Undervalued TECH Company - INVESTING LIVESTREAM

Hinzugefügt: 2026-05-28

[00:00:03]Okay.

[00:00:07]Are we live?

[00:00:20]Yes, we are.

[00:00:35]All right, if if you're in the in the stream, let me know that you can hear me by saying something in chat.

[00:00:46]How's it going?

[00:00:49]Hope you're ready for pretty good undervalued company today, a value company, as always.

[00:00:58]All right, if you're new to the channel, this is my public YouTube portfolio series where I invest in a different company every week.

[00:01:06]Typically, I invest $200 into one new company, $50 into an existing company.

[00:01:12]Here's the portfolio. We've been going since December 2024.

[00:01:17]Uh we started out doing $100 per week for the first year, and then in year two we've done $250 per week. And you can see we've got this nice exponential growth. We're at 13K.

[00:01:29]So, very exciting.

[00:01:31]We got a lot of holdings. Like I said, a new stock every week. We're up to 60 different positions right now. Um every quarter, generally, I review the portfolio, look for companies that are um overvalued and sell out of them. If they've appreciated a whole lot, we drop them if they're overvalued only. We run a discounted future free cash flow evaluation on this channel. And if a company fails that valuation check, then generally I sell out. Uh sometimes it's because it went way too went up way too much. Sometimes it dropped down because there's new information that we didn't know and it affects the future prospects. And even if we lose money, if it no longer looks undervalued, we still sell. So, all right.

[00:02:20]Let's look at the performance. So, we've been doing this gosh, it's been about a year and a half now.

[00:02:27]I can compare our performance to the S&P 500. So, this is a comparison for if I were instead of investing into a different company every week, if I would have just put that money into SPY, what would my return have been? Currently, we are still beating the S&P 500. It's It gets close from time to time and then we make some ground and then it gets close again.

[00:02:48]So, currently we're up 27% all time. SPY is up 25% and as you can see, the two paths have converged a little bit recently, but we still have the edge.

[00:02:57]So, this portfolio is intended to be a little bit more defensive. So, when the S&P 500, you can see right here, oops.

[00:03:06]When the S&P 500 drops a lot, our portfolio doesn't drop as much. And then when the S&P 500 goes up, we still go up as well. Sometimes not as much, but um like I said, I'm looking to be a little bit defensive, looking for value companies.

[00:03:20]And uh yeah, that's that's pretty much what this series is all about, finding value companies, a different one every week, and being very diversified while trying to find companies that have a significant upside as well. All right.

[00:03:33]So, this week's company, tech company, undervalued. Actually found this company because one of my uh consistent viewers, Hokage, if you're watching, uh you told me to check out uh Accenture. It's one that we've already invested in, but you told me to look at that company to see if it was still undervalued. And one of the great things about Morningstar equity analyst report is when I'm scrolling down reading the latest report on these companies, it shows the competitors.

[00:04:04]And yes, Accenture, according to Morningstar, is incredibly undervalued.

[00:04:08]It's actually uh considered to be a five-star company currently, which is the highest rating that Morningstar gives.

[00:04:15]Medium uncertainty, which is very good.

[00:04:17]Most of the uh the companies I look at are either high or very high uncertainty.

[00:04:22]Standard capital allocation and a narrow moat. So, Accenture looks really good on this top line. Five-star company, you know, a moat, relatively low uncertainty.

[00:04:34]But one of the competition stuck out to me, and so I decided to check them out.

[00:04:37]And so, this week's company is Cognizant. So, let's go to Cognizant right here. This is on stockanalysis.com.

[00:04:45]So, over the last 5 years, we can see that Cognizant has dropped off a cliff lately. So, we're going to talk a little bit about why, and let's look at the forecast. So, the analysts still really like Cognizant.

[00:04:58]It's currently trading at $51 per share.

[00:05:00]The lowest analysts put it at 51. The highest analysts put it at 93. But the main thing that we're looking at is the revenue projections, because this is what I use to calculate the future free cash flows. Then we uh perform a discounted free cash flow valuation. So, the analysts on average are showing pretty good revenue growth in the future.

[00:05:22]Another place I like to look at revenue growth is on Morningstar equity analyst report. So, let's let's read some of the top uh some of the highlights of this report really quick.

[00:05:32]So, Cognizant earnings Uh before I do that, actually, let me let me quickly go to the overview and just read what Cognizant does.

[00:05:40]A professional services company provides consulting and technology and outsourcing services in North America, Europe, and internationally. It operates through four segments, financial services, health sciences prod health sciences products and resources and communications, media and technology.

[00:05:55]The company provides services including artificial intelligence and other technology services and solutions consulting blah blah blah. So we got we got the big buzzword in there AI, you know, oh it's an AI company.

[00:06:07]Super important to have that in there.

[00:06:10]Okay.

[00:06:11]Let's go to Morningstar really quick.

[00:06:13]Cognizant's first quarter revenue grew 4% in constant currency. Operating margin of 16% was stable from previous quarters. First quarter bookings growth was 21% and healthy and in line with its Indian IT service counterparts bringing the trailing 12-month 12-month bookings to a new high of 29.6 billion. So Cognizant continues to expand its artificial intelligence portfolio through partnerships with key ecosystem stakeholders including OpenAI and Palantir, two really big partners.

[00:06:42]Internal AI efforts led by project leap are crucial for the company's updated margin expansion goal of 20 to 40 basis points in 2026. So they are looking to increase their margins going forward.

[00:06:53]They are we're going to look a little more into this but on their most recent quarterly um earnings call in the Q&A session they talk a little bit about how they're doing some some cost cutting to increase their margins.

[00:07:07]Over the past 12 months, Cognizant's head count went up by about 20,000. So this is a company that's growing, it's expanding, their revenue's been going up every year, it's projected to go up. Uh they've got new partnerships, they're working on pushing up their margins.

[00:07:20]There's a lot to like with this company.

[00:07:22]We maintain our $84 share value estimate for narrow moat. Cognizant shares currently look deeply undervalued. We reiterate that Cognizant's comprehensive AI portfolio should earn the company a bigger market share as enterprises show stronger interest in AI development.

[00:07:36]Okay. So why is it so low? Let's go down to what the bears say. They give a nice breakdown. What the bull say, what the bear say. Okay, so let's read about the bears. Continued geopolitical uncertainty and economic volatility can influence enterprise IT spending and weigh on Cognizant's performance.

[00:07:54]Expansion of AI-based systems integration services can cannibalize Cognizant's business process outsourcing services as AI agents replace consultants to handle certain workflows.

[00:08:05]Cognizant relies heavily on offshore labor for project delivery and new restrictions targeting work visas in the US can negatively impact its delivery capabilities. So there are, you know, some risks here.

