12/20/24 - $vtex - Patience paid. 50 bps @5.7412/20/24 :: VROCKSTAR :: NYSE:VTEX
Patience paid. 50 bps @5.74
- buying anything sub $1 bn and nevermind "brazilian" is a big ask in my book
- but i love this mgmt team and the biz is growing easily teens bc they have solid B2B customers (who use VTEX to build their site/ payments etc. for instance samsung in latam uses VTEX to run their consumer facing sites+)
- i think you need to consider EV to sales here near 3x for a biz that's
a. been delivering solid growth and likely continues to do so in mid teens top line
b. great mgns, 75% ish GM and expanding EBITDA mgn as the biz gains scale
c. cash generative/ not a burner
d. net cash balance sheet
e. previously mentioned, great mgmt team and solid clients
f. valuation reasonable and likely being somewhat affected by the dollar spike which is affecting any tickers that do biz in latam. so this has been the "fly in the ointment" but also the reason (that we didn't know about when i wrote in june) which would give us another two quarters of info and send us into the $5s
- obvious buy zone is sub $5, but i know/like this and have a healthy cash balance looking to identify good '25 plays at reasonable px's. so i realize this could easily go another 15-20% lower, and that's fine - it's a situation where all else equal i'd take it to a 1-1.5% position.
- the ape zone would be mid to low EUROTLX:4S , but i don't expect that. but it's on my radar for if/when. mr. market sometimes does funny things.
V
