$TTD

Explicit claim • strong conviction • basis: fair value gap

I have this at like a $4 fair value estimate, which is really bad. Like really, really low. And you might be wondering like, Kevin, why? Like, that's terrible. Why is it so low? Well, I I'll just give you the answer right here. Their revenue is up 3% and their costs of goods sold increased 22%. Growth has collapsed and costs are exploding.

Explicit claim • strong conviction • basis: multiple relative

Yet, the valuation is still ridiculously cheap. It's trading at a forward earnings multiple of 12 and a half. So, the valuation is reflecting the weak outlook. The valuation is pricing in the headwinds for the foreseeable future.

Implied claim • moderate conviction • basis: drawdown discount

When a former superstar stock crashes this violently, are we catching a falling knife or is this a rare historic value opportunity?

Implied claim • weak conviction • basis: drawdown discount

So, guys, TTD, the market cap is 6.61 61 billion. That is the true price of the business, not the ticker. The ticker price is this market cap divided by the number of shares. The next thing I always look at is enterprise value. 8.3. This $1.7 billion difference is essentially the debt it has. It takes their debt, subtracts their cash. This is buying the company with no cash and no debt. Now, is 1.7 billion a lot? Maybe. You got to compare it to its cash flow. Now guys, here's what's interesting. Their 5-year average free cash flow is 625 million. Their one year is 860. So based on their one year of cash flow, they have two years to pay off their debt. That is very reasonable. A low number. I love it. And guys, it's interesting because their cash flow is increasing over the last year relative to the last five years. Another thing I love, their cash flow is way higher than their net income. That's a huge number. All right, next metric, return on capital. This is a qualitative and quantitative metric, but here I'm looking at this going, okay, 8 and a half% a year for the last five, but 14 1.5% last year. I hope this is not temporary. This is great. Another things, their 10-year profit margin 13%, their 5 years 11.3, their one year 13.6. So, there's a little bit of a dip over the last 5 years,