[00:08:18]Part of the reason why this stock has dropped down so much, but the Morningstar equity analyst report take all this into account. And if I scroll down to the bottom, they give a nice table on revenue projections and profitability projections, which is you know, super important for my evaluation process. So I like to lean on the professional analyst assessment as much as possible. You know, I am a retail investor, I do this part-time. So anytime I have a professional analyst who puts their It's their livelihood, it's their career to analyze these companies and come up with projections. I'm going to lean on those projections. In fact, I'm not I want to reiterate, I'm not looking for typically new information that the market is not aware of. I don't think that's realistic for me. What I'm looking for is companies that are mispriced based on the current information available. So this is a company that fits that criteria. So we've got the Morningstar equity analyst, they are projecting over the next 5 years, this is the revenue line right here. We can see revenue growth forecast over the next 5 years 4.4%.

[00:09:30]So that's that's number one. The second thing I want to look at is their relative profitability. Now So I'm looking to project future free cash flows. The way I do that is I look at their revenue growth and then I look at their historical free cash flow margin.

[00:09:44]It's the percentage of their revenue that they're able to generate free cash flow.

[00:09:48]And then I look at the the analyst assessment for what their future profitability will be. Is it Is it going to be higher than the historic?

[00:09:56]Is it going to be lower than the historic? And with that relative guidance, I try to hone in on my own projection. So, for operating margin, the 3-year average is 15.

[00:10:07]The projected 5-year average going forward, so this was historic, 16.5. So, we've got a an increase.

[00:10:15]For EBITDA, 17 18 19, that averages about 18 and 1/2. Going forward, we're looking at low 19s, okay?

[00:10:26]Oops. Okay, net margin.

[00:10:29]3-year average in the past is 11. Going forward, 12.7. Great. Free cash flow to the firm.

[00:10:37]Average 5.2 over the last 3 years. Going forward, 8.9. So, the analysts are projecting that the revenue growth is going to be about 4.5 average per year over the next 5 years, and the profitability should increase. Okay, those those are the key takeaways that I'm looking at here. So, whenever I go to my automated spreadsheet to operate this, I simply type in the ticker.

[00:11:01]My spreadsheet will pull all the relevant information here on the data entry tab from stock-analysis.com.

[00:11:09]On the next tab, I format the data into nice columns and rows. Then on the next tab, I run the calculation for the discounted free cash flow valuation. And then finally on the dashboard, we spit out our projections. So, these projections right here, let me quickly run through them for those of you that are not familiar. The past projection takes into account the historical revenue growth for the next 5 years. It uses the the 5-year average. It uses that same historical revenue growth going forward for the next 5 years.

[00:11:42]Uh the my projection, this uses my own uh assessment of annualized revenue growth for years 1 through 5. So, um I should back up a little bit. These cells in yellow, these are my assumptions.

[00:11:54]Everything else is automated, but these assumptions make all the difference, and this is where uh you know, you could go from a really accurate assessment of free cash flow valuation to a horrible uh free cash flow valuation. These assumptions are huge.

[00:12:07]Okay. So, for annualized revenue growth over the next 5 years, that's this cell, I'm using the Morningstar Equity Analyst Report for the annualized revenue growth for years 6 through 10, I'm simply using a slightly more conservative version of the Morningstar Equity Analyst Report. There are It's really hard to find uh revenue projections for 5 to 10 years out because or sorry, 6 to 10 years out because there's just so much that can change. It's hard to be accurate, so I just try to be a little bit more conservative than the 5-year projections. And for the perpetual growth rate, I have also 3%. This is just roughly equal to inflation. So, based on uh so these are my revenue assessments or my revenue uh projections going forward. I have my discount rate.

[00:12:51]This is my target return on investment every single year over into eternity. And then I have my profitability metrics right here. So, we have my initial free cash flow margin, and then we have my free cash flow margin growth over the next 5 years. And then for years 6 to infinity, it's uh constant, whatever it was when uh the 5-year period is up. So, that's that's the this percentage right here. So, it starts at 10. There's zero growth, so after 5 years, it remains at 10%. So, the historical free cash flow margin is 11%. I have got 10% free cash flow margin. And we're going to talk about how I came to that uh that projection, but these are the two primary components. What is the revenue going to be over the next 5 to 10 years, and then what percentage of that revenue are they going to be able to create free cash flow. And I focus on the free cash flow because that is the the sum of money that a company has to return to shareholders, whether that is growing the company organically through CapEx or R&D, or marketing, or whether that's inorganic growth through mergers and acquisitions. It could be through dividends or share buybacks. All of these are ways that a company can return value through free cash flow. I'm not going to make a distinction between which avenue they take. I'm just looking at the free cash flow that they have.

[00:14:08]Uh hey Hokage, sorry I just saw your your message your messages in chat.

[00:14:12]Um Cognizant is one of the software-as-a-service company. There are many in this sector now suffering seriously. CRM, WDAY, which I have not seen, and OKTA, and many more. Yeah, I agree that sector is definitely having some issues. This is one of the um what appears to be one of the higher quality companies.

[00:14:34]Uh Morningstar gives it a really high rating. It has a narrow moat, at least.

[00:14:38]I always like to prioritize companies that have a moat. Um so, okay.

[00:14:42]So, we've got 10% in here.

[00:14:44]This is the free cash flow margin. I'm not putting in any free cash flow margin growth, even though the Morningstar equity analyst report showed that they're expecting margin growth over the next 5 years. I'm not putting any in because I want to keep this conservative. I want to set the bar low enough to where I can be confident that this company is going to surpass my bar.

[00:15:04]And so, based on these based off of these uh assumptions, this is the my projection right here. So, we have a uh fair share price of $90. That's a 75% upside. So, before we look at all the rest of these, let me let me talk a little bit more about my free cash flow So, down here we have a table where I make adjustments to the free cash flow margin. These yellow cells are my adjustments. So, I'm only making adjustments for this last category. The four categories are R&D, CapEx, acquisitions, and stock-based compensation. In this case, I'm not giving any credit for R&D. I'm not giving any credit for CapEx.

[00:15:43]I'm not giving any credit or taking away for acquisitions. I'm only taking away credit for stock-based compensation. And this is pretty typical for me. I will take off 95% of their stock-based compensation away from their free cash flow. And that is why their average I'm using 10 instead of 11 because the result of deducting that stock-based compensation that brings me down to an average of 10. So, with this a set of assumptions right here. This is Morningstar's equity analyst report. And then we got um we've got inflation level increases in revenue.

