Converting a big loss into a profit by proforma accounting. Look at the cash flow statement. Less than $1 billion of free cash flow on a $50 billion market cap. Taking on debt to pay dividend and buy stock, but that can't last long.
Company just dumped some realized gains in the income statement and didn't call them out. Obvious if you just analyze the statements. $2.50 of real earnings. 16x multiple = $40 stock. I like the upside.
Hard to see how this acquisition of Pace is value creating given the premium they are paying. The non GAAP EPS accretion is financial legerdemain. Their earnings are declining, and they will just proforma out expenses. Fair value $32.
Notice the leaks prior. Just a diversionary tactic to remove focus from poor results and huge stock comp. This is a $45 stock at best. I bet this deal never gets done.
More than $4 cash per share. Company can easily buy back 10% of its stock, up to 20% if it takes on some debt. I estimate $2.50 of EPS this year. 16x multiple and add back cash gives you $45 stock. I am thinking of conveying my value enhancing steps to management. Also, this could make a nice buyout candidate.
I do trust the GAAP numbers. I don't have any faith in non GAAP figures put out by management of any company or analysts. As I said, they have $2.50 of sustainable GAAP earnings going forward (not the $3 that analysts assume).
The FedEx way: Spend money on stuff e.g. capex. Don't generate any cash in the process. Write off stuff as a "non cash" charge. Repeat. Quite a Ponzi scheme here being lapped up by investors.
Their revenue guidance for next quarter is below consensus, so more subs not translating to more revs. And EPS guidance stinks. This is a $300 stock at best.
Here is the link for it: