Welcome to the August 2024 Valuation Update. This monthly article offers a quick overview of current stock prices and their relationship to our estimated intrinsic values (as of the Valuation Date indicated in the table below), featuring companies we've covered in the last 6 months.
It essentially highlights potentially undervalued stocks for further investigation. According to our estimates, in August’s release, 5 out of 15 stocks trade at a discount exceeding 10%.
Source: StockOpine analysis
What has changed significantly since last month?
Previous version: July’s edition
The valuation headroom for PubMatic has increased from around 19% to 69%, primarily due to a price drop following its Q2 results on August 8th. Despite beating EPS estimates, the company missed on revenue due to one major customer (DSP Buyer) altering its bidding process, highlighting the risk of reliance on large clients, as we noted in our May article. Additionally, full-year revenue and EBITDA guidance were lowered by 3.3%, unsettling investors. On the bright side, net retention improved to 108%.
Adyen’s valuation headroom of 22% has disappeared after its outstanding 1H 2024 results. Net revenue grew by 24%, with North America leading at 30%, and processed volume increased by 45%. The most notable achievement was a 300bps EBITDA margin expansion to 46.3%, up from 43.3%, signaling progress after the completion of its hiring investment plan. Adyen is on track to hit its +50% margin target by 2026 and has secured additional licenses in India and acquiring registration in Mexico. While the recent price increase may make Adyen less attractive from a valuation perspective compared to last month, we still believe it remains a solid investment opportunity.
Join the chat today and ask any questions you may have.
Related articles
Other updates
As we mentioned in our chat on August 5th (during the market collapse—or maybe it wasn’t a collapse after all 🙂), we decided to exit our 2.5% position in FactSet. This move was purely to increase our cash reserves, now at 5% of the portfolio, so we can take advantage of any continued volatility. For example, as we stated in the chat, we added 1% to our position in Adyen at the same time, as it was trading at its lowest levels for 2024.
Koyfin 3-month free trial 💵: StockOpine secured an exclusive perk for our premium members. The 3-MONTH FREE TRIAL translates to a value of $147, covering your subscription to StockOpine. To take advantage of this opportunity, please contact us at info@stockopine.com at any time.