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Ancestry.com Inc. Message Board

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  • jagad5 jagad5 Oct 26, 2011 11:29 PM Flag

    My analysis of ACOM

    ACOM beat my forecast with solid growth in revenues (30% in line with performance over the last 12 quarters) and improved profit margins. Next quarter expect:
    REV: $108M
    NET: $19M
    EPS: $0.42
    R^2 = 0.97
    Fair value - a lot more than the current price. The current price reflects a growth rate of about 5% versus the 30% growth they have been providing.

    JMHO
    Jag

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    • good that you did not claim allegiance to ben graham this time. the stock is down 35% and falling since your 9/9 table pounding. don't think it would have qualified graham's margin of safety. you need > than a 50% bump just to break even.

      • 1 Reply to roseysenario
      • The Ben Graham stock price formula still produces a price much higher than the current stock price. The current price implies a future growth rate of about 5%. If you think that Ancestry.com will grow at 5% or less, it's a sell. If you think it will grow something between 5% and 30%, it is under-priced. IBM, which is growing 6% per year (1/45of ACOM's rate, computed using the same method) is selling for a PE of 14. The question becomes, is ACOM going to grow faster than IBM when deciding whether to buy one or the other?

        The Ben Graham Safety Factor is very closely tied to physical and financial assets. I don't think it's as applicable as when The Intelligent Investor was published, particularly for companies like ACOM. In a knowledge-based company, the majority of a company's assets are not even on the books. How much are those genealogical records worth?

        Questions, comments and derogatory remarks are always welcome.

        Jag

    • Company performance is all within 5% statistical forecast. I'd like to see that reflected in the price. Next quarter, Expect:
      REV: 106M
      NET: 18.5M
      EPS: .40

      A PE of 18x trailing and predictable revenues. The low end of the company's range was 13-15% growth, that's subjective info, not actual fact yet. Dollar Tree is expected to grow 13-15% and it's trading for 24x trailing earnings.

      Current price and current performance aren't in sync.

      JMHO
      Jag

 

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