Abhinav Shah

@TechFundies Company is guiding to ~11% GAAP margin this year. You are modeling 16.8%? What am I/the market missing? I see lower SBC and amortization adding 8-10% by 28/29, so low 20s GAAP margin vs you at 28%. Seems optimistic?

$NOW analyst day was solid. This is the operational workhorse for large enterprise workflows 1) expanding its footprint across functional division most recently into security / CRM, 2) embedding AI across the platform which transitions customer relationships to actions and usage pricing, and 3) moving down market on margin. They are firm that they can’t / won’t open up the platform entirely but are going to construct autonomous work units that can be triggered outside the system but will be monetized [boo hoo AI bears. You don’t get to go to Disneyworld with your own food and operate the rides yourself either]. The financial guidance is a little head-scratching to me. The 2030 subscription guide of 30b base case and 32 plus case implies subscription growth steadies around 20% which would certainly be unique and feels optimistic. Fine. But, then the margin guidance for 100 bps expansion in 2027 feels way too conservative as they said 1) subscription GM will not dip below 80% (AI costs are negligible), and 2) employee count will be flat yy despite the acquisitions. So the exit margin in Q4 is going to be monstrous and run-rate into 2027. Said differently the margin guidance feels inexplicable conservative. SBC will be <10% of rev in 2029 so very nice progression there as well. Whatever, stock remains stupid cheap here. Numbers in my model include amortization in GAAP which is 5% of profit in 2028. Notes AI -Birthrates around the world going down and headcount at corporations flat. -AI <100 day guarantee on AI go-lives to predictable ROI -Re-wrote AI stack to be built-in. ->700 customers have consumed >500m credits -Not going to just open up NOW to anyone but going to open up system of action – open up workflows, skills, context engine, etc. – and will monetize it -Monetization -Will just monetize any action taken inside the system regardless of whether by person or agent Products -Security / Risk – think can be much larger bc didn’t try that hard to get it here. Expanding into identity governance. -Crossed 1b in ACV by 3Q25 w/ NNACV growing 40% yy -<20% penetrated in install base -Business continuity mgmt. and integrated risk mgmt. -Armis / IoT security -Veza is an access graph to understand who / what is accessing what and then build apps on top -Data / Analytics on track to be 1b - >2x NNACV yy growth -RaporDB did 100m in first full year ACV -CRM will be at 2b soon – sales automation, CPQ, Field service mgmt., customer service mgmt -25m employees in employee center Sales -Have 9/10 F500 so going to take down market a bit in upper / mid-market Financials -Will exit this year w/ headcount that they had entering this year -Rule of 60+ by FY30 and >30b of subscription revs – “Whole mgmt. team bought into this from a bottoms-up basis” -SBC <10% in 2029; rule of 50+ GAAP -Expect 20-30% price uplift from new price packaging which introduces consumption earlier -Customers who are existing Now Assist expanded ACV by 3x due to buying more licenses and AI

@KevinLMak I’ve started a fund and, whilst I agree with a lot of what you say (eg running lean etc), I think your perspective on strategy selection is wrong. It might work for you but there are many ways to win, albeit I’m not claiming I’m winning!

@GHadjia @HARVEYAAM I don’t think you can necessarily draw parallels between hard and soft luxury, ie just because hard luxury does better in one quarter doesn’t mean soft luxury isn’t resonating with clients

@HARVEYAAM Thanks for your thoughts! Agree that LVMH isn’t in the same league as Hermes. The stock multiple arguably also reflects that disparity.

Awesome chart from Bernstein on $LVMH and the F&LG "maxi-cycles" that occur. While it's indisputable that LVMH is a difficult-to-replicate, quality asset, that doesn't mean that its various brands aren't exposed to fluctuating consumer preferences/fashion cycles that can lead to positive/negative earnings revisions. The latest Q3 numbers for LVMH were surprisingly weak. The Chinese consumer unexpectedly weakened in Q3 (down MSD % vs. +HSD % in Q1, despite a much easier compare). There was no commentary from mgt on the call that suggested the recent China stimulus announcements had any impact on consumer sentiment/spending patterns for LVMH: "we don't expect this to change the current trend". The bear case for $LVMH is if their latest F&LG assortments aren't resonating with Chinese consumers, and this is being erroneously attributed to a weak Chinese macro environment. This is very hard to know, but the thought occurred after mgt said their Watch & Jewelry segment in China saw the same trend in Q3 as H1. In other words, it didn't experience the same sequential worsening in China as the F&LG segment did. Perhaps there's something I'm missing. Curious to hear others' thoughts! Mgt also noted that LVMH and Dior experienced below growth rates below the F&LG average. The bear case is these brands are losing relevance, and as we've seen with a brand such as Gucci, it's very difficult to revitalize a luxury brand that falls out of favor. It does seem that a lot of $LVMH's NT value will come down to how investors decide to trade the China stimulus theme. This probably isn't unfair, given how exposed to the Chinese consumer LVMH is (note that a lot of spend of the Chinese consumer shows up in other geographies due to travel, and mgt noted that the offshore business of most brands is 40-45%, vs 30-35% in the pcp. E.g., Japan due to the weak yen has picked up a lot of Chinese consumer spend, although this slowed markedly in Q3).

