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Skullcandy, Inc. Message Board

  • finalword2 finalword2 Oct 8, 2013 5:54 PM Flag

    Analyst say sub $4...

    According to the most of these analysts, Skullcandy shares that currently cost close to $6 a share could easily fall as low as $4 over the next 12 months. But is it really as bad as all that?

    Sadly, yes, it is. Sure, at first glance it seems crazy to think a stock that can earn $0.47 a share in a single quarter might be worth only $4. But look at the facts: Despite reporting GAAP "earnings" of nearly $26 million last year, Skullcandy really only produced just $3 million in actual free cash flow. On Skullcandy's $185 million market cap (where it ended last night), that makes for a price-to-free cash flow ratio of more than 61. That's a hard price to justify even if Skullcandy achieves analysts' projected 16% long-term growth rate -- and as we saw yesterday, the stock's already having trouble living up to these lofty expectations.

    Until Skullcandy figures out how to generate a bit more cash from its business, I'm forced to side with the analysts on this one, and to agree: Skullcandy's buy thesis has suffered a serious head wound.

    Sentiment: Strong Sell

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    • FW- as I read many of your earlier posts, I quickly drew the conclusion that you were some idiotic basher who could not substantiate your terribly pessimistic view of Skul. On this post it looks like you actually are giving some explanation as to why you think that skul is a sell. Thank you for that. Many of us feel that mindful contributions are helpful and welcomed as long as there is an explanation. Having said that, I have very little idea if what you said is plausible or not. ( I am the farthest thing from a stock guru or chartist) I'm a flooring installer for pete's sake!! But here is my point.... Maybe it was simply a COINCIDENCE that the stock has dropped 9% after the news of new CFO. Maybe it was'nt investors pulling out because of the non-iminent buyout but maybe the drop was somehow connected to the fact that the ENTIRE stock market has has two huge down days. Have you looked around brother? Look at Deckers, Facebook, Tesla, Netflix. I don't think this selling off has 1 bit to do with this particular company. But that's just me. I'm long and I added today. sleep tight.

6.350.0000(0.00%)Oct 3 4:00 PMEDT