridiculously inflated SBC for their employees
SNAP pukes every earnings release when they remind everyone of the obscene amount of SBC they issue. And you bought calls???
Well its been a decade of awarding SBC and then issuing buyback to cover like 60% of SBC. Just a revolving door of offering themselves shares and then buying it back while absolutely cucking investors. Crazy they have tolerated this for a decade. Spiegel must have someone's nudes.
Evan Spiegel on cnbc at 11 AM to pump snap or brag about that sweet SBC and fucking over shareholders? 🤔
OpenAI has views here: Great — let’s do this cleanly and explicitly. We’ll hold everything else constant and back-solve what has to give for $11B today to deliver a 15% IRR. I’ll do this in layers so you can see where the sensitivity really is. --- What is fixed (per your rules) Capital & timing Market cap today: $11B Target return: 15% IRR No cash returns until Year 10 Returns only via buybacks Terminal growth after Year 15: 2% Business trajectory Starting revenue: $1B Revenue path unchanged (growth rate declines from 50% in Year 1 to 3% in Year 15) → Year 15 revenue ≈ $8.4B SBC: $1B/year in Years 1–5 Treated as real economic cost Buyback payout: 50% of net income starting in Year 10 --- At 21% net margin: Year 15 revenue: $8.4B Net income: $1.76B Buybacks (50%): $0.88B Terminal value at Year 15: TV_{15} = \frac{0.88 \times 1.02}{0.15 - 0.02} \approx \$6.9B Add: PV of Years 10–15 buybacks Subtract SBC PV (~$3.3B at 15%) You land right around $11B PV. So the math closes. --- Final answer (clean) For $11B today to earn 15% IRR, given all your assumptions: You need Sustainable net margins ≈ 21% 50% payout via buybacks SBC meaningfully declines after Year 5 --- The key insight This is the important part: > You do NOT need heroic outcomes for $11B to work at 15%. You’re not underwriting: Monopoly margins Permanent hypergrowth Financial engineering You’re underwriting: “Good but not elite” SaaS margins Eventually rational capital allocation Time + compounding That’s why this setup feels asymmetric. If you want next, we can: Back-solve how bad margins can be if buybacks are 100% Or test what happens if SBC never falls below 10% of revenue Or flip it: what does the market imply today about long-term margins? This is exactly how professionals pressure-test these names.
There is some crazy high SBC dilution to employees. Dyor.
I took this from a write up I did in r/ValueInvesting \-Google's deprecation term of 6 years for AI GPU's and related items . But not all capex depreciates at this rate. From last year's capex I found that the average deprecation was \~10 years. Using the capex (91b) divided by the increase in depreciation (2.2b) divided by 4 quarters. So I’ll assume this number for depreciation term stays constant with the doubling of capex to 180b. The effects of the depreciation expense of the forecasted Capex of this year will be \~4.35b a quarter Q1 2027. Also adding in the cost of debt assuming the google uses debt for all financing (not diluting using SBC). This gives about 60 billion in debt issuance. The current bond yield is almost risk free for google, so at a rate of 5% this would cost .75b a quarter. This gets a **quarterly cost increase of about 5.1b in Q1 2027.**
The heist continues, $SNAP buying back $500m in stock and issuing over a billion in SBC Not only going into debt for SBC but also going into even more debt for buybacks 😂
The heist continues, $SNAP buying back $500m in stock and issuing over a billion in SBC Not only going into debt for SBC but also going into even more debt for buybacks 😂
Garbage stock your SBC actually makes snap negative FCF
I know most of you are illiterate but yall should really read SNAP investor letters, they really are always absolute gold. Just Evan spiegel vibing out about his businesses journey and how awesome its been and like totally chill bro. Then he just hits you with how much he paid himself and Co to absolute miss every possible metric you could care about. Pats himself on the back and let's see this quater award an additonal 255M SBC while bluntly saying how excited they are to only lose ~500M a year instead of ~700M a year. It really is a fun read.
soooo, still a gazillion. trillion morbillion dollars of SBC.
SNAP earnings in 7 minutes, shits about to either crater or moon, the company is profitable AF but just needs to stop being run like a scam. SBC off the charts. I have calls, so, it will crater.
Spiegel should be awarded yearly as worst Tech CEO of all time. Crazy people still just plow free money to him and execs. Every, and I mean every ER. Spiegel: "we failed to meet any of our goals. Or run profitably. But we will be increasing SBC to our hard working execs."