[00:16:19]And a historical average free cash flow margin, even though they're projected to increase their margins over time. Based on this set of assumptions, I have a a margin of safety of 75%. The stock is currently trading at like 52. This is giving me a fair share price of $90 per share. So, this is what appears to me to be a huge margin of safety, which makes it very likely that I'm going to achieve at least 8.35% over the long term. Now, this method does not tell me that Cognizant is about to turn things around right now. Like if we go to the 5-year again, we can see that it's a it's at a 5-year low. This analysis is not telling me that they have reached the bottom and they're about to turn around. They could continue to go down. In fact, they have momentum carrying them down. And I can't predict when the stock price is going to turn in the in the short term.

[00:17:15]But, what I can predict is the likelihood that a company will return to its fair value assuming the assumptions that we have in place hold true. Now, you know, new information could come out. Morningstar could change its revenue guidance. The company could change its revenue guidance. But, with the information that we have publicly available today, this company is undervalued according to what the experts agree that the likely future is for this company. And that's the best that I can do. It's the best that I think most people can do who are not insiders, who have access to insider information. You just have to look at what the market is quoting us and then compare that to what the most likely future is for the company. And then if there's a big discrepancy, then I will buy a small portion of my portfolio into this company. So, in this case, I'm putting $200 into Cognizant. This will be one out of 60 holdings in my portfolio. So, I like to stay highly diversified. But, this company looks really good on paper. Now, let me talk about some of these other projections really quick. So, let's ignore the past projection. This is just using their historical uh revenue growth for years 1 through 5.

[00:18:26]For the analyst um fair uh free cash Sorry. For the analyst fair values, this is only using the stockanalysis.com forecast tab analyst projections for revenue. It's not using the analyst share targets or price targets. It's only using their projections for revenue. So, I have copied this information into the spreadsheet. Based on those revenue projections for years 1 through 5 and my own free cash flow margin assumptions, this is the range of uh fair share prices. So, right here, we can see that on average, the lowest analysts are saying losing 1%, losing 0.82% revenue over the next 5 years. That's the average annualized revenue growth. So, there are some analysts that think this company is going to continue to lose revenue. So, we should also look at that worst case scenario. Instead of revenue growth, let's just say they flatten out. Let's say they don't get any revenue growth over the next 5 years. They don't get any revenue growth for years 6 through 10. They don't get any revenue growth perpetually. So, this company just stays flat. They're essentially losing ground because inflation will be eating away at uh at the dollar at the strength of the dollar. So, at this point, the company is fairly valued. So, the the market is saying this company is not going to get any revenue and their margins going to stay the same or their margins going to deteriorate and their revenue will be uh less than our previous assumption. One of one of the two. So, what I'm seeing here as a fair value, I'm confident that the company can beat this future. I'm I'm saying I'm confident that I think the company can beat 0% revenue growth and they can maintain their average historical free cash flow margin because that's what the analysts agree. There's a big consensus on the analysts. If I look at how many are weighing in, 32 analysts for 2026, 32 analysts for 2027, 20 analysts for 2028. There's a lot of analysts here that are weighing in. So, I'm confident that they can beat this bar, which is giving me a fair value today. So, I think this company is undervalued. All right.

[00:20:37]Another thing I want to quickly look at is on their most recent quarterly report. This is where they do their Q&A session.

[00:20:45]So, I want to look at some of the things that they're talking about here.

[00:20:50]All right. So, they're they talk about their free cash flow in this section.

[00:20:54]Let me go to the bottom. This is So, first they have their just to go over the format of this. First, they have their prepared statements right here. We have, I believe, the CEO giving his prepared statements and then which are pretty long talking about the direction of the company and then this guy I'm not sure what he does maybe he's the CFO he gives his preferred prepared statements and then we get into the questions. This is where the analyst ask questions if we scroll down just a bit more one of the analysts ask about their free cash flow if they're returning to the the company. So let me go down to that that is the most relevant thing that I'm curious about.

[00:21:32]Bear with me.

[00:21:38]Okay.

[00:21:39]All right.

[00:21:42]We generate 2.5 billion dollars in free cash flow last year. We returned 2 billion to shareholders and roughly was invested into three cloud which technically closed the beginning of this year but was announced in 2025. This year again, they're projecting 2.5 billion dollars in free cash flow.

[00:22:03]They've committed 1.6 billion to be returned to shareholders. 1 billion will be share buybacks. 600 million will be in dividends of which we now use about 600 million for from the from the remaining billion for Astria and sorry I'm not familiar with what he's talking about here and so therefore he's saying they have fuel in the tank for acquisitions. So they have 2.5 billion in free cash flow. They're going to return 1 billion through share buybacks. 600 million in dividends. That leaves about a billion dollars will say 900 million for acquisitions. So that's their plan for 2020 seven or no uh 2026 sorry.

[00:22:49]Let me make sure I'm getting the date right.

[00:22:54]Yeah, I believe he's saying for the full year 2026.

[00:22:58]So let's go to their let's Let's to their financials really quick.

[00:23:02]Go to their cash flow statement so we can see how they've uh paid out their cash flow in 2025. So, they got 2.8 billion in operating cash flow. They had 288 million in capital expenditures.

[00:23:14]This is I'm categorizing as maintenance spending. So, I didn't give them any credit here for free cash flow. So, uh scrolling down a little bit further, they repaid some short-term debt, 300 million.

[00:23:27]Uh repurchase of common stock. So, in 2025 they repurchased 1.378 billion dollars in stock and they paid out $600 in dividend. So, that pretty much accounts for 2 billion dollars. Um and then, okay, in 2024, here's where they had their big business acquisition.

[00:23:45]So, in 2024, they had 1.6 billion dollars for acquisitions over the trailing 12 months. They had 730 million dollars so far in 2026 for acquisitions.

[00:23:56]So, what it appears to me is let's see, if we scroll down. So, this is This is over the trailing 12 months, but when we hit when when we have the full fiscal year 2026, we're going to see roughly like they projected probably around 1 billion dollars for repurchasing. They already have about six 600 million dollars over the trailing 12 months and then we'll see this number maybe coming close to a billion dollars in acquisitions. And so, that's how they're returning value to shareholders. They're growing They are growing organically. We saw that they have hired 2,000 more employees. That was on the Morningstar equity analyst report. They've increased their head count by 2,000 employees. They're also uh having business acquisitions. They are buying back shares, which I'm happy about share buybacks, especially when the company is undervalued. And yes, they have a little bit of a dividend.

[00:24:48]So, if I go to the ratios tab, we can see what is the uh what is the equivalent uh dividend if you add up the share buybacks and the dividend.

[00:24:58]So, uh dividend yield is 2.57. The buyback yield is 2.37.

