This E-Commerce Stock Trades At 11x Free Cash Flow

Short-term worries have created a long-term opportunity

Editor’s Note: This will be our last deep dive on 2023. We’ll use the holiday period to take a broader look at markets, including a review of 2023 themes, the year’s most (and least) impressive stocks, as well as a look forward to 2024.

Highlights:

• This e-commerce business looks far too cheap. Shares trade at less than 11x trailing twelve-month free cash flow, and under 10x EBITDA, despite a multi-year history of solid growth.

• Skepticism toward management is a key factor: shares have been marginal performers since a 2006 IPO, and M&A contributed to a disastrous reversal in the middle of the last decade.

• But recent M&A has been on point, market share is clearly increasing, and execution has held up.

• The argument here boils down to a simple question: is this is a good business? If so, the stock has a path to significant upside.