@realpeteyb123 Being European is a mentality not a question of colour, race or religion

I want Europe to remain white and Christian. I want Italian culture in Italy 🇮🇹 Greeks being Greek in the Mediterranean 🇬🇷 Spaniards doing their thing in Spain 🇪🇸 The French drinking wine & eating bread in France 🇫🇷 The Brit’s getting trashed and being improper at night and classy by day in the UK 🇬🇧 I’m not racist, I’m just European and love culture. We don’t want others cultures, we did pretty good with ours. Find your own. Sincerely, A logical person.

@partners_road @TommyOKid He owned United Tech pre merger, which he opposed, and spin offs. So knows the business, but doubt it. My guess would be something like $SBUX.

@TommyOKid Hadn’t thought of those. Don’t ever recall Bill being in defense names so would certainly be a first. You cannot be activist with the defense primes, however.

According to Bill Ackman, Pershing has 2 new investments that they are not yet prepared to talk about. Anyone like to propose here what they think one or both are?

@DonaldPond6 @Darth_Trader1 @BillAckman Having markets in which you can easily short, trade options and access high quality research would help drive interest and liquidity. Look what any retail investor can do in US markets compared to the UK/EU. Retail platforms lag US platforms by a long way.

@DonaldPond6 @Darth_Trader1 @BillAckman The UK and European markets need more interest in investing/trading and wealth creation from this activity amongst the general public. Instead regulators are too focused on protecting them from doing themselves potential financial harm.

Pershing Square #PSH sits at around a 30% discount to NAV despite being a FTSE 100 company with the best performance of any large investment trust, beating the US indices with reduced volatility. The manager @BillAckman is, due to investor demand, launching a similar

@DonaldPond6 @LSEplc He’s a great manger but I wouldn’t assume the US vehicle will trade at par or that the discount on the European vehicle will close (although I wish it would)

Listed fund in the US, $PSUS. That will almost certainly be a huge success and trade at par. A clearer example of how the @LSEplc is a failed market would be hard to find. The Brit ISA isn’t the solution. The country needs a cultural change. Rather than being proud

@TheSecretAcct Excluding the individual stock picks, why do you hold solely investment trusts vs ETFs or Funds? Also seems like a lot of management when you could just hold a core ETF like MSCI World or MSCI All World with a few bets that you like around that as you see fit?

My SIPP holdings (without weightings). Most held since I consolidated into my SIPP in 2018 thankfully, a few more added each year. Last twelve month performance not great but then it's a long term investment. Be interested to see other people's portfolios.

@KcrCap @45thCap Do you have a strong view of margin profile of the business? Collapsed from 49 to 42% from '18 to '23 (investing etc) Anaemic top line growth '21 to '23. Guided to 12% expense growth in '24. Are they really going to do DD top line growth in '24 when they havent for last 3 years?

@45thCap This has been the same story for the last couple of yrs. CFO departure is concerning. Wish I could get comfortable with 1) why $TW was able to steadily gain share for 2 yrs (PT & treasury matching?) & 2) why $MKTX can turn the tide. It was such a clean story 5 yrs ago, now murky

Just continue to be stunned by the fall of $MKTX. Lost market share in both IG & HY in 2023. Seems like higher interest rates would have been a tailwind for volatility, which would benefit MKTX? CFO out earlier this year. twitter.com/KcrCap/status/…

@joelmcohen Expensive: Gymkhana, Jamavar, Trishna (seafood), Bibi Mid-Priced: Gunpowder, Pahli Hill, Bombay Bustle Reasonable: Hoppers (Sri Lankan), Kricket and everyone's favourite, Dishoom Personal favourite is Gymkhana. Bombay Bustle or Hoppers (something different) would be my choice.