[00:25:05]So, essentially, it's kind of like getting a 5% dividend if you were going to reinvest that dividend back into the company. So, if they give me a 5% dividend, I have to pay taxes on the dividend, and then I can go ahead and reinvest it, or they can just cut out the middle man, me, reinvest it for me, and then I don't have to I don't have to pay the taxes. And like I said, well, a company is undervalued, I'm good with that. So, it's almost like I'm getting a 5% dividend. Another big uh green flag when I'm uh one of the screeners that I like to do is I like to look for a free cash flow yields that are in the double digits. This is a solid indicator that this company might be undervalued in terms of their discounted future free cash flow, and in this case, they indeed are. So, yeah, a 10% free cash flow yield is a really good sign. And if we go back through time, I'm not seeing any year where they were at a 10% free cash flow yield. This is the uh the market cap uh or this is the free cash flow of the company divided by the market cap of the company. So, really strong. Um just to quickly run through some of their uh their financials here to look for red flags.

[00:26:10]So, on their income statement, I'm seeing consistent revenue growth historically uh over the last, gosh, 20 years, they've had pretty consistent uh revenue growth.

[00:26:20]If we scroll down a bit to interest expense, their interest expense is incredibly low compared to their operating income, which means they do not have a ton of debt. So, they don't have a huge debt risk. So, a lot of times I especially when I'm worried that there might be a correction in the economy, like if the economy might slow down, I like to avoid companies that have excessive debt because those debt payments are going to be due in in a big tranches, and if they don't have the cash on hand to pay off a large tranche of debt, then they have to get more debt to pay off the current debt and kind of move that due date down the road. And when the economy tightens, lenders are less likely to give favorable loans, and so a lot of times their interest rate goes up, or they just have trouble refinancing their debt sometimes. And so, this is just one less risk.

[00:27:10]When the environment for growth is really strong, you like to see a little bit of debt because it shows that the company is leveraging its its business to grow faster. So, a little bit of give and take there.

[00:27:21]But, let's see, scrolling down a bit on their shares outstanding, they have been buying back shares consistently.

[00:27:27]Let's see, it was very consistent starting in 2016, so about 10 years they've been reducing their share count consistently.

[00:27:35]Let's see, if we look at their margins, 34% gross margin, 14% operating margin, profit margin 11%, and free cash flow margin 10%. So, these are This is the average that I'm looking at when I'm calculating my free cash flow margin going forward, and it looks like their free cash flow margin is actually Oh, sorry, I'm looking at 2023.

[00:27:59]Okay, if we look right here, so yeah, their their margins are actually trending down a bit, which is a red flag, and maybe that's why they are pushing towards improving their margins in the future.

[00:28:12]Yeah, free cash flow margin a little bit low. Over the last 5 years, they have been pretty steady in the 10 in the low double digit range, but if we go back in time, their free cash flow margins was higher historically, so something to keep in mind.

[00:28:26]On their balance sheet, let's look at their debt real quick.

[00:28:30]Long-term debt, only $535 million.

[00:28:34]They have $1.5 billion in cash, so they could pay off all their debt tomorrow, which is nice to see.

[00:28:39]On the cash flow statement, one of the numbers I like to look at is the stock base compensation. I like to make sure it's relatively low compared to their operating cash flow, which it is. So, everything here in terms of their financial statements is looking pretty good to me. I'm not seeing anything that jumps out as a major red flag, other than they've had some margin compression over the last uh few years, but they are taking measures to turn that around. And uh on their Q&A session, we could actually point that out really quick.

[00:29:09]Let's see.

[00:29:11]Where do they talk about that?

[00:29:19]See, where is it?

[00:29:25]May have been uh the next guy.

[00:29:34]Still looking. What does everybody think about this company so far, Cognizant?

[00:29:39]Um Okoye, is this one that's on your radar or are you thinking it's a little bit um a little bit too risky? What are your thoughts?

[00:29:53]See.

[00:29:54]Oh, here we go. Moving on to margins.

[00:29:57]Uh they talk about how margins have decreased. Our ongoing focus on operation efficiency and benefits from the Indian rupee depreciation help uh more than offset the impact of our deal. Where does he talk about it?

[00:30:12]Oh, here we go. Now, for a few more details on project leap. This is an important initiative to accelerate our path to a more agile and AI-enabled operating model for the future model of the future and improving our cost of delivery. The program is expected to deliver cost savings in 2026 of approximately 200 to 300 million with a full-year benefit in 2027. We anticipate approximately 2/3 of the savings generated by project leap will be directed uh will be directly reinvested to support future growth across integrated offerings, AI capabilities, and partnerships. So, just for 2026, which is uh what I'm reading here is a not a full year of cost savings, but 200 to 300 million. Um So, yeah, we'll um yeah. So, they've they're showing that they are uh operating or they are executing on their cost savings directives. So, you know, I think that is um it's indicating that we could see some margin expansion going into the future.

[00:31:09]Morningstar equity analysts report that they think we're going to see some margin expansion. So, in conclusion, this is the company that I'm investing $200 in this week. I'm seeing a uh let's see. We said 4.4. This was the Morningstar equity analyst expectation, three and three. We're seeing a 75% margin of safety. So, I am reasonably confident that I will see a return on investment of 8.35% at least over the long term. This is over many years. Uh I plan to stay invested unless something material changes with the company or if the price goes up a whole lot and it is uh I'm I'm seeing that it's no longer undervalued according to its discounted free cash flow, which point I would sell out.

[00:31:54]Uh okay. Uh Yaya says, "I am wary of this sector. There may be too much competition." A fair point. Uh there may be too much competition. That is a That's a fair risk. My opinion on the matter is that Morningstar equity analysts are taking that into account.

[00:32:11]This is their uh growth projections as of April 29th. So, it is up-to-date, uh April 29th, 2026. So, I am leaning on this assessment going into the future.

[00:32:24]And even if their margins continue to slow down, if we show just 1% revenue growth, then I'm still seeing a margin of safety. And with a company like this who is they're clearly they're focused on AI and how the landscape is changing going into the future. So, for my personal risk criteria, you know, I'm I'm happy with it, but um your point is uh your point is is taken. Uh it's a fair point. There there is a lot of risk. There is um or there is a lot of competition, which does mean that there is risk involved with this company, um which is why it's one of 60 companies in my portfolio. Definitely want to stay diversified.

[00:33:05]Um I would also point out that surprisingly, Morningstar actually has a medium level of uncertainty. So, that's relatively low.

[00:33:13]Um most of the companies I look at on here, according to Morningstar, has like high or very high uncertainty. So, okay.

[00:33:19]Moving on to the company that I am putting $50 in.

[00:33:24]Put $200 into a new company every week, $50 into an existing company. This is one that Hokage brought to my attention.