Name one other billion user social media app HQed in USA that isn't paying out the ass for capable engineers with SBC
Yeah it’s a mediocre chat app for middle schoolers, how the fuck can the justify $1 BILLION in SBC for their employees every year? Absolutely dogshit leadership
Let me start by saying I agree with you, but isn't every insider selling stock a direct result of SBC over cash?
It seems to me that being cautious is professional, but the forensic depth here is undeniable. For less than the cost of a coffee, it runs a delta analysis on transcripts to detect subtle semantic shifts in management's narrative. Having real-time Bloomberg or Fitch credit parity and $SBC/FCF ratios on the go is a level of institutional intelligence I didn't think possible at this price point. It is basically a high-end terminal audit condensed into a mobile workflow that is hard to find anywhere else outside of a professional desk setup. Of course, we could always leave them a comment about what we would like to see added or refined.
The SBC/FCF ratio focus sounds solid in theory, but forensic audits from a Poe app feel like betting on a medical degree from YouTube. Before anyone drops real money, I'd want to see actual track record vs. actual earnings misses on major caps.
You are right about this. It’s what’s keeping it from breaking out of its trend. To put it in numbers through I feel like SBC is keeping it from ever going to like $15-20 or something. It’s not keeping it from getting back to $7 which is a 15 % jump from its current trading price.
Had one scenario where SBC dropped 95%, and worse, they’d been encouraging extra voluntary contributions all along the way and restricting other direct ownership. Still underwater on some of my bonus tranches.
spoken like a sheep. Only dinosaurs looks at SBC and complain about it. You want optimized workflows that translate into better margins, and thus, better rule of 40 score? You attract, and retain, top priced talent.
Snap is an ~$11.5B company with ~1B Monthly active users and ~$132M Q3 adj. EBITDA, but: Stock-based comp was $2.5B TTM (now ~$1.06B/year). The company takes on debt to buy back shares offsetting executive dilution. CEO SBC alone runs ~$1B+ annually, masking true FCF. Snap pays 6.875% interest just to prevent exec pay from crushing the stock If execs weren’t extracting billions, Snap screens as a $20B+ company (~21x FCF) with major monetization upside
Snap is an ~$11.5B company with ~1B MAU and ~$132M Q3 adj. EBITDA, but: Stock-based comp was $2.5B TTM (now ~$1.06B/year). The company takes on debt to buy back shares offsetting executive dilution. CEO SBC alone runs ~$1B+ annually, masking true FCF. Snap pays 6.875% interest just to prevent exec pay from crushing the stock If execs weren’t extracting billions, Snap screens as a $20B+ company (~21x FCF) with major monetization upside
Don't worry, they will have the chance again. You are getting diluted at 5% a year. At over 100x forward PE with 5% dilution on a 360b company it will continue to trend down. I wouldn't be surprised if they accelerate SBC as well. They are literally diluting share holders while enriching themselves. Which is fine when the stock price goes up, and retail are not smart enough to figure out what's going on. Because retail will hold all the way down, they know that, and they can continue to dilute all the way down. Pretty soon you will have a 300b marketcap and a $50 share price. Now call me names, say I missed out, etc etc I'm adding shorts all the way down
A 360b company is guiding 7b for 26.... They are also diluting 5% a year to pay themselves SBC. That's over 100x FORWARD PE. I don't think short sellers have anything to worry about.
120M shares y/y SBC dilution, 5%. In 5 years, shareholders are diluted 25–30% The company must grow earnings >30% just to break even per share from SBC. You are literally funding their compensation and nothing more.
Am investor. Do care about dilution. SBC I usually turn a blind eye to though.
he actually should, I would be buying SNAP hand over fist if there was a real CEO at the helm. But him and Murphy have 100% voting control of the company in an asinine setup; and they are hell bent on just extracting as much SBC as possible and do as little as possible for investors.
I believe the FCF yield sits closer to 6% after including the SBC. In any case the fundamentals looks solid in their numbers relative to the valuation.
Because there are other lower quality SAAS companies trading at lower than 15 P/FCF (-SBC), why should the better ones trade at 100? Additionally now you can't spend all of your free cash flow on SBC like you used too.
It’s not real. It’s excluding a huge chunk (maybe an outright majority?) of costs of actually operating the business that only hit the IS as depreciation. E.g., building rockets. It’s capex at the front end, not an expense. And if you just exclude the associated depreciation, that cost just vanishes. But it’s absolutely real. It’s also almost certainly excluding SBC.