London friends: Is there consensus about the best nice but reasonably priced Indian restaurant in London? Several teammates and I will be there so we're going to go out for a nice team dinner one night which is one of the fun parts of traveling. Looking for one that can accommodate various different diets

@orrdavid Need a reacceleration and accompanying multiple expansion to do really well here. Not saying it's not going to happen, but delivery competition much greater than it's ever been albeit less so on price.

@orrdavid 1. Yes 2. Zero chance; rev in company owned stores sideways for a few years and up lsd % in franchised stores excl. COVID bump. Likely 30k stores in 2030 and $6.7 to $7bn of rev at 18-19% op. margin and ~$30 EPS tops. 25x = $750, so a double over 7 years maybe.

Both have overwhelmingly franchises: $MCD McDonalds has 40k stores worldwide, generates $575k revenue/store. EV = $250 billion, which I consider expensive. $DPZ Domino's has 20k stores worldwide, generates $225k revenue/store. EV = $16 billion. Key questions for $DPZ long: 1. Are they likely to grow store count 50%+? I think obviously yes. Based on this alone, it seems reasonably priced. 2. Can they improve revenue/store 50%+ in real terms? Hard to say. But if so, margins could jump up sharply and this is very cheap today. Overall range of outcomes seems pretty good to me? I ordered a bunch of different fast-food / cheap pizzas and compared - $DPZ seemed best by far (even if people think they're all gross - try comparing them).

@Retail_Guru Am curious. Been a while since I was in Delhi or other big cities. How many of these luxury malls are there in places like Delhi, Mumbai etc?

Musings from regular trip to Delhi’s luxury mall. Still bustling in Arnault’s Dior/LV complex & appointment only at Cartier. Gucci quieter. No different to rest of world: iconic luxury on top. $LVMUY $CFRUY $HESAY $CPRI

@SouthernValue95 @PythiaR Am long and agree with you both. Whilst I hope it happens sooner, think it could take till 2030 to get to 20% company op. margin on a $140-$150bn revenue base and $12 GAAP EPS. 15x to 20x multiple is $180 to $240 stock, so at least a double from here, but definitely not a lay up.

@PythiaR 🤝

One of these has a global DTC streaming business growing mid-teens yoy, with a yet-unoptimized P&L, and an underpriced product The other is $NFLX

@jamesbulltard7 @PranavRawal23 Here's hoping!

$AMZN Q4 2018, NA retail operating margins were close to 6% with 1P Retail and Physical more than 60% of sales. With Capex normalizing and cost absorption under way, and with 1P and Physical closer to 44% of total sales now, maybe normal NA retail margins are higher than 6%.

@PranavRawal23 @jamesbulltard7 Long but sceptical of 10% margins by 2025. 2.4% in '22, modelling 3.8% in '23 and 7% in '25. Am assuming 10/11% margins in 2030, revs of $1.1-1.2T & $110-120bn of operating income. $9 of EPS. 25x to 30x multiple, so $225 to $270 stock, so double from here. Hope it happens sooner!

@jamesbulltard7 Those margins sound juicy!

@BearForce_Won Not dunking on him, but can’t fathom how you can’t know something so basic about finance and yet still be an “investor” and raise capital from people.

Guy has been dunked on enough. I’m more interested in the cognitive bias, which while rarely this obvious, is extremely common. Made an analytical mistake, which is forgivable. But got dug in in the replies. Take feedback, update your priors.

@lord_fed Could be a zero tbh.

How and why does PYPL trade @ ~80B market cap Where does this company trade in 5-10 years???

@Retail_Guru @stockspotify @Proctooor True but numbers highlight how exposed they are to Hainan and broader travel. Not doing as well as their main competitor in other regions either. Add in fx issues and feels like mgmt not as on top of the business as they should be. Even after today's sell off, still not cheap

@abshah101 @stockspotify @Proctooor Yes but zero shipping to your highest margin area will do that. Problem now for 12 months & I believe it's misplaced hyper focus on China & poor diagnosis/comms on that issue. Brands are rock solid but between you're seeing impact of channel issues & product cycles.

Vast gulf between Estee & peer performance. This Q, $EL sales FELL 8% vs L'Oreal Luxe +7% & LVMH Beauty +10%. $EL cites growth everywhere including China, but sales/margin impact from not shipping inventory to Asia travel retail just huge. $LRLCY $LVMUY $ULTA