[00:33:31]Accenture. So, if I go to the Morningstar Equity Analyst Report, want to again, narrow moat, medium uncertainty, five-star company, um standard capital allocation.

[00:33:43]Wait, yeah, it's the same, right? Across the board, yeah. It's the same rating across the board. So, according to Morningstar, let's scroll down here.

[00:33:52]Okay.

[00:33:53]Even more recent. Oh, no, sorry.

[00:33:56]I thought it said May I thought it said May 19th, that's March 19th. So, less a little bit less recent than the previous company. But, revenue growth projected at 5.1.

[00:34:06]So, let's go ahead and put this in here.

[00:34:11]Accenture.

[00:34:17]5.1.

[00:34:19]4.3.

[00:34:21]Okay, let's look at the free cash flow margin.

[00:34:25]So, once again, not giving any credit for R&D, CapEx, or acquisitions, we are seeing an average free cash flow margin of 12% over the last 5 years. So, I'm going to stick 12 in there. So, based on this set of assumptions, we see a margin of safety of 62%. So, let's look at does Morningstar think that their profitability is going to be going up in the future, staying flat, or going down? Because that is going to That's what gives me confidence in using the historical free cash flow margin is when I see Morningstar saying, "Hey, we actually think they're going to improve that free cash flow margin." That way, if they don't If they don't If they don't improve If they just kind of stay the same, um I've set the bar low enough to where the the company is still undervalued.

[00:35:13]So, okay. Operating margin. Average over the past 3 years, 14.4.

[00:35:19]Which doesn't make any sense, actually, now that I'm looking at this, because I'm seeing 15, 15, and 15. How does that average to 14.4? I don't think it does. So, something is up there, but clearly, going forward, they are showing margin expansion for the operating margin, average of 16.3, going from 15.5 up to 17.1. Uh EBITDA.

[00:35:44]16, 17, 16.

[00:35:47]Uh we're seeing 17 and 18 going forward.

[00:35:49]Um net margin, 11% average over the past 3 years, we're seeing a 12% average going forward.

[00:35:58]Free cash flow margin of the firm, 7% average over the past, we're seeing 10% going into the future. And so, just just to reiterate, I'm not using Morningstar's free cash flow to the firm. I don't know what adjustments that they make to the free cash the standard uh free cash flow calculation, which is just operating cash flow minus CapEx.

[00:36:21]Surely, I Obviously, they make adjustments to it.

[00:36:24]I don't know what they do. I'm just looking at their relative performance.

[00:36:27]So, across all margins, I'm seeing better margins going into the future.

[00:36:34]So, that gives me confidence that I can go with the average historical free cash flow margin over the last 5 years.

[00:36:40]That's what I'm going with. I'm seeing a 62% margin of safety on this company.

[00:36:45]So, I'm putting $50 additionally into Accenture. So, now let's let's go back to this Let's go back to our portfolio really quick.

[00:36:59]Give me 1 second while I pull it back up.

[00:37:06]Got logged out.

[00:37:19]Just my cat is meowing over and over. I don't know if that's picking up on my camera. I don't know.

[00:37:28]He wants attention from his mom.

[00:37:35]Not me.

[00:37:37]Okay.

[00:37:40]All right, we got we got it pulled back up.

[00:37:44]Okay, let's look at Accenture.

[00:37:48]Got 13K in the portfolio.

[00:37:51]Um so, I put in, you know, $250 every week. Uh but we have some extra cash building up from dividends, which is nice. If I go to the activity, we can see uh Accenture got a dividend, um UAN $7, ARLP $4, Realty Income Corp $0.60. So, you know, we got a quite a few companies that generate dividends. Um I'm not specifically going for dividend-paying companies, but it's always nice to see dividends rolling in.

[00:38:18]All right, let's double Let's look at this. Accenture.

[00:38:26]All right. So, we bought $100 of Accenture back in July of 2025.

[00:38:34]So, that's almost a year ago.

[00:38:36]Uh another $30. This must have been whenever I was rebalancing my portfolio at the beginning of the year. Yeah, cuz that's January uh 2026.

[00:38:43]$50 in March and then $50 in May. So, let's see. Let's go to our holdings and filter by name.

[00:38:54]Accenture. Okay, so our average price is currently uh oh our cost basis, sorry, is $230.

[00:39:03]Our average price is $226.

[00:39:07]Um we are down which I don't honestly Oh, sorry. I I completely misunderstood this. Our cost basis is Wait, am I Why am I having trouble understanding this?

[00:39:22]We have one share. Our average price is $226 and yet we have $181.

[00:39:31]They must be calculating this average in a strange way.

[00:39:36]Anyway, we're down $48.

[00:39:40]We're down 29% even though it it's calculating this very strange. Anyway, we are good we are down currently on this holding. We We started buying back in July of 2025 on Accenture.

[00:39:55]Let's go here.

[00:39:59]Yeah, we started buying in July right around here.

[00:40:03]$280 per share.

[00:40:06]And then we're buying again down here.

[00:40:07]We bought in March, I think it I think we said, and then now again in in May.

[00:40:12]Yeah, I think uh this company according to my calculations, it looks undervalued, so I'm happy to put a little bit more money in.

[00:40:19]Um, okay. Are there So, we're done with our our normal part of this uh the show here is Are there any companies that you guys want me to look at and do a quick uh surface-level discounted free cash flow evaluation on stream? If there's any companies that you want me to look at, I'm happy to check them out. Um, like I said, it'll just be surface-level. Um, if they look promising, then I'll do a little bit more research off stream, and then maybe next week or on a uh a video that I post, the the company might be featured, and it might even make it onto the portfolio, depending on how it looks. So, if there's any companies you guys want me to check out, please let me know in the comments. I'd be happy to do that. Um let's see. Hokage brought up CRM we've looked at. I believe we have that one. Workday, I wanted to look up while we're uh waiting for you guys to come up with any companies you want me to look at.

[00:41:14]I'm going to pull up Workday. Not familiar with this company.

[00:41:19]For the last 5 years, it has dropped a lot. This uh this pattern in the market is um looks familiar.

[00:41:28]Software company. Workday provides enterprise cloud applications in the US and internationally. The company offers a suite of financial management applications to maintain accounting information, manage financial processes such as payables and receivables. Okay, interesting.

[00:41:49]What is the financial history of this company?

[00:41:53]This company has consistently grown its revenue a lot. Oh my gosh. So, that in my mind, when I see a company that has consistently grown its revenue like high teens, um even in the 20s for a long time, a lot of time uh what ends up happening is the the thinks that that's going to continue and continue and continue. And then when it becomes clear that it is not going to continue, we see a huge sell-off as the market is kind of correcting for the new growth trajectory um that analysts think that this company is still going to be growing in the double digits. So, let's actually let's do let's look at this company really quick. Let me copy this.