Looks like a combo of SBC (6% of revenue isn't great but far from outrageous), warrants from SPACing, and acquisitions? I gave them a cursory look a few months back.
You are so wrong!!! 1) Amazon and MSFT grew at scale, PLTR is at its very beginning. Scaling and accelerating growth!!! Growing at + 70%, worldwide nowadays. 2) The SBC small annual dilution is not an issue, since the company keeps growing as HELL!! In fact it’s the secret to hire the best to keep the machine growing as HELL. So SBC is working perfectly. 3) Well deserved cash out by Karp and Thiel after 23 years building PLTR and now being the OWNER of the Enterprise/Gov space. The classic method of valuing stock does not apply to this monster growth company in the middle of the AI revolution. SAP, MSFT, Salesforce will be devoured by the DB OS infrastructure that PLTR is building. You have no grip on PLTR. See you at 400-500 in 2 years.
You forgot where he awards another 400M SBC for failing to meet literally any goal. Then goes off to write the most vibes based earnings letter I've ever read in my career. Not even kidding, in their first voyage below $10 in 2022 I considered a long term play, and then read their ER letter and thought, oh no way this is a serious company. Bullet dodged.
Main point: ratios are just shortcuts, they only work if you tie them back to actual business outcomes and capital needs. I like your framework, but I’d bolt on a few things: – For moats, I’d look at how often customers actually switch in practice (churn, NRR) not just “high switching costs” on paper. A lot of so‑called wide moats fall apart when a recession hits and buyers renegotiate. – PEG is decent, but I’d sanity‑check it with FCF yield + realistic long‑term growth. Analyst EPS growth assumptions 3–5 years out are often fantasy. – On unprofitable names, P/S under 10 can still be brutal if the sales are low‑margin or heavily subsidized by SBC. I track SBC as % of revenue to see how much “growth” is being paid for in shares. – For survival, I’d include off‑balance sheet stuff: lease obligations, rev‑share deals, and hidden capex. For tooling, Koyfin or TIKR are great for quick margin and cash runway checks, and platforms like Carta or Cake Equity help you see how dilution from future raises might actually hit you. Main point: cheap vs expensive is less about the multiple and more about whether the underlying economics and dilution math line up with the story.
#TLDR --- Ticker: TEAM Direction: Up Prognosis: Long Shares (Starter Position) **The Moat:** Everyone hates Jira, but nobody can quit it (High switching costs). **The Risk:** SBC is eating 26% of revenue, but the valuation is finally back to 2019 levels.
Buybacks are there to cover SBC. They don't care if the stock is cheap or not.
Their dilution actually isn't too bad. SBC hit 10% of revenue in 2020 and has dropped each year since with 2024 coming in at 5.1% and 4.1% through Q3'25. Not incredibly low but definitely better than most software companies.
I worry about their SBC. That's a lot of dilution, but in theory it goes away as they get profitable. I've avoided them because I'm generally of the belief that restaurants are overbuilt and need a contraction. I also feel like one of the best solutions to high cost of living is to eat out less and cook at home more. Bearish restaurants. However, I've been wrong on that thesis for awhile...so.....
Nobody is mentioning the buybacks. Every year you just wait and you own 10% more of the business. Maybe more if it keeps tanking or they cut SBC. There are way worse places to put your money. Just let them cannibalize the shares and your returns will be extraordinary. Zero taxable events while you wait. Love how the geniuses on reddit cite their ability to read a chart as reason not to buy a business lol. It didn't go up last year so don't buy this year! Bunch of clowns.
GM is pretty garbage too. Cant even make a V8 that doesn't blow up any more. Same company that made SBC and LS btw.
3 others I have been dipping into warrants/commons: OPTX: Optics for defense/space, growing margins RDZN: AI insurance platform, good revenue trends smart acquisitions, good CEO SBC: Aesthetics/Medical services in US/Asia, big share buyback announced, strong profits and good acquisitions
You have to pay well to attract and retain top talent. If you pay below market salaries, you won't be able to retain talented employees and will be stuck with below average ones. With that said, Paypal is moving a significant portion of their compensation from SBC to cash based.
Google is a great company but they pay themselves well for that. $23 billion in SBC in 2025. That’s mostly why it normally trades at a lower multiple compared to MSFT and Apple.
Ben straight up says it's to offset SBC.