[00:42:34]Let's see.

[00:42:38]They're actually giving like 10 years, so I need to copy it down here before I move it to the correct section.

[00:42:49]Okay.

[00:42:50]So, the average is 11% according to the analyst expectations.

[00:42:56]Oh, I need to put in W Day, don't I?

[00:43:01]Let's check this company out. This company actually looks interesting. So, I put that in the in the margin on accident. 11% here for years 6 through 10.

[00:43:11]I mean, since they actually give the 10-year projections here, let's let's just look.

[00:43:18]Oh, it's not quite 10 years, is it? 1 2 3 4 5 6 7 8. So, I mean, over the next 3 years, it's it's nearly double digit. Um let's go with eight here and then three.

[00:43:33]For the free cash flow margin, let's look at our table. So, they do spend a significant amount of their revenue on R&D. We're we're talking almost a like pretty much a third of their revenue gets spent on R&D. So, I'm going to give them some credit for a little bit of R&D. I like to do 10% if a company spends heavily.

[00:43:52]Um my assumption is that this they're doing this for a good reason, that it's going to some percentage of this R&D spending is going to translate into future free cash flow. So, I give a little bit of credit. I'm not going to give any credit for CapEx, nothing for acquisitions.

[00:44:08]stock-based compensation gets counted against, and so here is the new average, 10% even though it has been trending up. So, 7, 4, 11, 12, 15.7. So, I do see a growing uh free cash flow margin trend, but I'm still going to put the average. I'm going to put 10% in here. And so, with this set of assumptions, the company appears to be roughly fair valued right now. So, the thing that I would want to look at then is does Morningstar think that these margins are going to continue on their current trajectory? Here's a little visual right here that shows their past free cash flow margin. So, it I mean, it has been increasing over time. Um Hokage says, "We need to find companies in the software as a service sector, which are heavily integrated in many companies. Uh example is Oracle, Salesforce. The entire sector is oversold." You know, I do have both Oracle and Salesforce in the portfolio currently.

[00:45:12]Well, let me pull the portfolio back up.

[00:45:18]Dang it, I got logged out once again.

[00:45:25]Let's see.

[00:45:31]Okay.

[00:45:32]Let's look really quick.

[00:45:35]What we got.

[00:45:43]Oh, dang it.

[00:45:47]What am I doing?

[00:45:49]Here we go.

[00:45:57]Oracle.

[00:46:00]So, we did buy Oracle. So, we've only got about 70 bucks invested in Oracle.

[00:46:07]And Salesforce, that one is CRM, right?

[00:46:13]Yep.

[00:46:17]And we also have Okay, yeah. So, we have Oracle and Salesforce.

[00:46:21]Uh similar investments in both. So, this one we did a little bit differently.

[00:46:28]For this one, so normally I buy a company every week, but this time I made a little software uh software as a service ETF. Um Oracle, Microsoft, ADP, and uh Salesforce. So, they're not all software as a service.

[00:46:45]Um but yeah, Oracle and Salesforce both both are in here. And when we started investing in those in that little ETF, we've actually had some good performance here. So, yeah, I mean I maybe I should look at putting more money into this little software ETF. Basically, I just compiled four companies in the software industry that appeared to be especially undervalued and are and are mainstream companies uh that were heavily integrated, like you said, Hakage. So, yeah, I think that's a that's a fair strategy.

[00:47:16]And yeah, maybe I should look at putting a little bit more in here. Um CRM is the only one that's down more since I put it in. So, we can look Let's look at CRM after this.

[00:47:26]So, the other thing I wanted to look at So, does Morningstar have >> [snorts] >> something on Workday? Let me see.

[00:47:40]Morningstar does. Morningstar puts it at a four-star company, which is solid, and narrow moat.

[00:47:50]If I can get the report to load, I will share it.

[00:47:56]And it looks like they dropped their um Yeah, so Workday's share price dropped a whole lot and then this black line, excuse me, this is Morningstar's fair share price. So they they dropped their fair share price.

[00:48:11]Oh, excuse me, a lot.

[00:48:17]This is as of March 5th.

[00:48:20]We have lowered our economic moat rating for Workday to narrow from wide following a review of artificial intelligence potential disruption to the global tech sector. Okay, so they used to have a wide moat.

[00:48:33]They It has a high uncertainty.

[00:48:35]Exemplary capital allocation, which is nice. But yeah, they they lowered their rating significantly.

[00:48:40]Um what's Let's look at the competition.

[00:48:42]So Oracle, they have as a four-star.

[00:48:46]ServiceNow, they have as a four-star, but it's about to be five-star. And SAP, they have as five-star. So maybe we should look at some of those companies as well.

[00:48:58]Anyway, let's let's focus on Workday really quick. Let me scroll down to the the table.

[00:49:05]The all-powerful table. Revenue growth, 9.5%.

[00:49:13]What did we put in? We put in like 11, didn't we? Yeah, we put in 11. So we actually went a little bit heavier.

[00:49:17]Uh as far as margin goes, we are seeing significant margin improvement. So operating margin appears to continue the trend.

[00:49:27]Uh EBITDA margin appears to continue the trend. Net margin continues the trend. And free cash flow to the firm, uh yeah, continues the trend. Although with a caveat here, really high free cash flow margin to the firm and then a big down year and then it it does appear to be trending up going forward. So you know what, let's um I don't normally do this. Let's let's use Morningstar's free cash flow to the firm and let's use Morningstar's uh revenue growth assumption of 9.5.

[00:49:59]Let's just use Let's just rip Morningstar really quick.

[00:50:03]Uh yeah, 13.8.

[00:50:09]And 9.5 and we'll make this a little bit more conservative at seven. So yeah, so based on Morningstar's set of assumptions, I would say that this company is slightly undervalued uh $150 projected fair share price based on Morningstar's set of assumptions and my own revenue assumptions for the distant future.

[00:50:30]What does Morningstar give it?

[00:50:32]Um Oh, look at that. Morningstar says $150 per share.

[00:50:37]The spreadsheet says $150 per share. So yes, this is a working discounted free cash flow spreadsheet. It is automated.

[00:50:47]We type in the ticker, we put in our assumptions and boom, we get, you know, the exact same number as Morningstar. So just, you know, little maybe a little bit of credibility there.

[00:50:59]Uh getting Morningstar's exact fair value estimate. So anyway, it's not rocket science though. I mean, to be fair, it's discounted free cash flow evaluation is it's just a formula.

[00:51:11]Okay. So yeah, I would say this company looks, you know, Workday looks not bad.

[00:51:15]Not bad at all.

[00:51:17]Um all right, so HOKAGE, what do we What else do we want to look at? Um CRM.

[00:51:21]Let's look at Salesforce really quick.

[00:51:24]Hey Momo.

[00:51:26]That one that meow had to come through, didn't it?

[00:51:28]Could y'all hear that?

[00:51:30]He meowed again.

[00:51:32]Momo, what's up?

[00:51:37]Well, I don't think he's going to join us.

[00:51:39]But he is meowing at me now.

[00:51:41]Okay, where was I? CRM.

[00:51:46]Let's Why don't we also pull up the Morningstar article on CRM.

[00:51:56]By the way, if you're curious, I have a brokerage account with Charles Schwab.

[00:52:04]And through Charles Schwab, I get free access to the Morningstar equity analyst report. So, this is it's completely free to get these reports, which I I love. I mean, it's just a comprehensive breakdown of the company.

[00:52:19]The analyst know why it matters, the bottom line, the business strategy and the outlook, what the bulls say, what the bears say. It gives you the competition. It's just such a good resource, these equity analyst reports.

[00:52:32]I'm a huge fan.

[00:52:33]Okay. So, for Salesforce, high uncertainty, standard capital allocation, narrow moat. Okay.

[00:52:40]They're saying it's a four-star company.

[00:52:43]Let's scroll down to the table.

[00:52:45]Can't argue with the table.

[00:52:49]Okay.

[00:52:50]Revenue growth projected for Salesforce, 8.6.

[00:52:54]Free cash flow to the firm, 31. Let's Once again, let's rip.

[00:53:02]Shoot, what did I say?

[00:53:04]8.6.

[00:53:08]And we'll say 6%.

[00:53:11]Okay. So, based on the this set of assumptions, we're getting a huge huge margin of safety. So, what I'm what I'm thinking is for in this case, there's going to be some serious adjustments to the free cash flow margin, probably through stock-based compensation maybe, that I'm that I'm going to want to make. Uh but let's let's look. Okay, so this is giving me $360 as a fair share price. Um yeah, Morningstar is giving 280. So, let's go through the motions here and look at what adjustments we might want to make.

[00:53:47]So, giving a little bit of credit for R&D, 10% uh per usual.

[00:53:51]I'm not going to give any credit for CapEx. Going to take away 495% of stock-based compensation. This gives me a new average of 20% free cash flow margin. However, it is trending upward. So, based on that trend, we may have to uh we may have to adjust it, but let's put 20 in here.

[00:54:12]And the result is a fair share price of 228. So, if they have their historical free cash flow margin, as as well as they meet the analyst projections going forward, then there is a a solid buffer of 27%.

[00:54:29]Um 228 compared to 280, there's still a big discrepancy there. So, I think that Morningstar is probably taking into account uh this company has a really high stock-based compensation.

[00:54:40]If we scroll down, 8% of their revenue go come uh goes or comes from All right, how am I trying to say this?

[00:54:48]Yeah, if you It's 8% of the revenue. The amount that they pay their employees with stock is 8% of the revenue. So, what that does, since they're paying them their employees without cash, this huge chunk of money um boosts their free cash flow number.

[00:55:04]Uh however, the company then, I bet you, turns around and buys back the stock, which is in another category. So, the free cash flow is artificially boosted from this.

[00:55:16]Let's look and see.

[00:55:19]CRM financials, cash flow.

[00:55:23]All right, so for 2026, $3.5 billion this this operating cash flow is boosted.

[00:55:32]That's significant. Um then CapEx is subtracted from this number, that's 600 million. So, we're at about 14.4 billion.

[00:55:45]If we scroll down, repurchase of stock. Look at that. So, they spent 12 and 1/2 billion dollars buying back stock that they just 3.5 billion of it they just gave to their employees. So, you know, I don't like that they count this against the operating cash flow, you know, that that cash is being spent. It's just in a different category, so.

[00:56:07]Okay, with that in mind, let's build in some some margin growth on this assessment right here. So, right now I'm saying 0% margin growth starting at their historical average. If we go to the Morningstar equity analyst report, I am seeing operating revenue margin expansion. So, it went from 19 to 24.

[00:56:27]That's about a 25% margin growth over the next 5 years.

[00:56:32]Net margin went from 15 to 18. Once again, that that one's about a 20% margin growth.

[00:56:38]And free cash flow to the firm went from 29 to 31, relatively small, less than 10%.

[00:56:45]So, let's let's put in a 25% margin growth over the next 5 years. So, to get a 25% margin growth, it would have to grow by one point per year.

[00:56:55]So, with a 25% margin expansion, we now have arrived at our projected fair share price of 283, which is in line right here with what the Morningstar equity analyst report is expecting. So, this is what the This is what the analysts think is going to happen. It gives me a 57% upside. If they fail to improve their margins, if I take that away from them, there's a 27% upside. If they don't quite hit their revenue assessment, uh we'd give them 7% and then 5%.

[00:57:32]Now we're seeing a 14% margin of safety. So even if they slightly miss on their analyst expectations, they're still slightly undervalued. So I think Salesforce still looks really good. I wouldn't mind putting a little bit more money into Salesforce actually.

[00:57:48]And you know what?

[00:57:49]Let's do that right now. I've got those dividends. Let's put some more money into Salesforce.

[00:57:54]And of course uh I got logged out again.

[00:57:59]So And this isn't breaking my $250 per week because this is dividends that came from the portfolio. So we can do this.

[00:58:08]This is not cheating.

[00:58:11]And you know what? If I decided to put more money in, it wouldn't be cheating, all right?

[00:58:15]As long as I show every activity, you know.

[00:58:20]Anyway, I've got it I've got it set to automatic. Automatically $250 bucks every week.

[00:58:26]And even if I put more money in, it wouldn't change like my performance. I could still view the benchmark and show the performance regardless of how much money I put in.

[00:58:35]Okay.

[00:58:37]Tech.

[00:58:39]Software.

[00:58:42]We are going to buy Salesforce.

[00:58:46]$29.68.

[00:58:50]We're just going to do 25. We're going to keep it round. Confirm buy.

[00:58:55]Okay. Yay! Says, "Can you look at KV YO?" Yes, I can.

[00:59:04]Okay. All right, so we just bought some Salesforce. Boom! Just like that.

[00:59:09]Okay.

[00:59:10]Oh, let's look let's look here first.

[00:59:15]KV YO.

[00:59:18]Klaviyo. Klaviyo.

[00:59:22]Klaviyo.

[00:59:24]I'm probably butchering that. Provides cloud-based software as a service. Okay.

[00:59:31]A America, United States, rest of America's Asia Pacific, UK, rest of Europe, Middle East, Africa, this like worldwide.

[00:59:39]Um business to consumer.

[00:59:44]Okay. All right. Software as a service.

[00:59:48]Let's look at the 5-year trend. Yep, going down, looks familiar. Every single company, every single software company we've looked at, it's had a spike in 2025.

[00:59:57]It had a It has a dip in early '24 and then a spike in 2025 and then a and then another dip. It's been a constant trend on all these. Down 50%.

[01:00:07]What is the forecast?

[01:00:08]The analysts still love it on average.

[01:00:12]The projected revenue growth is huge.

[01:00:15]I wonder if this is still legit.

[01:00:17]Let's copy it.

[01:00:23]Okay.

[01:00:26]Uh-oh, once again, we got to stick it here first and then just take 5 years.

[01:00:38]Okay.

[01:00:39]That It would help if I typed in the ticker, KVYO.

[01:00:47]Okay, the average is 20% over the next 5 years. This company is projected to grow a lot. So, let's say 20, let's say 10, and three. So, we're going to be quite a bit more conservative for years 6 through 10.

[01:01:03]Uh let's see the free cash flow margin.

[01:01:07]So, we're giving a little bit of credit here.

[01:01:10]Ooh, okay. So, this company was having negative free cash flow for years 2021 through 2023 and And recently become positive. So, just for the sake of just doing this quickly really quick, let's just see um if we put them at starting at 7.

[01:01:31]And then we have them continuing to grow by 1% per year.

[01:01:35]So, if they hit this, then yeah, they're undervalued. But so, let's let's see let's see what the Morningstar analyst say.

[01:01:44]Also, let me look at the financials.

[01:01:45]They are in USD, had to check that.

[01:01:49]Oops.

[01:01:51]Free cash flow yield 4.8.

[01:01:57]Okay, hold on. Bear with me. Let me Let me see if Morningstar has a report.

[01:02:02]I always like to start there.

[01:02:11]Okay.

[01:02:19]Okay, unfortunately, Morningstar does not have a report. So, I got to come up with my own assessment for future profitability.

[01:02:30]Um not going to be able to do that on the fly. All I can do right now is look at their look at their trend and just say, "Okay, if they continue on this current trend, how do we look?" You know, that's all I can really do right now. I'd have to do some research off-stream to really come up with an opinion on where I think their free cash flow is going. But yeah, clearly, I mean, they started in and the company went public, I guess, in 2021, or at least it doesn't go back further than that. Normally, this goes back 10 years.

[01:03:00]So, if the company did indeed go public in 2021, they had negative free cash flow margin, and they have increased it every single year. Now, this does not make the same adjustments that I make. Um you know, I like I said, I take off one of the big ones is stock base compensation, which is a huge percentage by the way. Like this is kind of a red flag.

[01:03:23]Um you know, their operating cash flow is 237.9.

[01:03:30]But without the stock base compensation, it would be, you know, less than 100.

[01:03:36]So it's like, you know, their their operating cash flow is doubling because they're paying their employees with a lot of a lot of stock. And then if we scroll down, they're buying it back.

[01:03:46]See, like they're buying back $116 million worth of stock. So a lot of their cash is just trying to not let their their share count get too diluted.

[01:03:58]And if we look at their historical shares outstanding, we can see that they are diluting shareholders every year. Um you know, in 2022, they were at 230 million shares, and now they're at 300 million shares. So they're diluting by, you know, nearly 10%.

[01:04:14]Maybe it's averaging like 8% or so every year for the last uh for the last 5 years.

[01:04:22]There's something to think about.

[01:04:24]But there I mean their their free cash flow is clearly trending up. So I mean so they're at 7% now after accounting for stock base compensation.

[01:04:39]Nearly 7%. Let's make it 6.5.

[01:04:42]If they do not grow their free cash flow, but they do hit their revenue targets, which are huge, which is is risky, then they are about fairly valued.

[01:04:54]Um so it's never like a bad thing for analysts to think that a company's going to grow a lot. Like that is obviously good. You want to see a lot of growth.

[01:05:02]But it But if their valuation is like depending on them hitting that growth, and if they just slightly miss it, then a lot of times that can be an additional risk. So generally, I really like to see a company that has huge growth assumptions like this, but then they're still undervalued even when they miss, like even significantly. So, like for instance, if I put in Let's say we go 15% and 8%. Let's say they Let's say they miss by a solid chunk.

[01:05:31]You know, they're only They're only 13% undervalued based on that miss, and it's also assuming that they don't increase their free cash flow margin. So, let's Let's build in a little bit of free cash flow margin growth. Half a point per year.

[01:05:45]So, yeah, now the company, you know, a little bit of an upside. So, you know, I I would say just based on a surface level free cash flow evaluation, if they're if they're going to hit their growth metrics, which are huge, and they're able to continue increasing their margin, then this company is significantly undervalued if they can execute on that. Uh however, these are big growth targets. So, if you know, the industry or the economy tighten up a bit, then uh this company's not going to be undervalued. They got to or or they may be fairly valued potentially. Um Yeah, I mean, maybe Yeah, they're still growing at 15%. I mean, I keep forgetting.

[01:06:28]Yes, I knocked 5% or I I reduced their growth by 25%, but growing by 15% every year for the next 5 years is still huge growth. I mean, uh in the end, these companies are going to end up converging on the like the industry average, um and then the industry will eventually converge on the the the the the inflation average. I mean, a company cannot outperform inflation indefinitely. So, you know, this is big growth. So, I would say like this company looks pretty good, but um I would need to do some research into their their margins, like how confident am I that number one they're going to hit their their revenue growth metrics, and then number two, how confident am I that they are going to continue to expand their margins cuz that is I I would say their valuation is kind of hinging on those two things.

[01:07:21]So, that's what I think about KVYO.

[01:07:24]Yaya, I hope that was helpful in some way. Um yeah.

[01:07:30]If anybody else has a company they want me to look at, leave it in the chat. I will get to it next week. I'll look at it offline, and then if it looks promising, I'll bring it up in the next stream.

[01:07:39]Uh Hokage, thanks for tuning in, buddy.

[01:07:41]Yaya, thanks for coming back. Uh you've been showing up in streams quite a bit, actually. I appreciate you, man. And I appreciate you uh dropping companies as well in the chat for me to look at. Uh Thanks, guys.

[01:07:54]Um that's all I got.

[01:07:56]Next week, I hope to see y'all Wednesday 6:30 p.m. Central Time.

[01:08:02]Look at another company. Look at another two companies, at least. One new, one existing.

[01:08:08]See y'all then. Good night.